Bunge Hit Especially Hard by Trade War Fallout
The ongoing trade war between the U.S. and China has resulted in high volatility, one thing that the global ABCDs often claim is key to realizing profits in global trading. And yet, ADM, Bunge, Cargill, and Louis Dreyfus have been struggling.
Shifts in global grain flows should have served the largest global traders - who capitalize on shifting grain supply from regions of surplus to buyers. But due to multiple causes, including those political and supply chain mishaps, global grain markets ended up being difficult to navigate - especially for Bunge.
Already engulfed in a strategic review of its business amid pressure from its activist investors, Bunge also was a target for takeover by both ADM and Glencore after consecutive weak postings.
A string of ill-timed moves have seen Bunge’s shares fall 32 percent compared to a year ago, compared to a 3 percent loss posted by ADM over the same time period. Bunge is not alone however. Cargill also reported a 20 percent decline in profits for its fiscal second quarter, and Louis Dreyfus posted lower profits for its first half of 2018.