Bunge, the biggest processor of oilseed in the world, was extremely upbeat about its results yesterday, despite volatility in the fourth quarter keeping profit back to five percent, writes Philippa Nuttall.
Net sales, moreover, dropped to $6.2bn from $6.4bn last year due partly to the drop in the price of soy. But the group's net income rose to $105m from $100m in 2004 compared to 2003.
The company though was optimistic about its performance and the state of things to come. Alberto Weisser, the company's CEO, praised the group's ability to deal with volatile markets.
Bunge's diverse business model - including selling oilseed, grains, fertilisers and some food products - helps the company stay afloat when the markets are unstable as its risk is spread more thinly, company spokesperson Stewart Lindsay told FoodNavigatorUSA.com.
He said that the company plans in 2005 to "continue to focus on a global strategy", concentrating its efforts on expanding its presence in South America and Eastern Europe, where there is already "strong demand for our product". The "developing world, such as South East Asia", is where the company is also aiming its marketing.
"There is rising demand for soybean meal and oil" according to Lindsay and if supply and demand stays normal, he believes "we should see good prices".
USDA estimates suggest this is likely with the US soy crop said to be at approximately 85 million tons - a 27 percent increase over last year's crop - and significant increases to the Brazilian and Argentine crops.
Bunge said it expects long-term demand to grow by 4 percent a year ; the USDA projects global soybean meal consumption in 2005 at 140 million tons, an 8 percent increase over 2004.
To make the most of this growth, Lindsay said Bunge would be looking at investing in "value-added" agreements, such as the one it signed with Procter & Gamble and Peter Cremer North America last November to produce and market cholesterol-reducing phytosterol ingredients for pharmaceuticals and foods.
The launch of a low-linolenic soybean oil in the US was also part of a similar strategy.
The oil was only recently brought onto the market and Bunge is still working with customers to perfect its use and is beginning to sell the seeds to farmers. "We expect to get about one billion pounds of oil from this crop by 2009", said Lindsay.