Demand for protein a key pillar for Cargill
Agribusiness giant Cargill, part of the quartet of companies that dominate global agricultural markets, today reported financial results for the fiscal 2017 first quarter that ended on August 31, 2016. Although revenues were moderately lower compared with last year at USD 27.1 billion, operating profit rose sharply by 35% to USD 857 million. The stellar performance of the animal nutrition and protein segment, partly driven by increasing demand for beef and poultry, helped buoy revenues in the period.
According to company reports, cocoa and chocolate products contributed to the upturn, though earnings were restrained by a shortage of mid-crop cocoa beans in Ghana in the 2015/16 season. Franctrade believes that the 2016/17 season might prove to be equally challenging for Cargill in so far as West African origins are concerned.
West African producers look to cash in on cocoa sector
In Ghana, while the Cocoa Board expects output to increase by around 8% to 850,000 tonnes it has also raised the minimum price by around 12%, which will weigh on buyer margins. Additionally, we believe most of the gains in cocoa output in the season that is just starting (2016/17) will come from Cote d’Ivoire where output was severely curtailed by dry weather last year. Cote d’Ivoire has also lifted the minimum price for cocoa by 10% for the 2016/17 season.
Streamlining edible oil units
Elsewhere, Cargill confirmed it will be selling its soybean and rapeseed crush, oil refining and related bulk storage assets in Amsterdam, and soybean crush facility in Brest, France to Bunge, subject to EU regulatory approval. It will retain its soybean processing plants in Barcelona and Liverpool, as well as other oilseed processing and refining facilities in Europe.