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Bunge Earnings, Sales Rise as Trump Talk Hasn't Disrupted Trade

Date: Thursday, February 16, 2017
Source: 4-Traders.com

The flow of basic foodstuffs from U.S. farms to overseas markets has yet to be disrupted by President Trump's talk of trade overhauls, according to the chief executive of commodity trading giant Bunge Ltd.

Price and supply remains the dominant factor for companies like Bunge and the governments and food companies purchasing U.S.-grown corn and other crops, he said. Grain traders are closely monitoring Washington for any signs of a shift arising from changes to U.S. trade policy.

"It is business as usual," said Soren Schroder, Bunge's chief executive, in an interview. "Undoubtedly, people are contemplating plan B if anything should happen."

Bunge and other top agricultural traders, including Archer Daniels Midland Co. and Cargill Inc., help direct the flow of corn, soybeans, wheat and other food commodities around the world, juggling factors like harvests, foreign exchange rates and transport costs. Executives watched warily as Mr. Trump ratcheted up criticism of trade policies that have underpinned growth in agricultural trade with key buyers like Mexico and China. Mexico is the biggest export destination for U.S. farmers' corn, and China the top buyer of their soybeans.

While shippers and importers have yet to alter grain dealings, the prospect of a 20% tax on imported Mexican goods floated by Mr. Trump last month spurred commodity traders to ponder the fallout if Mexico retaliated. Some grain traders scrambled to analyze their credit exposure in case buyers walked away from existing deals to purchase U.S. grain, and make sure new contracts included flexibility to replace U.S. grain with crops from other destinations to avoid potential losses.

ADM executives said last week they were prepared to adjust grain-processing operations in response to any trade waves, like supplying more high-fructose corn syrup to U.S. food and beverage companies to potentially replace Mexican-produced sugar.

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