close
Trading

Low margins prompting ADM to leave global sugar trading

forex-trading

Archer-Daniels-Midland Co. will soon quit the global sugar-trading business because the operations are not delivering margins sufficient to overcome high financial risks, said a person familiar with the matter on condition of anonymity because of the private nature of the discussions.

The company’s sugar trade reached a peak in the 2011-12 season, when volumes reached 2 million metric tons, with supplies mostly coming from Brazilian millers, the person said. ADM declined to comment on its sugar-trading strategy, citing a quiet period, according to an e-mail from the press office. The company is scheduled to release an earnings report in early August.

Since ADM’s trading peaked, Brazil’s sugar industry has undergone woes, with some processors closing amid low prices for the sweetener. Some of ADM’s rivals took to creating joint ventures to withstand the volatility.

Risk Warning:

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Paul

The author Paul