Miller Magazine Issue: 121 January 2020

54 MILLER / JANUARY 2020 "Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected."– George Soros Challenges in grain trading Natalja Skuratovic Senior Manager Sales CIS PETKUS Technologie Above citation of billionaire investor in finan- cial markets is very true in respect of the grain markets. The new year started with the shake- up at a top agriculture commodity trader Louis Dreyfus, who announced a cost cutting pro- gram and “systematic review of hiring and sal- ary increases” to combat low profits. Similarly, Western Australian bulk handler and one of world’s biggest grain exporters, CBH Group has recorded a loss of $119.3 million in the year 2019. CBH Group blamed it on “global and political circumstances”. Another leading trading house Glencore has to make increas- ingly painful provisions in its accounts for legal woes ($24 million in legal and other in the first 6 months of 2018 as opposed to $45 million in the first 6 months of 2019). The Glencore (LSE: GLEN) share price has fallen from record highs of more than 400p at the start of 2018 to finish this year at some 235p. On the same note, end of the year saw a slump in Cargill’s 2019 earnings. “Throughout the year, we faced a very challenging global business environment that slowed earnings,” said David W. MacLen- nan, chairman and chief executive officer of Cargill. As a result, in the fourth quarter, net earnings of $235 million were down 67% from $711 million in the previous year’s fourth quar- ter. Over in the US, Bunge sells stake in U.S. ethanol plant as biofuels business struggles due to Trump administration’s expanded use of waivers to exempt oil refineries from mix- ing ethanol into gasoline, while in Argentina, soy crushing giant Vicentin, founded in 1929, has suspended most of its operations as the company battles to restructure its debt after defaulting in December 2019. Vicentin was Argentina’s top exporter of processed soy and an iconic brand in the South American grain scene. Vicentin's financial meltdown exposed