Bunge and Viterra to form $34bn agri trading giant

Leading US agribusiness Bunge and Glencore-backed Viterra have announced they would be merging to create an approximately US$34bn agricultural trading giant, Reuters reported.

Bringing the combined company closer in scale to leading rivals Archer Daniels Midland (ADM) and Cargill, the deal valued Bunge and Viterra at around US$17bn each and was likely to draw close regulatory scrutiny, the 13 June report said.

As Bunge would be paying for a significant percentage of the deal with cash, its shareholders would own about 70% of the combined company, Reuters wrote. Under the terms of the deal, Viterra shareholders would get about 65.6M shares of Bunge stock, with a value of around US$6.2bn, and about US$2bn in cash. Bunge would also assume US$9.8bn of Viterra’s debt.

Bunge is currently the world’s leading oilseed processor and analysts were quoted as saying the company and Viterra’s crushing businesses could face regulatory scrutiny in Canada and Argentina.

According to data from shipping agent Cargo- nave, last year, Bunge was the largest corn and soyabean exporter from Brazil – the feedstocks for producing animal feed and biofuels. Viterra was the third-largest corn exporter and seventh largest global soyabean shipper. When combined, the companies accounted for about 23.7% of Brazilian corn exports in 2022 and 20.9% of Brazilian soyabean exports.

In the USA, Viterra’s business of buying and selling grain expanded following its acquisition of the grain and ingredients business of US oilseed and ingredients firm Gavilon last year, while the merger would enhance Bunge’s US grain exporting and oilseed processing businesses, Reuters wrote.

In early 2017, Viterra – then known as Glencore Agriculture – had approached Bunge about a friendly takeover but that had been rejected. Bunge's CEO and senior executives had since been replaced. Bunge’s management team, led by CEO Greg Heckman, would now oversee the combined Viterra/Bunge entity, Reuters wrote.

Indonesia plans to trade CPO on new local exchange

Indonesia plans to trade crude palm oil (CPO) on a local futures exchange scheduled for launch by June, Reuters reported on 4 May.

Only spot trading in the rupiah currency for direct CPO exports would be traded on the exchange initially, Didid Noordiatmoko, head of the commodity futures regulator, Bappebti, told reporters. If successful, the exchange would add CPO derivatives and future contracts later.

The country had initially planned to require overseas buyers of CPO to make their purchases via the exchange, along with exporters of refined products, Reuters wrote.

Most palm oil trades in Indonesia were currently carried out directly between producers and buyers, and auctions held by state trading company KPB Nusantara only offered physical palm oil, and not futures, contracts.

The country does not currently have its own CPO ref- erence price, instead referring to the Malaysia Derivatives Exchange (MDEX) in Malaysia, CIF Rotterdam prices in the Netherlands and the Indonesia Commodity and Derivatives Exchange (ICDX) in Indonesia, according to a 3 March Asia News Network report.

The selection of delivery points for cargoes continued to be an issue due to Indonesia’s size and number of ports, AgriCensus wrote on 5 May. While Dumai and Belawan were typically seen as references for exports, ports in other provinces also handled a substantial volume of export flows and prices could vary across ports, the report said.

Cargill set to expand Australian oilseed crushing capacity

Global agribusiness giant Cargill announced on 26 April that it would invest US$50M in Australia to upgrade and expand its oilseed crushing facilities in Newcastle, Narrabi and Footscray to meet rising global and domestic demand for canola and cottonseed oil.

As part of the investment, Cargill would upgrade and re-start its Narrabri plant, which had been modified into a dedicated cottonseed dehulling plant. The hulls would cater to domestic feedstock markets and cottonseed would be taken to Newcastle for processing into oil and meal.

Cargill's Newcastle plant would be upgraded to crush cottonseed alongside existing canola processing capacity, significantly increasing the plant’s total crushing capacity.

Canola crushing capacity would also increase at Cargill’s Footscray plant with upgrades to processing equipment and some modifications to improve logistics.

Cargill processes over 680,000 tonnes/ year of canola, cottonseed, sunflowerseed and soyabeans in Australia.