April 24, 2009

Bunge Ltd., the world's biggest oilseed processor has announced its first quarter results which reflected the start to 2009 more challenging than expected.

The company's chairman and chief executive officer Alberto Weisser said retail fertiliser margins in Brazil suffered from aggressive price reductions by competitors, which drove sales prices below international levels.

Weisser added that global demand for soymeal was soft and despite this difficult start, the company's confidence in a recovery in markets and a solid performance in the second half of the year remains strong.

He said Bunge is working through their higher cost fertiliser inventory, and the supply of fertiliser products in the Brazilian retail channel has been reduced by approximately 30 percent since the end of 2008 and is approaching historical seasonal levels, adding that both of these facts should improve margins as the year progresses.

He said higher commodity prices resulting from tighter global oilseed stocks are supporting farmer economics and should help stimulate sales of fertiliser products in the second half of the year when South America enters its next major planting season.

Since mid- January, the USDA has reduced its estimate for global soy production by nearly 15 million tonnes mainly due to weather-related production issues in South America.

Weisser said global soymeal consumption in the first quarter fell by roughly 6 percent compared to the same period in 2008, adding that this figure represents a relative improvement over the 9.5 percent year-over-year reduction in the fourth quarter of 2008; consumption was slightly lower than expected.

However, he said signs of stabilisation in the poultry and pork industries are seen, and estimates that soymeal demand for the calendar year to be up about 1 percent as compared to 2008.

Looking ahead, he said the world will need good harvests in North America in 2009 and South America in 2010 to ease tight agricultural commodity supplies and meet recovering demand.