October 3, 2009

Major Brazilian grain co-op enters liquidation

Brazilian grain cooperative Cooperativa Agropecuaria e Industrial, or Cooagri, has entered into liquidation, local newspaper Valor Economico reported Friday (Oct 2).

Cooagri, the second largest co-op in Brazil's center-west soy belt, was declared insolvent this week by a court in Mato Grosso do Sul's largest city of Dourados, the newspaper reported.

US company Archer Daniels Midland Co. (ADM) has been eyeing the cooperatives' storage facilities, a source close to the talks said. Although talks are continuing, earlier discussions between ADM and the coop's creditors failed, the source who wanted to remain unnamed said.

The cooperative had racked up debt of 241.8 million Brazilian reals (US$135 million). Cooagri has assets of BRL90 million including 18 storage units with a capacity of 1.5 million tonnes of grains such as soy and corn, the newspaper reported.

Brazil is the world's No. 2 producer of soy after the US.