LDC income struggles in “persistently challenging” grains market

Louis Dreyfus’ grain business has struggled in a similar vein to other agricultural traders as limited commodity price volatility and an increase in global storage capacity continued to squeeze middlemen, financial results for 2017 released Wednesday showed.

Net sales reached $43 billion, up from $40.6 billion in 2016, as overall sold volumes increased 5% year-on-year to 81 million mt.

Net income was $316 million, up from $306 million.

LDC pointed to strong sales in its oilseed business as driving its revenue increase.

“[Oilseeds] delivered very satisfactory – and improved – results despite operating in an environment of bearish fundamentals,” LDC said.

“The results were generated by solid margins in crushing and logistics in the Americas and China, supported by increased sold volumes across the board,” it said, as well as pointing to its production and marketing of products such as biodiesel, glycerine and lecithin.

However, it described the grains trade as “persistently challenging”.

“[Grains] recorded low results, enduring the same global context as [oilseeds], with large crops and stocks, low price volatility and slow farmer selling, notably in South America,” LDC said.

LDC, one of the world’s biggest agricultural traders, is part of the so-called “ABCD” along with ADM, Bunge and Cargill.