Bunge margins soar on robust demand and tight global supplies of essential crops

USA— Bunge has realized a higher quarterly adjusted profit and has raised its full-year earnings forecast by 21% on robust demand and tight global supplies of staple crops since Russia’s invasion of Ukraine.

Shares of the global farm commodities merchant, Bunge surged 5% to $120.80 on the New York Stock Exchange after reaching a record high in April and were up almost 30% this year.

Adjusted profit, excluding one-off items, rose to $4.26 per share, compared with $3.13 a year earlier, topping the consensus estimate of $2.94, according to Refinitiv IBES.

Full-year adjusted earnings guidance has risen to $11.50 per share, from $9.50 previously, and according to the company, the guidance has “upside potential” as tight supplies and strong demand persist.

Grain and oilseed crops in south America and other central producing regions having suffered unfavorable yields, the now two-month war between Russia and Ukraine has exacerbated already thin supplies.

This has had the inadvertent effect of boosting global demand and subsequently raising Bunge’s crop processing margins.

Bunge’s results highlighted how global grains merchants have weathered surging crop prices and supply chain disruptions triggered by the Russia-Ukraine war.


The two nations supply nearly a third of the world’s wheat exports, a fifth of globally traded corn and around 80% of sunflower oil. 

World grain and vegetable oil supplies will not recover from disruptions caused by the war for “a long period of time”, Bunge Chief Executive Greg Heckman said.

Other growers and processors, particularly in South America, will play a greater role in tamping down soaring food inflation, added Heckman.


“There will be a long tail on this because there is infrastructure that has been damaged. There are seaborne logistics that have to be untangled. There are waters that need to be de-mined,” he said.

Bunge’s Mykolaiv port facility, which includes an oilseed processing plant, grain storage and export loading operations, sustained damage in fighting in March.

Although company executives said that the damage did not appear to be significant, the port has remained closed since Russia invaded Ukraine in February.

A prolonged conflict would be a tailwind for Bunge, which makes money trading and processing crops and shipping products around the world.

Bunge, which belongs to the Zacks Agriculture – Products industry, posted revenues of $15.88 billion for the quarter ended March 2022 compared to year-ago revenues of $12.96 billion.

Surpassing the Zacks Consensus Estimate by 0.17%, the company has topped consensus revenue estimates four times over the last four quarters.

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