(Reuters) — Global grain trader Archer-Daniels-Midland reported a higher-than-expected quarterly profit April 26 on higher demand from importing nations amid reduced harvests in key breadbasket regions and global food supply concerns after Russia’s invasion of Ukraine.
Chicago-based ADM said tight grain inventories would persist “for the next few years” and forecast 2022 profit would top the company’s record performance last year.
ADM’s results highlighted how global grains merchants have weathered surging inflation and supply chain disruptions caused by the war. Ukraine and Russia supply nearly a third of world wheat exports, a fifth of globally traded corn and 80 percent of sunflower oil.
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“We expect reduced crop supplies caused by the weak Canadian canola crop, the short South American crops, and now the disruptions in the Black Sea region, to drive continued tightness in global grain markets for the next few years,” said ADM chief executive officer Juan Luciano.
Grain supply chain middlemen tend to thrive when crises such as droughts or war trigger shortages.
Operating profit in ADM’s Ag Services and Oilseeds segment, its largest in terms of revenue, jumped 30 percent in the quarter on strong trading results and improved oilseed processing margins in every region apart from China.
