ADM Profit Losses Partially Attributed to Trade War
USAgNet - 02/07/2019
U.S. grains trader Archer Daniels Midland Co on Tuesday reported lower-than-expected fourth-quarter 2018 earnings as the U.S.-China trade war roiled global agriculture, sending its shares down more than 6 percent.
According to Reuters, three of its four business units reported lower results, including ADM’s grain trading origination business, where adjusted operating profit slumped 30 percent to $183 million despite higher volumes of North American corn and soybean exports to markets outside of China.
Profits were also hurt by “significant insurance settlements” among ADM’s businesses tied to sorghum shipments in early 2018.
Last April, Reuters reported that several ships carrying cargoes of sorghum, a niche animal feed, from the United States to China changed course after Beijing slapped hefty anti-dumping deposits on U.S. imports.
An anti-dumping probe by Beijing, which halted trade between the world’s biggest buyer and seller of the grain early last year, was among the first fights between the United States and China, which are still embroiled in a trade war.
ADM’s origination unit, which buys grain from farmers, received an intra-company settlement in the quarter from its captive insurance subsidiary related to sorghum shipments intended for China in the first half of 2018, ADM said in a statement to Reuters on Tuesday.
One key bright spot was...