Bunge: Rising grain prices gave farmers in North and South America a chance to sell and traders a chance to build up stocks

Bunge said the Middle East conflict is driving up prices for U.S. farmers while also disrupting global trade, including oil and fertilizer markets, Bloomberg reported.

The U.S. and Israeli attacks on Iran have already effectively blocked the Strait of Hormuz, sending fertilizer and fuel prices soaring, putting pressure on farmers.

At the same time, the Middle East conflict has pushed up prices for grains and oilseeds, prompting farmers in North and South America to sell their previously held crop stocks.

“Farmers have had the opportunity to sell because prices have gone up, and we have had the opportunity to increase our own stocks,” Bunge CEO Greg Heckman said in an interview with Bloomberg News after the company’s investor day on Tuesday.

He said this could partially offset losses for farmers if key inputs such as fertilizer and diesel remain expensive due to the ongoing conflict in the Middle East.

“We’re hearing from our market partners that stocks are adequate right now, but everyone is concerned about what happens if the conflict drags on. Then there are concerns about the physical availability of products and, ultimately, about prices,” Heckman said.

During the investor day, Bunge’s chief also noted that the company is now better prepared to operate in an environment of volatile global trade thanks to the merger with Viterra, which closed in July.

Amid the instability in the Middle East, Bunge is applying the same approaches that it used during Russia’s war against Ukraine — changing ports for transshipment of products and more actively using road and rail transportation.

“We are starting to redirect logistics,” Heckman said.

The company used a similar strategy last year when China stopped buying U.S. soybeans, trying to strengthen its position in trade negotiations with the Donald Trump administration.

“China didn’t stop buying soybeans at all — it just stopped buying them from the United States,” Heckman explained.

Then the country switched to Brazilian soybeans, which forced other buyers of Brazil to look for alternative sources of supply. As a result, Bunge was able to sell American soybeans in those markets.

At the same time, the head of the company said that Bunge hopes for the rapid approval of the U.S. policy on biofuels, which could increase demand for oilseeds, which the company processes for renewable fuels and other products.

Tags: Brazil, prices, soybean, wheat, USA, Argentina, China, Bunge, export, grain