Four companies control half of the world’s agricultural trade, but competition is intensifying

ADM (Archer Daniels Midland), Bunge, Cargill, and Louis Dreyfus collectively control 50-60% of international trade in wheat, corn, and soybeans, Agrarheute reports, citing a study by the EU Parliament’s Agriculture Committee.

The authors of the study believe that this poses risks to farmers and consumers, and therefore ask the EU to intervene. In their opinion, these companies may abuse their market position and detailed knowledge of the market to speculate, which will cause losses to farmers and consumers.

The study, prepared by experts from Ernst & Young (EY) and the University of Bonn, calls on policy makers to increase market transparency and consider introducing a tax on excess profits. According to experts, the total turnover of raw materials of the four agro-giants in 2022 amounted to 540 million tons, while the total turnover of world trade, according to USDA estimates, reached 920 million tons. The EU Parliament’s Committee on Agriculture will discuss the study on December 2.

None of these companies provide accurate information on the amount of raw materials and their origin. Experts estimate that Cargill’s turnover is 217 million tons, Bunge – 142 million tons, ADM – 100 million tons, Dreyfus – 83 million tons.

Just 10 years ago, the share of these four companies in the global market was 70-90%, but they were pushed by new competitors, primarily by the Chinese giant Cofco International (CIL), which sold 127 million tons of grains, oilseeds, and fruits in 2022. Dutch Viterra, a subsidiary of Glencore Group, has a turnover of about 100 million tons.

The Big Four are fighting with new competitors, trying to absorb them, and expanding their business areas, including biofuels, edible oils, animal feed, and food products. Since 2021, Cargill and ADM have stepped up their acquisitions of competitors, with the largest deal being the purchase of Bunge by Viterra.

The European Commission will approve the billion-dollar deal subject to certain conditions: Viterra has to sell its oilseed businesses in Hungary and Poland, as well as some related transportation assets. However, antitrust authorities in other countries, including Canada, have not yet approved the deal.

Tags: Bunge, Cargill