Bunge (BG), one of the world’s largest grain marketers, is flying high thanks to record grain prices.
First-quarter net income soared to $232 million from $63 million during the first quarter of 2010. That jump was in no small part to its grain-marketing business globally, including in Argentina, one of the largest exporters of several of Bunge’s key commodities.
Bunge was removed in early May from Argentina’s registry of grain traders, which had allowed it to benefit from significant tax breaks. Bunge has allegedly avoided paying $300 million in taxes, something the company denies vehemently.
Thanks to its extensive network of buyers throughout Argentina, Bunge doesn’t expect there to be any direct effects on its ability to export corn, soybean, and wheat. But it will likely suffer from exposure to full tax liabilities as well as having to use intermediary brokers, a practice it had phased out.