Louis Dreyfus profit down again as grain glut continues

Sales for 2016 fell to $49.8 billion from $55.7b, although shipped volumes were stable at 81 million tonnes.

The Dutch-based private company, which handles about 10 per cent of the world’s agricultural commodity trade, particularly cotton, sugar and rice, has had two years of reduced profits because of growing grain stockpiles and low prices.

Its 2016 core operating profits for its business segments falling from $1.85b in 2015 to $1.6b

"Oversupply, market shocks, geopolitical dynamics and adverse weather conditions were some of the difficulties that the agribusiness industry had to face during 2016," said chief executive officer Gonzalo Ramirez Martiarena.

"Market fundamentals are unlikely to be very different in 2017, so our agility in adapting to changing market conditions will remain critical."

Dreyfus is the fourth player in the so-called ABCD quartet of trading giants leading agricultural commodities trade, alongside Archer Daniels Midland, Bunge and Cargill.

Louis Dreyfus’ Australian business is a long-time buyer and exporter of grain and cotton, having originally established as wheat buying arm of the parent company in Melbourne in 1913.

It is also involved in dairy, sugar and oilseed exports and fertiliser imports, and in the past decade has developed a metals trading business in Australia

The company owns a three Macrofertil fertiliser warehouses in Western Australia and storage sheds in South Australia and Victoria.

It operates cotton gins at Dalby and Emerald in Queensland and Moree, NSW.