Wrong call

While Bunge's earnings soared sixfold to $1.76bn in the quarter, the improvement reflected a $2.4bn gain booked in the quarter on the sale of Brazilian fertilizer assets to Vale.

Gross profit at the group's Agribusiness crushing, marketing and distribution division, which is responsible for 80% of group revenues, slumped by 45% to $270m as slow farmer selling of soybeans, coupled with strong imports by China, kept prices firm, reducing Bunge's margins.

The group, admitted it had been caught off guard by the "tight supply situation", saying that its risk management strategy in oilseeds "had anticipated more balanced supply and demand in the quarter, considering the record soybean crops in South America".

Jacqualyn Fouse, Bunge's chief financial officer, added: "The global crushing environment is more challenging than expected."

'Aggressive pricing'

Bunge also flagged the impact of start-up costs in Brazilian sugar, where it has bought a portfolio of mills, while noting a "weaker than expected" performance by the retail fertilizer operations it retains in the country.

The shortfall reflected "aggressive competitor pricing", which cut margins, and "disruptions" as it split off the remaining fertilizer assets from the mining operations being sold, resulting in "higher operating costs and lost sales opportunities".

At Morgan Stanley, analyst Vincent Andrews said: "Agribusiness, sugar and fertilizer were the clear underperformers due to unfavorable hedges, weaker than expected milling yields, and aggressive competition."

However, Mr Weisser forecast a "significant improvement" over the rest of the year, boosted by the onset of northern hemisphere harvests, the peak of Brazilian sugar production, and a seasonally strong period for fertilizer sales.