Cargill Earnings Hit by Commodity Market Disruptions
Cargill Inc said on Tuesday its quarterly earnings fell 28 percent, making it one of the largest companies yet to demonstrate how big commodity market disruptions this year have hurt its bottom line. Minneapolis-based Cargill, a top global commodities trader, was hit by a triple-whammy of unexpected events, including a surge in energy prices in January, rail backlogs, and the rejection of U.S. corn shipments by China. The problems are likely to have also hit Cargill peers such as Archer Daniels Midland Co and Bunge Ltd, which are due to report financial results in the coming weeks. The coldest winter in 30 years catapulted regional U.S. natural gas prices to record highs, while power markets gyrated as producers struggled to keep supplies flowing to consumers.
Leadership Changes for Cargill
On March 1, Jan Dieleman assumed the leadership of Cargill’s Ocean Transportation business with its headquarters in Geneva, Switzerland. Dieleman took over the position of Roger Janson who has managed the business successfully since 2011 and now heads Cargill’s Agricultural Supply Chain enterprise in the Europe, Middle East and Africa region. Dieleman is moving to the position after leading Cargill’s North America Power and Gas business since 2014. After joining the company in 1999, he has gained his expertise working in various roles in grain products and freight trading as well as thermal energy. Cargill’s North America Power and Gas business will be led by Mike Newman who takes over the role of Dieleman.
Cargill Dumps Shipping Arm
Cargill has announced a change in shipping strategy, following the sale of its last four remaining Panamax bulk-carriers, and from here on will charter in ships for all its cargo requirements. "The widespread trend towards consolidation and size within the ship owning segment implies one either gets bigger or scales back," said Vice President of Cargill International Tom Intrator in a statement. Cargill will continue to retain a strong time-chartered fleet, numbering nearly 150 vessels, and its commitment to this strategy is illustrated by the fact that the last four ships were sold with an agreement to charter them back for five years. That fact alone assured the ships fetched $1-2 million above prevailing market rates.
Propeller Retrofits Saves 10 Percent Fuel
Benefits of fitting CLT propellers include fuel savings of around 10 percent while maintaining the same speed, according to Geneva-based shipowner Cargill International SA, which has recently released consumption figures for two of its Panamax bulk carriers. The 70,000 dwt Powhatan and Paiute had CLT propellers retrofitted in February and March 1998, after Cargill had already benefited from more than two years' first-hand experience of the CLT propeller concept developed by Madrid-based designer Sistemar. Cargill first fitted a CLT propeller to one of its vessels in 1995, the 13,600 dwt orange juice carrier Bebedouro, and subsequently to two Capesize bulk carriers, the 164,000 dwt Cherokee and Comanche, as well as Powhatan and Paiute.
Dieleman Takes over as Cargill Shipping Head
Commodities trader Cargill has appointed a new head of its shipping business, weeks after announcing it would close its London freight unit amid a worsening global seaborne market. The dry bulk sector, which transports commodities such as coal and grain, continues to suffer from too many ships available for hire and slowing demand for goods, especially from top importer China, which has led to freight rates slumping to record lows. Cargill, a leading shipping player, said on Friday Jan Dieleman had taken the helm since March 1 of its ocean transportation business, succeeding Roger Janson who had run the division since 2011. Dieleman, who had run Cargill's North America power and gas business since 2014, will operate from the group's freight headquarters in Geneva.
Cargill Takes stake in RightShip
The ship vetting company RightShip Pty Ltd confirmed that Cargill has acquired a one third stake in the company. Shares were sold in equal amounts by founding partners, BHP Billiton and Rio Tinto. Cargill, the international food, agriculture and risk management company, is one of the world’s major users of shipping, especially dry bulk vessels. RightShip’s CEO, Warwick Norman, welcomed Cargill’s decision to become a one third partner as a vote of confidence in RightShip’s vetting services, and praised their practical commitment to raising shipping standards. “The decision by Cargill to invest in RightShip is a great boost to us, and recognition of how relevant and useful our vetting services are to shipping businesses of all sizes.
Cargill to Build Grain Terminal in West Memphis
U.S. agribusiness Cargill Inc said it will build a grain handling facility in West Memphis, Arkansas, to purchase corn, sorghum, soybeans and wheat that the company could ship down the Mississippi River to U.S. Gulf Coast export terminals. Minneapolis-based Cargill, one of the world's largest private companies, said on Thursday it will invest $45 million in the terminal in West Memphis, located on the western bank of the Mississippi. The river is the main shipping route to the Gulf, where about 60 percent of all U.S. corn, soybeans and wheat exports exit the country. When completed, the elevator will be capable of loading up to eight barges daily and of holding up to five barges, Cargill said in a release that did not provide a timeline for the project.
Charterers Take Lead in Contracting Most Fuel-efficient Vessels
Cargill, Huntsman Corp. & UNIPEC UK who combined charter over 350 million tonnes of commodities annually decide to charter only eco-friendly ships. Cargill, one of the world's leading international transporters, producers and marketers of food, agricultural, financial and industrial products, Huntsman Corporation, the global manufacturer and marketer of differentiated chemicals and UNIPEC UK Company Ltd, trader of crude oil and oil products, announce that they will only charter the more efficient vessels operating in the shipping market. This commitment is the first of its kind in the industry to reduce the existing fleet carbon emissions.
Lower Mississippi Exclusive Tug Franchise Ruling
The Federal Maritime Commission (FMC) issued an Order stating that the ALJ is recommending that the Commission approve settlement of allegations against Cargill, Incorporated that it violated the Shipping Act of 1984 by engaging in an exclusive tug franchise at its four grain facilities on the Lower Mississippi River. Under the agreement, no exclusive tug arrangements would be in place for docking and undocking assistance. In its place, there would be a two-tier system, with the upper tier applying to vessels of 13,501 GRT and larger and the lower tier applying to smaller vessels. For tug assistance services other than docking and undocking, rates would be capped at the rates charged by the tug company selected by Cargill as set forth in the company’s public tariff.
Cargill: 50,000T of Sugar Affected by Brazil Fire
Approximately 50,000 tonnes of sugar were stored in a warehouse affected by fire in the Teag terminal in Brazil on Monday, Cargill Inc said in a statement. The terminal, a joint venture between Cargill and Biosev , the sugar unit of Louis Dreyfus Commodities , has storage capacity of 110,000 tonnes, according to the statement. A second warehouse at the terminal was not affected. (Reporting by Caroline Stauffer; Editing by Meredith Mazzilli)
Louis Dreyfus Commodities, Cargill win Brazil Port Deal
Louis Dreyfus Commodities and Cargill won an auction on Wednesday to operate a grains area at Santos Port, the first terminal to be leased by the government under a 2012 law meant to bring investment and upgrade infrastructure. Louis Dreyfus Commodities makes up 60 percent of the winning Consortium LDC Brasil BSL, while Cargill has 40 percent, the consortium said. It offered 303 million reais ($80 million), beating another proposal from Agrovia SA. The consortium is required to move 3.9 million tonnes by its third year of operation. Reporting by Priscila Jordão
Cargill To Ship Low Sulfur Cargo From SE Asia
Cargill Inc is reportedly in the process of shipping the first low-sulfur gas oil or diesel cargo from Southeast Asia to Europe. Reports say the company had chartered a tanker called the Young Lady, which is on its maiden clean products voyage, to lift a total of 680,000 barrels of gas oil from the Malacca II refinery in June. The Malaysian refinery is the only major refinery in Southeast Asia that can produce high-quality diesel that meets tight United States CARB and European EN590 specifications, traders said.
Cargill To Deliver Low Sulfur Cargo
Cargill Inc. is in the process of shipping the first low-sulfur gas oil or diesel cargo from Southeast Asia to Europe. Traders said the company had chartered a tanker called the Young Lady, which is on its maiden clean products voyage, to lift a total of 680,000 barrels of gas oil from the Malacca II refinery in June. The Malaysian refinery is the only major refinery in Southeast Asia that can produce high-quality diesel that meets tight United States CARB and European EN590 specifications, traders said. They said the rare opportunity to export gas oil to Europe emerged because of multiple factors, including cheaper freight, closed arbitrage to the United States and low prices in the benchmark Singapore market.
Y2K Worries Prompt Cargill To Avoid S. Africa
Cargill U.S.-based commodities giant Cargill Inc. has told South Africa it plans to avoid trading there from mid-December to mid-January because of worries over the country's preparations for the millennium bug, according to press reports. The group's South African subsidiary reportedly sent a letter to the Department of Agriculture in Pretoria, pointing to a "worst-case" assessment by a U.S. computer consultancy analyzing the risks of the bug. "We plan to avoid entering into or executing trades in maize, oilseeds, wheat or any other commodity in the period December 15 to January 15," the letter said. According to the letter, U.S. consultancy Gartner Group puts South Africa in a high-risk category for the bug…
Cargill, MV Cargo to Build Grain Terminal in Ukraine
Cargill and MV Cargo formalized their intention to construct a grain terminal in the port of Yuzhny on the Black Sea coast in Ukraine by signing a Share Purchase Agreement (SPA). The signing ceremony was held in Ukrainian Prime Minister Arseniy Yatsenyuk‘s cabinet office in the presence of the U.S Ambassador to Ukraine and senior Ukrainian government officials. “Ukraine is already one of the world’s great agricultural producers, but it should be an agricultural superpower,” said U.S. Ambassador Geoffrey R. Pyatt during the ceremony.
Ardmore Shipping Gets Two New Chem Tankers
Ardmore Shipping Celebrates Naming of "Ardmore Seavaliant' and 'Ardmore Seaventure'. Ardmore Seavaliant immediately chartered to Cargill, following naming at SPP Shipbuilding. Chemical and product tanker specialist Ardmore Shipping has named the two newest vessels to join its fleet, the Ardmore Seavaliant and the Ardmore Seaventure. The naming ceremonies for the two newbuild vessels took place at SPP Shipbuilding in South Korea, prior to the Ardmore Seavaliant being immediately delivered to Cargill on a 12-month time charter arrangement.
First Iron Ore Trade Using CargoDocs Electronic Bills of Lading
BHP Billiton, Royal Bank of Scotland, Westpac Banking Corporation, Cargill and Minerva Marine recently completed the first trade financed iron ore trade using ESS’s CargoDocs electronic bill of lading and eUCP Presentation solutions. CargoDocs was used on a shipment from Australia to China. In this trade the electronic bill of lading was drafted by BHP Billiton in Shanghai (eliminating the need for separate document instructions). It was then approved signed and issued on behalf of Minerva Marine by Wilhelmsen Ships Services in Port Hedland, Australia. BHP Billiton created original electronic peripheral documents within CargoDocs and the whole eSet was endorsed and presented electronically to RBS under an eUCP600 letter of credit.
Cargill to Close London Shipping Unit as Sector Crisis Worsens
Global commodities trader Cargill will close its London shipping office in another sign of the worsening crisis battering the dry freight market, the company said on Thursday. Financial markets have been in turmoil since the start of the year due to worries over the health of the world economy, China's finances and the fallout from low oil prices. The dry bulk sector -- which transports commodities such as coal and grain -- has been particularly hurt by slower Chinese business at a time when the sector is struggling with huge overcapacity. Cargill, a leading shipping player, said the move to shut the London office of its ocean transport business was because the dry freight market…
Star Bulk Enters Time Charter
Star Bulk Carriers Corp., a shipping company focusing on the transportation of dry bulk cargoes, announced that it has entered into a time charter contract with Cargill for the Star Gamma for two years, plus an option for one additional year, at a gross daily rate of $14,050 and $15,500 for the first two years and the optional year respectively. The Star Gamma is a Supramax vessel of 53,098 dwt built in 2002. The new contract will contribute a minimum of $10.3 million to a maximum of $17.1 million in gross revenue. The vessel is expected to be delivered to Cargill in July 2011.
Dry Bulk Charter for Diana Shipping
Diana Shipping Inc. Diana Shipping Inc.a shipping company specializing in the ownership and operation of dry bulk vessels, announcee that it has entered into a time charter contract with Cargill International S.A., Geneva, through a separate wholly-owned subsidiary, for one of its Panamax dry bulk carriers, the m/v "Protefs, at a gross charter rate of US$9,000 per day, minus a 5% commission paid to third parties, for a period of minimum twenty-four (24) months to maximum twenty-nine (29) months. The charter is expected to commence in mid-August 2012. This employment of the Protefs a 73,630 dwt Panamax dry bulk vessel built in 2004, is anticipated to generate approximately US$6.5 million of gross revenue for the minimum scheduled period of the charter.
Indiana Sees First January Vessel in Five Years
The Port of Indiana-Burns Harbor has welcomed a rare January lake vessel to its docks. The "James Kuber" will export approximately 16,000 tons of local corn from port company Cargill to an ethanol plant in Sarnia, Ontario. The 700-foot vessel is expected to begin loading tonight and continue through tomorrow morning. "This is the first lake vessel that we've had call on the port in January since 2006," said Peter Laman, port director at the Port of Indiana-Burns Harbor. "The mild weather has kept ice from forming on the lakes, which generally limits shipping this time of year. The international shipping season officially closed last month, but the port is open year-round.
Canada Grain Handlers to Expand, Crops Overwhelm System
Three Canadian grain handlers said this week that they will expand facilities to handle the country's crops, after a record-smashing harvest overwhelmed the transportation system. Viterra, owned by Glencore Xstrata PLC, said on Thursday it will spend C$100 million ($92 million) to boost grain shipping through Port Metro Vancouver, while CWB, formerly known as the Canadian Wheat Board, said it is building a second Western Canadian grain elevator. Global commodities trader Cargill Ltd said on Wednesday that it would expand an elevator site in Manitoba. The moves come as the country's grain handlers and railways have struggled to move a record harvest to port, causing a massive backlog.
Brazilian Corn Cargos Bound for Southeastern US
Cargill Inc next week is likely to load 50,000 tonnes of Brazilian corn bound for the United States, shipping data showed on Wednesday, in what is expected to be the first of several bulk vessels of South American grain that will be imported here this year. Hog and poultry producers in the Southeastern United States purchased two vessels of corn from South America for arrival in August and September while at least one other vessel was likely to arrive by March, three U.S. corn export traders said. Cargill was the listed shipper for the Nord Voyager vessel, which was due to load the 50,000 tonnes of corn at the Brazilian port of Santarem, according to Williams Shipping Agency data. A spokesman for Cargill, which has a port terminal in Santarem, declined to comment.