Half of the world trade in agricultural products is controlled by four companies, but competition is intensifying

The companies ADM (Archer Daniels Midland), Bunge, Cargill and Louis Dreyfus collectively control 50-60% of the international trade in wheat, corn and soybeans, reports Agrarheute with reference to the research data of the Committee on Agriculture of the EU Parliament.

The authors of the study believe that this creates risks for farmers and consumers, so they ask the EU to intervene in the situation. In their opinion, these companies may abuse their market position and detailed knowledge of the market for speculation that will cause losses to farmers and consumers.

The study, prepared by experts from consulting firm Ernst & Young (EY) and the University of Bonn, calls on politicians to increase market transparency and consider introducing a tax on excess profits. According to experts, the combined turnover of raw materials of the four agricultural giants in 2022 amounted to 540 million tons, while the total turnover of world trade, according to the estimates of the US MSG, reached 920 million tons. The Committee on Agriculture of the EU Parliament will discuss the research data on December 2.

None of these companies provides accurate information about the amount of raw materials and their origin. According to experts, the turnover of Cargill is 217 million tons, Bunge - 142 million tons, ADM - 100 million tons, Dreyfus - 83 million tons.

Even 10 years ago, the share of these four companies in the world market was 70-90%, but they were squeezed by new competitors, first of all - the Chinese giant Cofco International (CIL), which in 2022 sold 127 million tons of grain and oil crops and fruits. The Dutch Viterra, a subsidiary of Glencore Group, has a turnover of about 100 million tons.

The Big Four are fighting new competitors, trying to absorb them, and are expanding into areas such as biofuels, edible oils, animal feed and food products. Since 2021, Cargill and ADM have stepped up purchases of competitors, and the largest deal will be Bunge's purchase of Viterra.

The European Commission will approve the billion-dollar deal, subject to certain conditions: Viterra must sell oil businesses in Hungary and Poland, as well as some related transportation assets. However, the antimonopoly authorities of other countries, in particular Canada, have not yet approved the agreement.