Brazil's top grains exporter aided by Bunge-Viterra merger
A more concentrated market could mean less leverage for some farmers
14 June 2023
2 minute read
By: The $34 billion merger announced by US grain merchant Bunge and Glencore-backed Viterra on Tuesday will boost the dominance of Brazil's biggest grains exporter and wheat miller, gaining leverage over farmers in some regions, Reuters reported, citing experts.
Already the top exporter of Brazilian corn and soybeans, Bunge will add Viterra operations that ranked third for corn and seventh for soybeans last year, according to data from shipping agent Cargonave.
The combined operation could originate as much as twice the volume of runner-up Cargill and probably account for less than 12% of Brazil's output, said an executive at a large trading firm in Brazil.
That is unlikely to trigger scrutiny from antitrust regulators, said three industry insiders, although it could be enough to gain leverage over farmers in some parts of Brazil.
The impact may be felt most in a northeastern agricultural frontier called "Matopiba," where rapid expansion has meant fewer traders in some corners. A lack of storage capacity in parts of top grains state Mato Grosso could also leave some farmers with less leverage in a more concentrated market.
Soy growers association Aprosoja did not respond to requests for comment.
Antitrust scrutiny may be more likely in Brazil's wheat milling industry, where Bunge and Viterra together have about 30% of the flour market, an industry source said. Bunge and M Dias Branco are Brazil's leading wheat flour millers followed by J. Macedo and Viterra, the source said.
Wheat milling association Abitrigo declined to comment.
There appears to be little overlap in the Brazilian oilseed crushing industry, according to data from trade group Abiove data, which only lists one soy-crushing plant owned by a Viterra-owned firm in Mato Grosso do Sul state.
Press offices for Bunge and Viterra in Brazil did not immediately respond to a request for comment.
