Cargill Is Not Not Busy
Cargill is on a roll…or should we say sail.
With commodity demand accelerating, especially in China, a lack of new shipping vessels is boosting the dry bulk freight market.
Zoom out: Part of the reduction in new shipping vessel orders is a result of pressure to gas greenhouse gas emissions and uncertainty in the industry about how to go about it.
So what does Cargill have to do with the shipping industry? Let’s just say they don’t have a tiny $hipping fleet.
One of the largest ship charterers, Cargill has 600-700 vessels in its fleet. Dry bulk accounts for 90% of the fleet use.
Oh, and this: Since 2017, Cargill has reduced its fleets’ gross carbon emissions by 1.5 million tonnes. The company achieved an overall reduction of 5% in CO2 emissions per cargo tonne-mile by 2020 against a 2016 baseline, Cargill said.
Meanwhile… It’s no bull that a bull market is sending Cargill profits sailing in Brazil. As in a five-fold increase last year and 38% increase in revenue.
But beyond Brazil, the company might just benefit from a global “mini supercycle.” China buying spree + dwindling stockpiles = soaring prices and volatility.
And when it comes to Cargill’s giant grain trader status, mo’ volatility mo’ profits.