CHICAGO (Reuters) - U.S. agricultural commodities trader Archer Daniels Midland Co ADM.N. said on Tuesday it will take a $30 million hit to its trading profit in the second quarter due to a trade dispute between China and the United States over the feed grain sorghum.
It was the first confirmed financial impact among global grain trading companies from Beijing’s move on April 17 to require hefty anti-dumping deposits on U.S. sorghum imports.
More than 20 bulk U.S. sorghum shipments were en route to China when the announcement was made, including more than a dozen that were loaded at ADM export terminals in Texas. Several of the cargoes were resold to new buyers including Saudi Arabia, Japan and Spain at drastically reduced prices.
ADM, which revealed the expected impact during an earnings-day conference call on Tuesday, is one of the largest sorghum exporters to China. Other global commodities traders may report they were negatively affected by the trade dispute later in the earnings season, analysts said.
ADM reported a stronger-than-expected first-quarter profit on Tuesday on record soybean processing and higher margins.
Reporting by Karl Plume and P.J. Huffstutter in Chicago; Editing by Jeffrey Benkoe