CHICAGO (Reuters) - COVID-19 outbreaks are increasing governments' food-security concerns, and importers need U.S. corn and soybeans for the first time in a long time to meet demand, Archer Daniels Midland ADM.N Chief Executive Officer Juan Luciano said on Friday.
The pandemic has upended supply chains globally, as some consumers hoard food and the virus threatens food-processing operations if workers fall ill.
“You see governments more concerned about food security now and the ability to keep supplying food for the world,” Luciano said on a conference call after reporting quarterly results.
ADM, a top global grain merchants, can benefit from rising concerns because its traders and exporters connect regions that have excess supplies with those facing deficits, Luciano said.
Brazil, the world’s top soybean producer, is among nations importing food staples, including soybeans, due to a rise in domestic prices, President Jair Bolsonaro said on Thursday.
Luciano said Brazil has depleted it soybean stocks and is in an environment of food inflation. Farmers in rival producer Argentina, where the currency is volatile, have little incentive to sell their crops, he said, leaving the United States as a prime supplier.
“For the very first time in a long time, the world needs the U.S. supply for both soybeans and corn,” Luciano said.
China, the world’s top soybean importer, increased its purchases of U.S. corn and soybeans this summer and autumn.
China’s government is discussing permits for millions of tonnes of additional corn imports over the next year, Reuters has reported, amid a surge in animal-feed demand.
“The world is tight today,” Luciano said. “There is a big demand from China.”
ADM idled ethanol production at two U.S. corn dry mills this year as the pandemic reduced gasoline demand. The mills will stay idle this winter but could be restarted in the first half of 2021, Chief Financial Officer Ray Young said.
ADM has increased industrial-grade alcohol production at other ethanol plants to make hand sanitizer.
Reporting by Tom Polansek; Editing by John Stonestreet and Bill Berkrot
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