Cargill is in talks to exit its global sugar trading business as the top agricultural commodities business seeks to focus on food processing and meat.
The Minneapolis-based company is in negotiations to sell its 50 percent stake in Alvean, the world’s largest sugar trader, to Brazilian partner Copersucar, according to a statement from Copersucar.
Cargill deferred to Copersucar for a comment.
The deal, if successful, is expected to be announced in the first quarter, according to people familiar with the matter who asked not to be named because the information is private.
“Both shareholders are discussing an agreement in which Copersucar will become the sole owner, acquiring Cargill’s shares in Alvean,” Copersucar said in the statement.
Cargill, one of America’s biggest closely held corporations and with facilities in Cedar Rapids, has been changing its business to focus on food-processing and meat as agricultural commodity traders struggled to make money in recent years.
The corporation, which has become less of a traditional trading business, is the third-largest U.S. beef producer and it has been expanding its protein unit abroad.
The move comes six years after Cargill and Copersucar formed their joint venture, which is led out of a trading office in Geneva.
In 2019-20, it accounted for about 20 percent of global sugar shipments.
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While prices are now near the highest levels since 2017 as supplies tighten and investors flock to commodities, sugar traders grappled for years with bumper crops that depressed the volatility they need to thrive.
Cargill’s exit follows a similar move by rival Archer-Daniels-Midland.
Bunge, which formed a joint venture with BP for sugar and ethanol, has also said it plans to exit the business eventually.