By Gregory Meyer in New York

Bunge, one of the world?s leading suppliers of agricultural commodities, reported sharply lower results in international trading and forecast tough times in the year ahead.

The New York-listed company, one of the world?s oldest grain merchants, reported operating profit in its main agribusiness segment dropped 46 per cent to $203m in the fourth quarter of 2011 from a very strong quarter a year ago. The agribusiness group buys grain and soyabeans from farmers for processing or export.

?In 2011 Bunge produced strong results in many parts of our business, but faced significant headwinds in others,? said Alberto Weisser, chief executive.

Bunge is not alone in encountering a difficult trading environment. Last week Archer Daniels Midland said profit plunged 89 per cent in the same quarter, while privately held Cargill suffered similar declines in its most recent quarter.

The three companies, along with Louis Dreyfus Commodities of France, make up the historical ?ABCD? of agricultural commodities trading that are now facing increased competition from Asian trading houses.

Grain flowed more freely in late 2011, as Russia and Ukraine returned to international markets after lifting export bans. Bunge said trading volumes increased 22 per cent to 39m tonnes mainly because it sold more grain from the Black Sea region.

However, persistently high prices for grains and oilseeds have squeezed already thin profit margins for merchants, and bullish farmers have in some cases been reluctant sellers.

Bunge?s fourth-quarter net income was $254m, or $1.65 per share, down more than 15 per cent from $301m, or $1.95 per share, a year before. The company?s sugar cane and ethanol business, hurt by a shortfall in the Brazilian sugar crop, was barely profitable in the quarter. A fertiliser unit lost money.

For the full year, net income was $942m, down by more than half from 2010, when earnings were boosted by the sale of a fertiliser business. Mr Weisser said that when combined, Bunge?s agribusiness, edible oils and milling units generated record annual results.

Bunge said 2012 ?will be challenging?, though demand for oils and proteins is rising and output and trade should increase this year.

? The Financial Times Limited 2012