U.S.-based Cargill and Brazil’s Copersucar announced that the two companies plan to form the world’s biggest sugar trader though the formation of a 50-50 joint venture. The deal will combine Cargill’s trading, logistics, and marketing expertise with Copersucar’s vast network of 47 mills which provide 10% of the world’s sugar exports. The new venture will likely have access to Copersucar’s associate mill crush, or 20% of Brazil’s annual cane crop and the source of half the world’s sugar trade. Both company’s ethanol businesses and fixed assets are excluded from the deal. The deal marks a turnaround for both companies. Cargill had once dominated global sugar trading but suffered its worst quarterly losses in a decade in 2011. This deal would catapult Cargill ahead of its rivals Sucden, Louis Dreyfus, and ED&F Man. Copersucar, which suffered a devastating fire in October 2013 destroying its Santos Port terminal for months will now be able to focus its capital on production and can strengthen its global presence on the sugar market. The joint venture is expected to be completed in the second half of 2014.
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