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Commodity Trader ED&F Man Plans to Sell Sugar Assets

Commodity Trader ED&F Man Plans to Sell Sugar Assets

(Bloomberg) -- Commodities trader ED&F Man Holdings Ltd. plans to sell some of its sugar assets as the business struggles to make money amid thin industry margins, according to people familiar with the matter.

The London-based trader, best known for hauling the sweetener and coffee around the globe, plans to sell under-performing sugar assets, said the people, who asked not to be identified because the plan is private. ED&F Man’s agro-industrials division, which contains the assets, lost money in the six months ended March 31 after a loss in the same period a year earlier, the people said.

A spokesman from ED&F Man said the company doesn’t comment on "industry speculation." "As you would expect, we continually evaluate our business and operations and explore potential opportunities that may arise,” he said in an email to Bloomberg News.

Sugar traders have struggled to profit as bumper crops from India to Thailand depressed prices and curbed volatility. The number of companies trading the commodity has also increased, boosting competition and squeezing margins for the industry.

ED&F Man was forced to close a refinery in Israel, shut one of its three factories in Chile and temporarily shuttered its sugar beet-processing plant in Ukraine, the company said in its annual report. In Mexico, the company’s joint venture Azucar Group Saenz has also struggled to turn profits.

The sale may prove a challenge as other traders are also seeking to dispose of their assets. Commodity giant Louis Dreyfus Co.’s Brazil unit Biosev is looking to sell its mills, while Bunge Ltd., another of the four storied firms that have dominated agriculture trading for a century, has also been trying to dispose of its mills in the South American nation.

To contact the reporter on this story: Isis Almeida in Chicago at ialmeida3@bloomberg.net

To contact the editors responsible for this story: Tina Davis at tinadavis@bloomberg.net, Millie Munshi, Pratish Narayanan

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