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Cargill posts healthy profit

Cargill Inc. posted a 62 per cent rise in quarterly earnings Oct. 13, led largely by its industrial business.

Cargill, one of the world’s largest private corporations, said earnings rose to $1.49 billion in the first quarter ended Aug. 31 from $917 million a year earlier.

“Cargill realized a strong start to our new fiscal year in a continuing environment of outsized volatility in agricultural and energy markets and severe turbulence in financial markets,” chief executive Greg Page said in a statement.

The agribusiness and trading company’s earnings were led by its industrial segment, which includes its crop nutrient division. The grain origination and processing segment also posted gains.

Page said Cargill received a substantial boost from its investment in the fertilizer industry through its majority stake in Mosaic Co., a global producer of those products.

Mosaic, a top gainer among all stocks on the New York Stock Exchange in 2007, saw its stock value reach a year high of $163.22 in June. The company benefited as fertilizer prices increased sharply this summer in line with rallying grain and energy prices. Cargill holds a 65 per cent share in Mosaic.

The stock has fallen 75 per cent since then, trading at $40.98 on Monday, as grain and energy prices pulled back.

A Cargill spokeswoman told Reuters the company’s access to short-term capital helped insulate it during the quarter from the turmoil roiling U. S. and global economies.

First-quarter earnings were down in Cargill’s three other business segments: agricultural services, food ingredients and applications, and risk management and financial.

The food ingredient segment’s earnings were off due to higher raw materials and energy costs as well as the temporary shutdown of Cargill’s corn-processing plant in Cedar Rapids, Iowa, because of floods in the U. S. Midwest in June, Cargill said.

The facility produces corn syrup, specialty food and industrial starches for North American customers and is slated to reopen in November, Cargill said.

Cargill, which operates in 67 countries, is a leading U. S. grain exporter, producer of ethanol and an energy trader, among many other businesses. It also is a majority owner of Black River Asset Management, a family of hedge funds, and controls CarVal Investors, a global investment firm.

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