Louis Dreyfus: oversupply and slow demand growth to continue in 2017

By Aerin Einstein-Curtis contact

- Last updated on GMT

© iStock/RomoloTavani
© iStock/RomoloTavani
Looking ahead, however, Louis Dreyfus said it expects to see the current oversupply in agri-commodities markets adjust to lower price levels and that volatility from physical disruptions will reappear.

CEO, Ramírez Martiarena, in the group’s annual report published on Monday (3 April), said trends shoring up this longer term ​positive outlook including the increasing urbanization and continued growth of emerging markets, boosting long-term demand for animal proteins.

Louis Dreyfus faced headwinds in 2016 and the CEO said he expects the market fundamentals for this year to be similar. 

This week saw the company report that consolidated pre-tax profits for its FY 2016 were down 12.3% year-on-year, at $365m. Net sales, it added, fell by 10.6%, year-on-year, to $49.8bn, due to lower prices in the year to 21 December 2016.

However, its consolidated net income rose by 45% to $305m.

The company blamed strong supply and large inventories of some commodities along with difficult market conditions exacerbated by volatility for the pre-tax earnings dip.

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