Terms were not disclosed.

 

The deal connects Bunge, Vietnam’s largest producer of soybean oil with a major buyer there.

Wilmar is "a partner who really knows what they’re doing in oil" marketing, said John Baize, president of international agricultural trade and policy consultancy John Baize and Associates.

 

"It makes sense for Bunge because they get to pull out capital, which they can go put back in their core businesses someplace else," he said.

 

Bunge crushes soybeans into soybean oil and soybean meal and ships farm products around the world. Wilmar refines oil for its consumer products business and can use meal for its animal feed ingredients business in Vietnam.

 

Commodity handlers, including Bunge and ADM, have been adjusting their operations after being squeezed by falling crop prices linked to large global harvests, slowing demand in China and weak exports from the United States.

 

They also have sought to build up their food and ingredients businesses to boost profits and reduce earnings volatility associated with trading crops, a business that can swing wildly if bad weather hurts harvests.

 

The joint venture will "create increased operating, marketing and logistics synergies" for Bunge in Vietnam, Chief Executive Soren Schroder said in a statement. It also will help the company "remain a low-cost operator with the highest efficiency possible," he said.

 

The deal "creates integrated operations that are both a source and sales outlet for oil in Vietnam," according to the statement.

 

A Bunge spokeswoman in the United States did not immediately respond to a request for further comment.

Vietnam is a growing market for oilseeds due to increased consumer demand for meat and production of livestock, which are fed with soybean meal. The country is projected to import 5.2 million metric tonnes of meal in 2016/17, up from 2.291 million a decade ago, according to U.S. Department of Agriculture data.