War hits wheat mill margins in Brazil

Valor reports that wheat mills closed 2022 with net margins on average 20% lower than in 2021, squeezed by rising costs and record grain prices driven by the war in Ukraine. According to TCP Partners, losses were greatest among mid-sized companies with revenue between R$80 million and R$600 million. Ricardo Jacomassi, TCP's chief economist, said he was worried about these firms, pressured by larger groups, and noted that covid and the war delayed the consolidation foreseen in an earlier study. He sees buyer interest in niche mills and names US weather and high interest rates as risks.