UPDATE 1-COFCO Int’l Aims to Double Grain Purchases in Black Sea Region

(Reuters) – COFCO International plans to double its grain purchases in the Black Sea region as part of a global expansion to help serve markets beyond China, the chairman of the Chinese-owned agricultural trading group said on Tuesday.

The Black Sea region has become a major supply hub for staple crops, with Russia now the world’s largest wheat exporter and Ukraine one of the biggest corn exporters.

COFCO International aims to double the volume of grains it sources from the region “in the next two to three years”, Jingtao (Johnny) Chi said in a speech to the FT Commodities Global Summit in Lausanne.

COFCO International is controlled by Chinese food group COFCO Corp and became a global commodities trading house following its acquisition of grain trader Nidera and the agribusiness of Noble Group.

Chi said the firm traded 106 million tonnes of commodities last year, and aims to increase the amount of crops it buys directly from farmers outside China to over 60 million tonnes by 2022, compared with 40 million last year.

Asked at the conference about a potential stock market listing for COFCO International, Chi said this would be a good way to support investor returns.

Chi has said previously that a share listing was an objective for COFCO International but the firm would first be combined with some of COFCO’s domestic operations.

COFCO International’s emergence as an international merchant has challenged the so-called ABCD quartet of farm commodity giants comprising Archer Daniels Midland, Bunge, Louis Dreyfus and Cargill.

Glencore Agriculture has also developed into a major global grain merchant, and its chief executive Chris Mahoney told the conference his firm handled about 80 million tonnes annually.

Mahoney also underlined the importance of the Black Sea region, saying Russia had potential to increases its exports of grain by another 10 million tonnes by 2025, including 6-7 million tonnes of wheat.