Bunge Lowering Expectations for 2008 After Weak Q4

Depressed economic conditions and significant declines in agricultural commodity, freight and energy prices have adversely affected certain customers and counterparties.

14/01/09 Bunge Limited is lowering its earnings expectations for the full year ended December 31, 2008. The company's revised preliminary earnings estimate is approximately $1.06 billion, or $7.70 per share.

Weak fourth quarter results were impacted by soft demand for soybean meal and oil due to challenging economic conditions in our end markets and substitutions of other agricultural commodity products. Farmers were reluctant sellers of crops in expectation of higher prices, while credit constraints affected the Brazilian farm sector and limited sales of fertilizer. Fertilizer segment performance was also impacted by foreign exchange losses of approximately $225 million from the 18% devaluation of the Brazilian real on U.S. dollar-denominated financing of working capital during the fourth quarter. Unlike in agribusiness, where inventories are marked to market, offsetting gains in fertilizer inventories are expected to occur in future quarters when these inventories are sold.

The company expects to record an after tax charge of approximately $160 million related to counterparty risk in its agribusiness segment. Depressed economic conditions and significant declines in agricultural commodity, freight and energy prices have adversely affected certain customers and counterparties.

Jacqualyn Fouse, Chief Financial Officer, stated: "In the fourth quarter, demand fell more than we anticipated. Periods of soft demand are typically short lived in our industry, and we expect to see fundamentals improve during 2009. The USDA forecasts global soybean meal consumption to be flat and vegetable oil to increase 4% in 2009 as compared to 2008. Stocks-to-use ratios of agricultural commodities remain near historically low levels. The recent increase in agricultural commodity prices has improved farm economics. This is encouraging farmers to sell their crops and should stimulate purchases of crop nutrients during the year.

"We are taking further steps to lower costs and improve the efficiency of our asset network. At the same time, the stronger U.S. dollar should benefit the cost structures of our foreign operations. We enter 2009 with a comfortable liquidity position, which should help us to take advantage of opportunities that may arise during this volatile economic period. Our preliminary expectation for 2009 earnings is in the range of $6.90 to $7.60 per share."

The company will provide more information when it announces its fourth quarter results on Thursday, February 5, 2009.