China Agri-Industries issues profit warning after losing HK$374m in July

China Agri-Industries, the mainland’s largest listed agricultural producer and supplier, issued profit warning for the second half on Wednesday after losses ballooned last month.

The company, controlled by state-backed conglomerate Cofco, recorded a net loss of HK$374 million in July, after losing HK$290 million in the first half.

In an exchange filing, the firm said it faced “loss-making pressure for the second half of 2014”, after a drastic decline in soybean prices in July. The company had purchased the commodity at higher prices in the first half, it said.

In addition, the oversupply of oilseed products in the domestic market would continue in the second half, making product prices lower than raw material prices, the company said.

“Despite the recent increase in oilseeds supply in the international market, which is expected to bring down input costs and help ease loss-making pressure in the crushing industry on a temporary, seasonal basis, it will still be hard for the company to pass on higher input costs,” it said.

In the first half of last year, the company recorded a profit of HK$706.8 million.