2015 was a year of many milestones. We had fewer serious safety incidents, improved returns and a record EBIT performance in Agribusiness. We drove productivity savings and returned capital to shareholders as part of a balanced allocation framework.
These were notable achievements, considering the challenging environment. Issues of oversupply, emerging market volatility and weaker GDP growth — facts of life in the commodity space overall — are relevant in ag and food as well.
We saw these headwinds materialize in multiple ways during the year. Slow farmer selling and spot buying by customers pressured margins in softseed crush and our U.S. grain business. Food & Ingredients (F&I) faced a nearly 4 percent drop in Brazilian GDP that impacted consumer spending.
Although we battled headwinds, we capitalized on opportunities. Bunge’s strong agribusiness position in Brazil enabled us to serve farmers who commercialized large volumes of crops and conduct an impressive export program. Agribusiness volumes in Brazil rose by 4 percent. We also leveraged good structural soy crush margins in the U.S. and Europe, and stepped up activity in Argentina as that country began to reform its agricultural policies.
Teams around the world secured hard-won performance improvements, including better China crushing results and solid profitability in sugarcane milling. While our view on the milling operation’s long-term place in Bunge’s portfolio has not changed, the business has fundamentally improved and we are in a better position to realize maximum value moving forward.
Weakness in the Brazilian economy will continue to pressure F&I earnings in the country, and slow farmer selling will persist in some markets, especially the northern hemisphere. But there are a number of positive trends in evidence around the world. The combination of these trends and Bunge’s strong positions gives us optimism about earnings growth and continued excellent returns.
Global demand for our core Agribusiness products continues to grow, and South America, Bunge’s largest region, will lead the market, with big crops, large export flows and strong margins. Our food business will continue to grow in North America, Europe and Asia, benefiting from leaner operations, consumer-driven innovation and tighter working relationships with key customers. Fertilizer should benefit as Argentine farmers commercialize stocks and invest in inputs. In Sugar, the market outlook is constructive. We are entering a period of declining stocks and the broader Brazilian industry, after several years of struggles, is unlikely to respond with quick supply increases. This should provide attractive margins for our milling business.