US food and agribusiness firm Bunge has said net income declined 7% in the third quarter amid difficult conditions in Brazil.

The company posted net income of US$170m, or $1.41 per share, for the third quarter to 30 September, compared to $182m, or $1.53 per share, a year earlier. Net sales slid 5% to $6.23bn.

"This quarter Bunge faced some significant challenges, particularly in Brazil. We believe these challenges are temporary and that the fundamentals in Brazil remain good. On a global level, market conditions are solid," said Alberto Weisser, Bunge's chairman and chief executive officer.

"Throughout the year, Brazilian farm economics have been pressured by drought conditions, an appreciating Brazilian real and lower soybean prices due to large US harvests. As a result, farmers have withheld crop sales. This has reduced volumes and affected margins in our agribusiness operations…The USDA predicts large crops in Brazil in 2006. Normal harvests and stable exchange rates, even at current levels, should return both farmers and Bunge to trend line performance," he added.

Edible oil results improved in Brazil and North America due to higher volumes and strong margins. Results were negatively affected by lower margins and expensive raw materials in Eastern Europe.

The company said its 2005 net income guidance is $475m to $495m, representing $3.97 to $4.13 per share.