Bunge Limited (Bunge) has reported net sales of $52.6 billion for the full year 2008, up 39%, compared with the net sales of $37.8 billion in the previous year-end. It has also reported a net income of $1.06 billion, or $7.73 per diluted share, for the full year 2008, up 37%, compared with the net income of $778 million, or $5.95 per diluted share, in the previous year-end.

Overview

Alberto Weisser, Bunge’s chairman and chief executive officer stated, In 2008, Bunge produced record results in one of the most volatile years in recent memory. We earned over $1 billion in net income for the first time and produced $2.5 billion of cash flow from operations. We start 2009 with a comfortable liquidity position and a strong balance sheet. The weak global economy will pose challenges, but we see reasons to be optimistic that conditions for our industry will improve during the course of the year.

First, periods of lower demand for our core products are generally short lived. People may cut back consumption during times of economic uncertainty, but in the end, many of our products are the basic staples necessary to feed the world’s growing population. We anticipate demand for soybean meal to improve over the drastic reduction seen late in the fourth quarter, when customers were reducing capacity, drawing down existing meal inventories and using lower-cost feed ingredients. Our estimates for the 2009 calendar year indicate soybean meal demand growth of about 1.5% when compared to 2008. We also expect demand for vegetable oils to increase about 4% in the calendar year, although soy could continue to face competition from other oils.

Second, global commodity stocks remain tight, and this reality is being exacerbated by weather issues in South America. Even with lower economic growth, the world will need additional supplies of crops. Current futures prices indicate that the market will provide incentives for farmers to plant, and this should encourage fertilizer use.

During this time we continue to take steps to lower costs and improve the efficiency of our asset network. We expect that the stronger U.S. dollar should benefit the cost structures of our foreign operations. We are also investing for the long-term in our core businesses, and in complementary value chains such as sugar, but we are managing our projects prudently in light of today’s volatile conditions.

Fourth Quarter Results

Agribusiness

Strong softseed processing results in Europe were more than offset by lower results in soybean processing. Farmer reluctance to sell soybeans in expectation of higher prices, weak demand for soybean meal and oil due to challenging economic conditions in end markets and substitution of other agricultural commodity products all combined to compress volumes and margins. Higher grain origination volumes, primarily due to the U.S. harvest delay and increased corn origination in Brazil, were more than offset by lower margins. Results in our distribution business were impacted by lower volumes and margins. Foreign exchange losses of $165 million from U.S. dollar-denominated financing of working capital, primarily in our Brazilian subsidiary, were offset by the positive impact of foreign exchange on valuations of commodity inventories included in gross profit. In the fourth quarter, the Brazilian real devalued 18% against the U.S. dollar.

Fourth quarter EBIT included a charge of approximately $185 million related to counterparty risk provisions resulting from a combination of the depressed global economy and the adverse impact of significant declines in agricultural commodity, freight and energy prices on certain customers and other counterparties. Results for the fourth quarter of 2008 also included impairment and restructuring charges of $18 million related to the closure of oilseed processing facilities and gains of $15 million related to the acquisition of certain sugar assets. For the fourth quarter of 2007, results included impairment and restructuring charges of $25 million related to the closure of oilseed processing facilities.

Fertilizer

Fertilizer results in the quarter suffered from low sales activity and falling prices. Volumes were significantly lower than in 2007, primarily due to tight farmer credit, and while margins were higher than in the previous year, they were well below levels experienced earlier in 2008. Results were also negatively impacted by approximately $225 million of net foreign exchange losses resulting from the devaluation of the Brazilian real on U.S. dollar-denominated financing of working capital. Unlike in agribusiness where inventories are marked to market, the offsetting gain on fertilizer inventories is expected to occur in future quarters when the inventories are sold. Minority interest increased in the quarter due to higher results at Fosfertil.

Fourth quarter 2007 results included a $50 million increase in our value-added-tax provision, resulting from a change in tax laws in several Brazilian states that took effect in 2008.

Edible Oil Products

Results in the quarter declined primarily due to high raw material costs in Europe as a result of crude vegetable oil inventories purchased prior to price declines, as well as aggressive product pricing by competitors to move inventories.

Results included impairment and restructuring charges of $2 million and $29 million, respectively, in the fourth quarters of 2008 and 2007.

Milling Products

Higher margins in wheat milling were partially offset by lower margins in corn milling.

Fourth quarter 2007 results included a $13 million impairment charge related to the closure of a wheat milling facility in Brazil.

Financial Costs

Interest expense decreased in the quarter due to lower average debt levels, mostly resulting from the drop in prices of agricultural commodity inventories which led to lower average working capital needs.

Income Taxes

The effective tax rate for the year ended December 31, 2008 was 16% compared to 26% in 2007. The decrease in the effective tax rate was primarily due to lower earnings in higher tax jurisdictions.

Cash Flow

Cash provided by operating activities in the fourth quarter of 2008 was $816 million compared to cash provided by operating activities of $231 million in the same period last year. For the year ended December 31, 2008, cash provided by operating activities was $2.5 billion compared to cash used for operating activities of $411 million in 2007. The $3 billion year-over-year improvement reflects higher earnings, efficient working capital management and declining commodity prices during the second half of the year compared to increasing prices over much of 2007.