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Cargill grain elevators in East St. Louis.JAMES A. FINLEY/The Associated Press

Cargill Inc., the world's largest agricultural merchant, ended a difficult fiscal year with sharply lower quarterly profit, losing money in cotton and sugar and acknowledging missteps at a trading operation renowned for its global knowhow.

Net profit in the fourth quarter ended May 31 was $73-million (U.S.), down 82 per cent from $404-million in the same period last year.

In its fiscal year Cargill earned $1.17-billion, the smallest net profit since 2003. The annual profit was 56 per cent lower than the record $2.69-billion reported in 2011.

Results excluded previous contributions from Mosaic, the fertiliser company in which Cargill had a 64 per cent stake until splitting it off in May 2011.

Cargill encountered problems in both specialised commodities and global markets through the year. As owner of one of the world's biggest cotton merchants, it lost money trading the fibre as demand softened. Cargill also lost money in sugar and replaced its head of the business last year.

As surging cattle markets outpaced wholesale meat prices, profit margins were squeezed at Cargill's U.S. slaughterhouses. An extremely warm US winter slowed sales of highway salt.

Macroeconomic uncertainties including fears over the eurozone economy also apparently tripped up the company, which has about 139,000 employees in 65 countries.

"Cargill's global market analysis of supply and demand, and our trading expertise are longstanding strengths," said Greg Page, chief executive. "Even so, we did not trade as well in this year's markets, which were driven as much by the economic and political environment as by the fundamentals."

The company has entered its new fiscal year as corn and soyabean prices have surged to records on fear the worst US drought in half a century will dramatically reduce crops. Cargill will be exposed to any shortfall, as it owns an extensive network of grain storage and milling operations across North America.

In the past fiscal year Cargill also made its most expensive acquisition ever, buying animal feed and nutrition company Provimi for $2bn. The company said integration was "proceeding smoothly".

As grain markets tighten, Mr Page has said the US needs to revisit biofuels policies, which help funnel almost 40 per cent of the US corn crop into ethanol. Cargill operates two ethanol plants in the US.

Cargill's annual revenues totalled $133.9-billion, up 12 per cent from $119.5-billion in 2011. Fourth-quarter revenues of $34-billion were 2 per cent lower than the same quarter a year ago.