ADM Retreats from China’s Domestic Trading Amid Profit Slump and Geopolitical Headwinds

Archer-Daniels-Midland (ADM), the agricultural titan, has taken a dramatic step back from China’s domestic commodity markets, halting its crop trading operations in Shanghai and cutting roughly 30 jobs in its largest business segment. The move, announced Monday, underscores the pressures facing global agribusinesses as they navigate slumping profits, geopolitical turmoil, and the lingering fallout from a high-profile accounting scandal. By September 2025, ADM’s Toepfer Shanghai subsidiary will cease domestic trading, retaining only a skeleton crew of about 10 employees to handle import-focused roles. The retreat marks a stark pivot for a company that has operated in China for nearly three decades.

The Financial Calculus: A 40% Profit Drop Sparks Restructuring

ADM’s decision stems from a perfect storm of financial and geopolitical headwinds. The company’s Agricultural Services and Oilseeds division—responsible for roughly half its revenue—saw operating profits plummet 40% in the last fiscal year. Weak crop prices, inflation-driven demand declines, and razor-thin margins in China, the world’s largest commodities market, have squeezed profitability. To combat these pressures, ADM is pursuing a global restructuring plan targeting $500 million to $700 million in annual savings over three to five years, including 600 to 700 job cuts worldwide.

In Shanghai, the cuts are severe: sources confirm that 40 to 50 employees were laid off this week, reducing the office’s workforce to just 10. The remaining staff will focus on imports, a nod to ADM’s continued reliance on China as a buyer of U.S. agricultural goods. Yet the move signals a strategic retreat from a market where ADM once sought to grow its domestic footprint.

Geopolitical Crosscurrents: Trade Wars and Supply Chain Risks

The restructuring is also a response to escalating U.S.-China trade tensions. ADM, which relies heavily on trans-Pacific trade—shipping U.S. soybeans, corn, and wheat to China—has been battered by the ongoing trade war. U.S. exports to China have dried up in key categories, with soybean shipments dropping 70% since 2018. ADM’s announcement comes as Washington and Beijing remain locked in disputes over subsidies, intellectual property, and technology, further clouding the outlook for agricultural trade.

“The company is being forced to adapt to a reality where geopolitical risks are as critical as market fundamentals,” said one industry analyst. “ADM can no longer afford to bet on domestic Chinese markets when margins are collapsing and trade routes are unpredictable.”

Market Reaction: A Mixed Signal for Investors

Investors initially reacted positively to the news, sending ADM shares up 1.3% to $46.44. However, the stock remains near five-year lows, reflecting broader concerns about the company’s ability to recover. While the restructuring may reduce costs, the long-term viability of ADM’s China strategy is in question. The company’s commitment to retaining import-focused operations suggests it still sees value in China’s role as a buyer of U.S. goods, but domestic trading—a higher-margin business—has become too risky.

Conclusion: A Necessary Retreat, But Long-Term Challenges Remain

ADM’s exit from domestic trading in China is a pragmatic move to shore up profits in an increasingly volatile landscape. By trimming non-core operations and focusing on import logistics, the company aims to stabilize its finances and weather geopolitical storms. The $500 million to $700 million in projected savings could help offset losses and rebuild investor confidence after the accounting scandal that rattled its reputation.

However, the decision also highlights the growing risks of operating in China, where trade policies and market dynamics can shift abruptly. With domestic agricultural markets now off-limits, ADM’s future in Asia hinges on its ability to navigate U.S.-China trade politics while diversifying into other regions. Investors will be watching closely to see if the cost cuts and strategic retrenchment can position ADM for sustainable growth—or if the company’s retreat signals a broader acknowledgment that its China ambitions have outlived their utility.

As ADM’s Shanghai office sheds staff and scales back ambitions, the message is clear: in today’s fractured global economy, even agricultural giants must pick their battles carefully.