Wilmar International, the world’s biggest palm-oil processor, said second-quarter profit dropped 70% on losses at its oilseeds and grains segment.

Net income fell to US$117.1 million ($145.9 million) in the three months ended June 30 from $393.1 million a year earlier, the Singapore-based company said today in a statement. That missed the US$316.5 million average of three analyst estimates surveyed by Bloomberg. Sales rose 4.3% to US$11 billion.

Wilmar’s profit dropped a second straight quarter as higher soybean prices, combined with escalating competition hurt crushing margins for companies including China Agri-Industries Holdings. Its oilseeds and grains division posted a pretax loss of US$40 million in the quarter on negative crush margin and depreciation of the yuan against the U.S. dollar, Wilmar said today.

“The poorer performance was largely due to losses at oilseeds and grains from a continued difficult operating environment in China and lower plantation profits reflecting lower prices, a drop in production yield and higher production cost,” Wilmar said in the statement.

The stock gained 1.8% to $3.39 at the close in Singapore today, before the earnings announcement. Wilmar has declined 32.2% this year, making it the worst performing member on the benchmark Straits Times Index.

“Crush margins in China remain weak,” Nomura Holdings Inc. analysts Tanuj Shori and Vishnuvardana Reddy wrote in a note dated Aug. 1. “We worry Wilmar may have been at the wrong end of rising soybean prices.”

The stock gained 1.8% to $3.39 at the close in Singapore today, before the earnings announcement. Wilmar has declined 32.2% this year, making it the worst performing member on the benchmark Straits Times Index.

China Agri, the Hong Kong-listed unit of China’s largest grains trader Cofco, said June 28 first-half profit fell as grain and soybean prices rose while demand for starch and rice was sluggish and China’s oilseeds crushing capacity continued to expand.

Soybean futures traded in Chicago averaged US$14.03 a bushel in the quarter, compared with US$13.61 a bushel a year earlier, and reached a record $16.915 a bushel on July 23 as the U.S. endured its worst drought in a half century.