By Riaz Haq

Bunge, the third biggest US agribusiness company after
Archer-Daniel-Midland and Cargill, is buying Chicago-based Corn
Products International Inc. for $4.2 billion in stock to add
corn-based sweeteners as demand increases for soft drinks and
processed foods in China, India and Pakistan, according to US media
reports. This acquisition enlarges Bunge's international footprint in
emerging economies to drive its growth.

Corn Products is the fourth-largest maker of high-fructose corn syrup
in the U.S. and will give Bunge new customers in Pakistan, South Korea
and Thailand, Credit Suisse analyst Robert Moskow said in a note on
this deal. Corn sweeteners are used in soft drinks and processed foods
instead of traditional cane or beet sugar because of their lower cost
and higher concentration. A single 12-ounce can of soda has as much as
13 teaspoons of sugar in the form of high fructose corn syrup,
according to San Francisco Chronicle. China, India and Pakistan have
all seen double digit annual growth in consumption of soft drinks and
processed foods for several years. Last year, PepsiCo International
sales were up 22%, an impressive increase fueled by double-digit
growth in China, Russia, Pakistan and the Middle East.

According to the Wall Street Journal, corn and soybeans are the two
biggest crops grown in North America and the two companies already are
selling ingredients to many of the same players in the food and
brewing industries. For Bunge, the combination will give it a bigger
presence in several developing countries where a growing middle class
is demanding more Western-style foods. Corn Products has extensive
corn milling operations throughout South America. The company also
operates in Mexico, Pakistan, South Korea and Thailand, among other
places.

Corn Products was established in 1906 through a combination of U.S.
corn-refining companies. The company processes corn in South America
and has operations in Asia and Africa. In April, the company said
first-quarter profit advanced 29 percent to $64.3 million, according
to Bloomberg.

Processed foods and soft drink companies are often blamed in the
United States for dramatic increases in obesity and diabetes,
particularly among children. Some even accuse them of being merchants
of death, not unlike the big tobacco companies. Many health experts
argue that the issue is bigger than more calories. The theory goes
like this: The body processes the fructose in high fructose corn syrup
differently than it does old-fashioned cane or beet sugar, which in
turn alters the way metabolic-regulating hormones function. It also
forces the liver to kick more fat out into the bloodstream leading to
heart disease.

While the presence and growth of Bunge, Pepsi and other food giants
are likely to create more jobs in emerging economies such as India and
Pakistan, the price for this opportunity is likely to be the danger of
greater health problems associated with fats and corn sweeteners in
processed foods and soft drinks.

Similar or even greater health threats are coming from the major
expansion of tobacco giant Philip Morris in emerging economies. As the
smoking rates in developed countries have slowly declined, they have
risen dramatically in some developing counties, where PMI is a major
player. These include Pakistan (up 42% since 2001), Ukraine (up 36%)
and Argentina (up 18%), according to the Wall Street Journal. Philip
Morris is currently building a major new plant in Pakistan.

Globalization offers many benefits, including access to good jobs and
better living conditions in the emerging economies. However,
globalization also brings with it all the ills that have been
witnessed in the West, including environmental deterioration and
life-style diseases such as diabetes, heart-disease, various forms of
cancer etc. The challenge for Pakistan, and other countries like it,
is to learn from the mistakes of the West. Instead of just repeating
such mistakes, Pakistan, India and China must find ways to extract the
benefits while minimizing the cost of modernization.