BENGALURU Australia’s Graincorp raised its annual profit forecast for the second time, as the agribusiness firm capitalises on strong demand for grains and vegetable oils amid a supply crunch from the war in Ukraine, pushing its shares up more than 10%.

The profit upgrade on Wednesday was also encouraged by expectations of above-average East Coast Australian (ECA) crop in year 2022/23, combined with a favourable three-month rainfall outlook. Global wheat prices reached record levels in early 2022 as major exporter Ukraine’s supplies were essentially cut off due to Russia’s invasion, triggering a five-fold jump in Graincorp’s first-half profit and allowing it to pay a special dividend. Australia, the world’s sixth-largest wheat exporter, has been the top alternative for buyers seeking to replace cargoes from Russia and Ukraine, and is set to ship a record volume this year.

The company said it now expects fiscal 2022 underlying net profit after tax between A$365 million ($254.08 million) to A$400 million, up from its prior forecast of A$310 million to A$370 million. Its shares soared up to 10.3% to A$8.43, before paring some gains to trade 6.3% higher by 0122 GMT.

“This positive outlook is driving an increase in fourth-quarter activity and supporting export volumes, forward contracted grain sales and supply chain margins,” Chief Executive Officer Robert Spurway said. The agribusiness and processing businesses were set to deliver record financial results, Graincorp said, adding, its supply chains were operating at close to full capacity to export grains.

“A lot of the investors have jumped on the forward guidance positivity But the general theme is that the company believes that there is strong ongoing demand for their products despite the macro backdrop,” said Azeem Sheriff, market analyst at CMC Markets. The company said it was also investing in additional bunker storage and handling equipment to maximise receivable capacity at key sites across its network.