Japanese commodity trader Mitsui & Co will close its Brazilian Multigrain business by the end of this year after several years of financial losses due to stiff competition in the sector.

Soyabean and corn trader Multigrain – which was acquired by Mitsui in 2011 for 47bn yen (US$431.47M) – had been losing money for the past four years, wrote Reuters on 8 May.

Mitsui chief financial officer Takakazu Uchida said the direct reason for the continuous losses was “excessive competition” after the number of new entrants in the sector – including Chinese and other global grain operators – had grown rapidly.

In February, Mitsui warned that restructuring of Multigrain was likely and, in March, it revealed that the Brazilian unit had dragged the company’s full year earnings down by 47.7bn yen (US$434.83M), leading to greater losses than what Mitsui originally paid for Multigrain.

Nonetheless, Mitsui’s consolidated net profits rose 37% in the financial year ended on 31 March, due to stronger prices in iron ore and coal.

According to Reuters, Japanese traders, such as Mitsui and its rival Marubeni Group, had invested enthusiastically in foreign grain businesses some years ago but, for the most part, they had so far failed to turn the investments into profits.