Bunge (BG), one of the world’s largest grain marketers, is flying high thanks to record grain prices.

First-quarter net income soared to $232 million from $63 million during the first quarter of 2010. That jump was in no small part to its grain-marketing business globally, including in Argentina, one of the largest exporters of several of Bunge’s key commodities.

Bunge reported revenues of $12.19 billion in the first quarter, up from $10.35 billion a year earlier. Earnings per share diluted rocketed to $1.49 from 31 cents a year earlier.

Bunge was removed in early May from Argentina’s registry of grain traders, which had allowed it to benefit from significant tax breaks. Bunge has allegedly avoided paying $300 million in taxes, something the company denies vehemently.

The decision came after an October 2010 raid by Argentina’s tax agency as part of a major crackdown on potential tax evasion across the agricultural sector.

Thanks to its extensive network of buyers throughout Argentina, Bunge doesn’t expect there to be any direct effects on its ability to export corn, soybean, and wheat. But it will likely suffer from exposure to full tax liabilities as well as having to use intermediary brokers, a practice it had phased out.

The use of its nationwide network of grain elevators will not be allowed until the company has been restored to the grain registry, and that won’t happen until the tax issue is resolved. That’s the part that is likely to hit the company’s Argentina operations in the pocketbook.

"The current market environment puts a premium on an efficient, flexible supply chain and excellent risk management," Bunge CEO Alberto Weisser said in a statement shortly after the release of quarterly earnings but before the spat with the Argentine tax agency.

In good company

Argentina’s tax authorities have hit hundreds of agribusinesses, both domestic and foreign, in the past few months in raids that have involved more than 1,000 tax inspectors.

Louis Dreyfus, Cargill, and other grain traders have also been suspended from the grain registry for alleged tax irregularities, but Bunge is the first to be removed from the list all together.

Analysts tracked by Thompson/First Call have a median price target of $80, an 11 percent premium over recent trading action.