Gruma, S.A.B. (NYSE: GMK), the world’s leading flour manufacturer, affirmed today that its MX$2.8 billion (US$168 million) loss during the third quarter of 2008 was linked to losses on exchange rate derivative instruments, according to a report in El Economista. 

Gruma specified that the losses were caused by a 1,805% increase in the company’s cost of financing, which was “the result of unrealized losses on exchange rate derivative instruments representing a virtual fair market value loss of US$291 million.”  This loss sharply contrasts to Gruma’s profit of MX$799 million (US$76 million) for the third quarter of 2007. 

At the close of September 2008, the report said that Gruma’s total debt was US$772 million.  The company’s financial issues could have ripple effects world-wide: Gruma has 19,000 employees, 91 plants, and sells its products in 50 countries, including the U.S. Mexico, Venezuela, and Australia, as well as in Central America, Europe, and Asia.