Geneva-based Vitol, the world’s largest oil trading house, announced plans to become the latest company to move into the lucrative oligipoly business of food trading. Vitol is a highly secretive energy, sugar, metals and minerals trading giant run by Ian Taylor, one of Scotland’s wealthiest men with an estimated £155m fortune who has donated more than £500,000 to the Conservative Party. Vitol is the third major energy trader to add food staples to its portfolio in recent months.
Vitol joins an elite group of five dominant food traders who collectively control 90 per cent of the global market for grain. Glencore, the Swiss trading giant listed on the London Stock Exchange and run by multi-billionaire Ivan Glasenberg, is best known. The others are Cargill, Archer Daniels Midland, Bunge and Louis Dreyfus.
Like Vitol, the big-five food traders are largely based in or near Geneva and collectively made billions of dollars of profits last year, much of it from providing an essential trading function, buying commodities from farmers, shipping them around the world and selling them to users.
There is evidence that some of the dominant traders engage in speculative trading – investing in agricultural staples purely for financial gain through “futures” contracts – an activity critics say exacerbates price volatility. Christine Haigh, food and finance campaigner at the World Development Movement anti-poverty group, said: “Like the banks, the big traders also play the market as speculators. While they might not like to admit it, it’s widely acknowledged that these players trade many more futures contracts than necessary to protect themselves from losses due to price fluctuations.”
Glencore: Controls roughly a tenth of the global grain market. Set to merge with Xstrata this year.
Cargill: World’s biggest trader. Distributes nearly every commodity.
Bunge: Employs 35,000 people in 40 countries, processing oilseeds, wheat, corn and sugar cane.
Louis Dreyfus: Operates in more than 50 countries and transports 70m tonnes of food a year.
ADM (Archer Daniels Midland): World’s third largest processor of oilseed, corn, wheat and cocoa.
Vitol: World’s biggest oil trader; soon to join the big league of food traders.
Vitol joins an elite group of five dominant food traders who collectively control 90 per cent of the global market for grain. Glencore, the Swiss trading giant listed on the London Stock Exchange and run by multi-billionaire Ivan Glasenberg, is best known. The others are Cargill, Archer Daniels Midland, Bunge and Louis Dreyfus.
Like Vitol, the big-five food traders are largely based in or near Geneva and collectively made billions of dollars of profits last year, much of it from providing an essential trading function, buying commodities from farmers, shipping them around the world and selling them to users.
There is evidence that some of the dominant traders engage in speculative trading – investing in agricultural staples purely for financial gain through “futures” contracts – an activity critics say exacerbates price volatility. Christine Haigh, food and finance campaigner at the World Development Movement anti-poverty group, said: “Like the banks, the big traders also play the market as speculators. While they might not like to admit it, it’s widely acknowledged that these players trade many more futures contracts than necessary to protect themselves from losses due to price fluctuations.”
Glencore: Controls roughly a tenth of the global grain market. Set to merge with Xstrata this year.
Cargill: World’s biggest trader. Distributes nearly every commodity.
Bunge: Employs 35,000 people in 40 countries, processing oilseeds, wheat, corn and sugar cane.
Louis Dreyfus: Operates in more than 50 countries and transports 70m tonnes of food a year.
ADM (Archer Daniels Midland): World’s third largest processor of oilseed, corn, wheat and cocoa.
Vitol: World’s biggest oil trader; soon to join the big league of food traders.
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