A Conversation with Colin Iles


Good morning, Colin.  You are responsible for both cotton and sugar at Viterra. Are the two commodities similar?

Commodity traders tend to focus on the differences between their different commodities, but, ultimately, once you block out the technical language and focus on the concepts, they’re all the same.

Cotton and sugar are similar in how the trade houses get involved in the futures expiry process.  As a percentage of open interest, I suspect that the positions taken into the expiry – or in the case of cotton, into the notice period – are larger in sugar and cotton than in other agricultural commodities.

Sugar and cotton trading distils down to ‘What is your view on the spreads?’ Your view on the spreads will impact your opinion on the physical premiums. The two are interrelated.

What is the secret to making money in cotton trading?

If there is a secret, it is assessing value.

You can assess value in various ways. In terms of time spreads, the value of cotton may be too low relative to the future, and you can arbitrage that difference.  In terms of geographies, you can find dislocations in value across different regions. Essentially all we do is look at the value of something relative to everything else.  We try to pick out the outliers that are either over or undervalued and make it work. Trading is about assessing value. You must reduce every discussion down to what value am I measuring this against?

Do you trade spreads and differentials more than the flat price?

I like to trade the time spreads in cotton because time is our only consistent value benchmark.

I don’t like trading cotton flat price. When you trade sugar flat price, you get price points where things happen and the balance sheet changes. The best example is the optionality that the Brazilian mills have in whether to produce ethanol or sugar. You can look at the price of sugar compared to ethanol and make a robust case for the flat price to move higher or lower. You have a value anchor where a move in price changes the balance sheet.

We don’t have that in cotton.  Fundamentally, it doesn’t matter if cotton moves from 65 to 90 cents a pound. It doesn’t bring significantly more cotton into production. Nor does it change demand from the spinning mills in Vietnam or the price of jeans on a shelf in Walmart in Texas. Consequently, trading flat price in cotton is often an exercise in second-guessing sentiment.

What advice would you give to a young person beginning in the cotton trade?

Get involved in the physical commodity and understand the full implications of any trade. Once you make a sale, someone must create a shipping order, book containers, send people into the cotton fields to draw samples and test them. Someone must go to the bank to open a letter of credit. You must understand how all those things interact.

You don’t have to be an expert in everything, but you must talk knowledgeably about every aspect of trading. You must understand the implications of tweaking one part of a trade; what does it mean further down the chain?

You must also be comfortable with large amounts of data. The future of trading is in understanding and analysing data.  On the production side, it may be in interpreting satellite crop data. On the demand side, it may involve getting live feeds on point-of-sale volumes in retail outlets.  Data mining and analysis are becoming a crucial part of our market analysis. It is a huge opportunity.

Thank you, Colin, for your time and input!

© Commodity Conversations ® 2022

This is a short extract from my book Commodity Crops & The Merchants Who Trade Them available now on Amazon

A Conversation with Todd Thul

Good morning, Todd. What’s your current position within Cargill?

I have a dual role. I have led Cargill’s global corn and ethanol trading activity for the last seven years, managing the worldwide teams. About one year ago, I also became managing director of our global grain business. That role goes beyond trading into the more commercial side of the company.

What is it that you like about the commodity trading business?

People usually explain commodity trading as a primary business that moves goods from surplus to deficit areas across time (carry) and place (dislocation) and form (processing). It may not sound like the most exciting thing, but it’s fascinating once you get into it.

There are many different aspects to trading and ways to approach it. I particularly enjoy the interaction with people, both customers and suppliers, that you get when you handle physical products, moving them along the supply chain. This personal interaction is an essential part of the business for me.

I also enjoy being involved in the shipping side, as well as leading teams, getting the best out of everyone, and mentoring teammates in their careers.

What gives you an edge both personally and as a company?

Collection, interpretation, and analysis of data are essential, but so too is teamwork.

What gives a team an edge?  Being competitive and hungry to win. What does that mean? It means that you’re gritty and creative, and you are constantly challenging and evaluating the situation around you, looking for opportunities.

Look at the analogy of a sports team, say a football team. A team plays together, works together, constantly looks for opportunities to score. At Cargill, teamwork is a vital part of our culture.

As a trader, you work in your own space, trying to leverage everything you can within that space, but your role is to contribute to the team’s success.  Teamwork is as essential in trading as it is in sports.

Whenever I talk to recruits, I emphasise the overlap between sports and trading.

What advice would you give to a young trader?

Don’t limit yourself to one product or one commodity. I would advise young traders to get to know and understand as many products and aspects of the business as they can. Gain experience across the space, across geographies and across products. Go as deep and as wide as you can and learn about as many commodities as you can.

During my career, I have traded both barge and ocean freight. This experience has been invaluable to me on the bean, corn, and veg-oil desks. You can’t trade commodities without understanding freight and logistics.

Likewise, my time on the vegoil desk has been invaluable when talking about or trading biofuels.

The approach to trading and the skill sets you need are similar across different products. There’s always a technical learning curve specific to each commodity, but your cross-commodity exposure will give you an edge as a trader.

Our ability to give traders experience over a range of commodities is one of Cargill’s strengths as a company.

What would be a likely career path for a young person joining Cargill today?

If you were to join Cargill, we would start with the business basics to understand what everyone else on the desk is discussing! We would also teach you the concepts and mechanics of supply and demand, logistics, freight, and risk management.

Most people will have some experience at a domestic regional location – in EMEA or the Americas – where you can learn and understand the basics of origination, where the supply chain starts.

That won’t be the path for everyone, but that’s how I started. Honestly, I think that if you want to learn something, you must go to the core, and origination is one of Cargill’s core businesses.

From then, your career will follow a natural pathway of growth and evolution of responsibility. You will go from talking local to regional markets, then on to a specific export market, entire geography and then global. It is not Cargill-specific; it is the general path a recruit would experience in big ag companies.

During your career, you will build your risk management skills and develop your risk tolerance and style. People sometimes believe they know their tolerance and style, but you only understand that through experience.

 What qualities are you looking for in a candidate?

I look first for a competitive team player.  You need to have a strong drive for results and equally want your teammates to win.  I’m also looking for someone with a creative side. I’m less interested in the specifics of past experience and more interested in their approach to things.  Do you seek challenges and like to find a solution for a puzzle?  I’m generally looking for that competitive edge combined with a creative side.

I am also looking for balance. Someone with an appetite and understanding for risk, balanced with the ability to manage that risk. I’m always looking for someone cool under pressure. The moment when everybody else is panicking is usually when an opportunity presents itself. That’s a complex characteristic to identify when you’re interviewing somebody, but it is something that I’m always looking for.

And the last thing is leadership. I believe that no matter what your role is, leadership is a high-value characteristic. How you manage yourself, how you interact with people, how you handle adversity. These are all relevant attributes for somebody running a commercial business, such as a trading desk.

Is there anything you would like to add?

Only to say that this business is awesome.

There are so many moving parts. What’s the future of EVs, the energy transition and renewable fuels, of China? I don’t know, but it excites the crap out of me that I don’t know. It’s my nature. It’s the nature of people we’re looking for, people who want the challenge to go figure it out.

Our industry is ever-changing, fast, and fascinating. Go for it!

Thank you, Todd, for your time and input!

© Commodity Conversations ® 2021

This is an extract from Commodity Crops & The Merchants Who Trade Them – available now on Amazon.

A conversation with Dave Behrends

Good morning, Dave. Could you please tell me your current role?

I am the global head of trading and a partner at Sucafina.

What is the key to success in coffee trading?

To get to the top in physical trading, you must first master the fundamentals. Successful coffee traders have experience in operations and finance and understand research, balance sheets, costing structures – all the minutiae that make up our business.

Once you have that base, coffee is still a people business, so you need a certain charisma and an ability to work with people. You need to understand the complexities of what the more prominent brands want – what do you need to do on the sourcing side to meet your clients’ expectations today and tomorrow. Traders need foresight and vision. The business is evolving so rapidly that you will fall behind if you do not think about those things.

Today’s successful traders have more quantitative backgrounds than in the past; they understand and process data in a meaningful way more than trusting their gut instinct. They also need to be digital natives and have sustainability embedded into their DNA.

How important is coffee in terms of development?

Can coffee save the world? No, but we can improve farmer incomes for the 12.5 million coffee farms worldwide and remove some of the volatility inherent in the business. We can work towards better social and environmental practices. If we do that, we give our customers an additional reason to enjoy coffee, which drives more consumption and has an increased impact on the whole supply chain.

To what extent does traceability affect your ability to be a trader?

Traceability is fundamental to our business. If you go to a supermarket and pick up a product that doesn’t list the ingredients and nutritional information, you will probably put it back on the shelf. That is the way traceability is going. In the future, if you don’t know where a product comes from and its route to get to you, you won’t buy it. Not only that, but you also want to see the product’s environmental and social impact – you want to feel good purchasing it.

In a way, it de-commoditises the coffee supply chain. Different clients have different needs, and various producers harvest different coffees. As merchants, we are the bridge between the two.

We are also increasingly involved in prefinancing farmers, improving quality while reducing inputs within the supply chain. Increasing the visibility within the supply chain gives our clients greater confidence in buying from us. It moves us towards building long-lasting partnerships with producers and customers.

You were the founder and the driving force behind Farmer Connect. How is that going?

Farmer Connect is an end-to-end platform that allows participants to share traceability, price transparency and ESG data in a standardised way across the supply chain.

I am pleased with the progress so far. I never set out to be the founder of a tech start-up company. I was just a trader that believed in traceability – and I thought that traceability depended on data. There was no mechanism to get data from the farm to the consumer, and I felt we needed one.  However, when I spoke to brands and retailers, they constantly told me how hard it was to go into every supplier’s website and see the data presented in different formats.   Their big ask was that the industry rally around a standard solution.

Although I did help get Farmer Connect started, I am not involved in the day-to-day operations. I don’t want any conflicts of interest, and I genuinely hope that it can be a tool that benefits the entire industry, including competitors of Sucafina.  Farmer Connect has expanded now into cocoa and has quite a few conversations with other agriculture verticals, so I am pleased to see it become more than just a coffee traceability platform.

Additionally, brands using Farmer Connect have been pleased with their sales and consumer engagement.   For me, that further validates the voracious appetite consumers have to embrace new technologies and learn more about the products they love the most.

Thank you, Dave, for your time and input. 

© Commodity Conversations ® 2021

This is a short extract from my book Commodity Crops & The Merchants Who Trade Them – available soon.

A (2nd) Conversation with Soren Schroder


Good morning, Soren. Could you please tell us what you have been doing since you left Bunge?

I left Bunge in June 2019 after six years as CEO and after 36 years in traditional agricultural trading and processing with Continental, Cargill, and Bunge. I am now trying to use my experience to help emerging companies across the full spectrum of the agricultural value chain.

What areas have attracted your attention?

I have focused on optimizing existing agriculture using modern technology: indoor agriculture, digital data around agriculture and food, natural rubber, micro-biological products that improve yields, carbon capture, and remote sensor equipment to monitor grain quality.

Aquaculture is perhaps also a piece that deserves special mention. Next to cultured meat grown in fermentation tanks, aquaculture is probably the most efficient way to transform feed into protein. It can make a very positive environmental impact as feed, sensor and data technology evolves further.

So too will indoor controlled agriculture, starting with leafy greens and quickly evolving into vegetables, fruits and berries. It is a sector undergoing a massive technological revolution, and it brings production closer to the consumer.

Over the past 75 years, the focus has been on increasing agricultural yields while at the same time reducing costs. It has been about growing enough calories. We still want to produce enough calories, but we now want to develop the right kind of calories in a way that doesn’t harm the environment, repairs the soil, and produces nutrient-dense food.

It is a new revolution: using technology to improve existing production techniques and regenerate soils. The goal is to harness the power of ‘Production Ag’ without all the adverse side effects.

The world is working to decarbonize the economy. Is that driving this new agricultural revolution?

Decarbonization is part of this new agricultural revolution, but there are other forces at work, all pointing in the same direction. For example, the demand for alternative proteins is driven by consumer preference for healthier food and concerns over animal welfare; it’s not just about carbon.

But it’s all moving in the same direction. Alternative protein was not created only because of a quest for decarbonization, but it’s part of the equation. You see this with new initiatives from the USDA and the new Green Deal in Europe. Both support the transition to the next stage of precision farming, where agriculture contributes to carbon capture or reduces farming’s negative impact on the environment. At the same time, it allows farmers ways to differentiate between the crops and products they produce.

I put indoor farming, genetics, data management, artificial intelligence, and robotics in the technology bucket. Am I missing something? 

I would certainly include soil health; it is almost a bucket on its own. Soil health is the key to unlocking many carbon initiatives and finding better ways to deploy and create plant nutrients.  The USDA and many companies are trying to figure out ways to monetize carbon captured under different farming practices and protocols. We must develop carbon capture standards. The USDA is best placed to do that, especially if it means financial incentives to allow farmers to change practices.

Carbon farming comes under the bullet of soil health. It is already happening but not yet at scale.  The scale will come with standards.

It seems that regenerative agriculture has a significant role to play.

There are – at least – two schools of thought on regenerative agriculture.

The first is where you let nature do its work, and you learn from the best practices that have been proven over the centuries. You don’t till. You plant cover crops.  You have farm animals that fertilize the ground, and you thoughtfully rotate them. It’s an integrated system where, over time, you create a healthy soil microbiome. Using modern equipment and data results in similar yields and possibly better profitability than you would get using traditional technology, chemicals, and fertilizers.

There’s another school of thought where regenerative agriculture means using all the tools in the toolbox. One tool might be CRISPR technology for seeds. Another might be advanced micro-ingredients for nutrient build-up in soil that can substitute for chemical fertilizers and eliminate some pesticides. It is about using technology to its fullest extent to improve soil health and capture carbon in a turbocharged way.

I think the result might be the same, but how you get there is vastly different. Big Ag is going for the second option, using every tool in the toolbox.

Big Ag faces a problem with consumers’ apprehension over and understanding of technology.  Consumer attitudes in the western world could ultimately prevent farmers from efficiently producing enough food to feed everybody and do it in a sustainable, healthy way. We need to find a way for the consumer, the farmer, and the technology providers to communicate and establish trust.

Thank you, Soren, for your time and input.

© Commodity Conversations ® 2021

This is a short extract from my upcoming book Commodity Crops & The Merchants Who Trade Them.

Assets are essential – Raul Padilla


Raul Padilla is President, Global Operations, Bunge. He was previously CEO of Bunge South America, having served as Managing Director, Bunge Global Agribusiness and CEO, Bunge Product Lines since 2010. Bunge is the largest oilseed crusher in the world, with about 10 per cent of global capacity.

Good morning, Raul. Could you tell me how you got into commodities?

First of all, I have to tell you that this is a particular time for me. After 44 years in the business, I am taking my retirement at the end of this year.

I started my career in 1977 when I joined a trainee program with an André company in Argentina.  After an initial training period, I began as an assistant oilseed trader, working on trade execution, finance and shipping. I then became a soymeal trader on the domestic market. Later, I was in charge of the soybean oil exports to Latin America, after which I spent two years at André’s head office in Lausanne, Switzerland.

Did you stay with André?

I left André within a couple of years of returning to Argentina and moved to a locally owned oilseed crusher, Guipeba, as commercial director. In 1995 Ceval, a large Brazilian company bought Guipeba and, in 1997, Bunge bought Ceval.  It was almost a reverse-takeover. I became CEO of Bunge’s Argentine operations in 1998.

When did you join Bunge’s executive committee?

In 2001, when we did the IPO. At that time, we were a confederation of companies and countries that lacked structure. It made it difficult for everyone to work together. It became evident that we needed a marketing arm to bring together all our physical origination/production and destination operations.

We looked at various options, including merging with one of our competitors. We talked at length with Dreyfus, but we eventually decided that we would be better on our own. I helped A. Gwathmey, Bunge’s Ag. Product Line CEO at that time, put together a consolidated and central marketing arm. We opened trading offices in Geneva and elsewhere.

In 2010, I moved to White Plains to become responsible for Bunge’s agri-business segment, where I integrated the different divisions and companies within the company. I did that for four years, but I grew weary of the corporate side of the business. I like to run an operation and be part of the day-to-day action. So, in 2014, when the CEO of Bunge’s Brazilian operations (Pedro Parente) decided to leave the company, I asked to replace him.

Brazil is – and always has been – an essential piece of Bunge. It has been almost half of the company. In 2014 we had three divisions in Brazil: sugar, agribusiness, and food and ingredients.

Tell me a little about Bunge’s decision to go into sugarcane.

I was not in favour of Bunge going into sugar. I didn’t like it, not because I knew the sugar business, but because it made us farmers – and farming was not our business. Sugar is eighty per cent agriculture. Bunge is not an agricultural producer; it is a merchant and processor.

Anyway, that’s history, but I ended up being responsible for Bunge’s sugar and bioenergy operations until we merged it with BP in 2019. I continue to sit on the board.  We have a great partner in BP, and the team is doing an excellent job with the combined business.

Were the other businesses working well?

Our results were not what they should have been, and we decided we needed to make another adjustment. In 2017, we split operations into three regions: South America, North America, and Europe and Asia. I took the responsibility to integrate the South American functions. However, we were still not performing as well as the shareholders and we wanted.

So, at the end of 2018, we shook the tree again. Greg Heckman took over as CEO, and the company made changes in the board. Everyone knew that we had to do things differently. We had to change the way we were operating throughout the whole company. I like to describe it as ‘pushing the reset button’.

Does that mean you are now doing less trading and more merchandising?

We manage the mismatch between farmers selling and consumers buying. Addressing that mismatch forces us to have a market view. Sometimes the supply chain will give us a structural margin that we can lock in without thinking about it, but it doesn’t happen every day. There is risk in each of our supply chains. As part of our company reset, we have changed the way we managed risk.

Are physical assets important to trading?

They are essential. You need physical assets to receive, store and process agricultural commodities. You can’t be in the business without physical assets. Processing is critical in soybeans as you can either sell beans or process them into oil and meal. And as you move down the supply chain, you can market the oil in retail bottles or, for example, for biodiesel. We have 35 per cent of the packaged oil market in Brazil – a vast number of bottles!

If you are a grain exporter, you can buy and sell corn, but most importantly, you have the option to do nothing – to neither buy nor sell. You don’t have that luxury in an oilseed supply chain. Capacity utilisation is essential to efficiency. We at Bunge process 45 million tonnes of oilseeds each year. You cannot say, ‘OK, I do not see things clearly; I will step out of the market for a while.’ That doesn’t happen when you manage a crush operation.

People sometimes accuse trading companies of controlling markets.

The only thing that trading companies can control is their cost structure and risk appetite; that’s all.

Moving on to biofuels, is renewable diesel an opportunity – the next big thing?

It is at the centre of the strategic discussions in the industry.

Biofuels fell out of popularity when food prices rose in the 2000s, and there is a danger that history will repeat itself. I fear that food inflation and the food versus fuel debate is going to resurface. We won’t be able to avoid it, although the focus on climate change and sustainability will change the dialogue from last time.

In addition to the food versus fuel debate, the amount of CAPEX required to make a significant bet in the renewable diesel sector is substantial. It’s a big cheque, and you have to be pretty sure of what you are doing and the projected returns.

So yes, renewable diesel is a big thing – a significant factor that we have to consider. We will not rush in; we don’t have all the answers, but we are doing the work as things develop.

Are you worried about peak meat?

We are following this constantly, and the company has invested in alternative meat companies. We did so partly to help us better understand the changes in consumer demand and as an investment in an expanding sector. We debate meat demand constantly – at every commercial discussion.

How has trading changed since you have been in the business?

Today, everyone has access to the same information, real-time on their phone. It is how you interpret the data that is important now, rather than the data itself. We used to have better information, but now we all have to analyse the same information faster and better.

Now everything is immediate; we have instant communication with customers and suppliers. We also have quick access to our colleagues. Over the past year, due to the pandemic, we have all been working from home, connected by technology. We have run a global processing and trading business from home. It is an extraordinary achievement that demonstrates how the world has changed. It is incredible how things have changed so fast.

Would you advise a young person to join the industry?

Absolutely.  Our business is never dull. It changes from hour to hour and even from minute to minute. You can have one scenario in the morning and a completely different one in the afternoon. You have to rethink everything.

You will never be bored, but you will have to be on your toes 24/7.

Thank you, Raul, for your time and input!

© Commodity Conversations ® 2021

This is a short extract from an interview that I will include in my upcoming book ‘Commodity Crops – And The Merchants Who Trade Them.’

Wheat is not wheat – Fausto Filice


Fausto Filice was head of wheat trading for Cargill before moving to Bunge in 2013. He retired from the corporate world in 2019 and now lives in Verbier, Switzerland. I asked him how the wheat market has changed over the years.

Wheat was the main focus of the trading floor when, in 1987, I joined Cargill Geneva after two years in their Milan office. The top managers in Geneva were all former wheat traders, and wheat was the commodity with the most opportunities. It generated the bulk of the profits.

At that time, trading meant making deals; wheat was the commodity with the most opportunities to make deals. The Soviets and Chinese were the big players. Striking supply deals with them gave you a significant advantage in market knowledge. Other governments were also willing to make deals secretly.  Some of the more notable deals were even kept secret from young traders on the trading floor for several days!

There were also government entities on the supply side: the Australian Wheat Board and the Canadian Wheat Board made secret deals with big buying entities; monopoly players dealing with other monopoly players.

Wheat feeds people directly and is the commodity that is most susceptible to government involvement.

It was also the period of big export subsidy wars; the US and EU were trying to gain market share and reduce their costly intervention stocks. The business was about having large trades in the books and then ‘bidding’ Washington and Brussels for the highest subsidies. It was when prominent global players like Cargill, Continental, and LDC had a significant competitive advantage.

All of this has changed over time as the wheat market has progressively liberalised and privatised.

How would you describe the wheat market today?

The wheat market evolved in the 2000s as the Black Sea became an increasingly prominent player. At the same time, we had the liberalisation of Canada and Australia, so those markets also opened to traders.

There are no dominant players in today’s global wheat market – and no more large secret deals.  Instead, many small companies are originating, marketing and shipping wheat from one or two origins, often serving specific customers with specific quality requirements.  Large multinationals like Cargill, Bunge and LDC try to compete with these smaller companies in the various wheat export geographies, but they are often the 4th, 5th or 6th player in these areas.

The large trading companies retain a competitive advantage: although they may not be the biggest in any of the significant exporting corridors, they participate in all of them.  Cargill is a big player in soft red winter wheat in the US, but they are not the largest. Likewise, they are big players in spring wheat from the PNW (Pacific North West), but they are not the biggest.  The same reasoning is valid for Bunge, LDC, ADM or Viterra. The result is that even though these companies don’t dominate trade flows, they have the best global overview of flows and, consequently, the global supply and demand.

Today the global wheat market is highly fragmented, with dozens of smaller niche players, strong in their origins but without a global overview. Only a percentage of what goes on in the wheat market is visible; many private deals are going on in the background.  It makes things interesting.

Over your career, you have traded corn, wheat and soy. Which do you prefer?

I prefer wheat. It is more complicated than the other grains. Yes, there’s a global wheat market, but, as I said, it’s a compilation of smaller niche markets that intersect within themselves, but only partially.

What advice would you give to a young trader in the wheat market today?

If you’re a young wheat trader, you’re most likely working for a company that is a niche player. It could be a Russian, Ukrainian or Romanian company working exclusively out of the Black Sea area. Or it could be a French or German cooperative. You will be a specialist in your region but ignorant of other parts of the globe. I would encourage you to learn as much as possible about the different areas and how they work.

For various reasons, different countries – and the buyers in those countries – buy specific qualities. The spreads between these qualities can be technical.

Wheat is not wheat. There are perhaps as many as 20-25 different types of wheat traded, and I would advise you to learn as much as you can about the relationships between them.

You can trade these differentials while learning to understand the nuances between the different origins and qualities and how and when they intersect. This knowledge will allow you to have an opinion on the overall direction of the market.

Agricultural commodities are weather-based, but you have to consider all the political drivers, whether a change in Chinese policy, Russian or Argentinian export taxes or Brazilian strikes. These factors are constantly changing. You have to be able to weigh those variables the right way. It’s like a never-ending game of chess.

Would you recommend a young person to join the sector?

Absolutely!  I find commodity trading more interesting than, say, looking at corporate balance sheets or bond yields. Commodities are much broader; they encompass more facets of the global economy.

Commodity trading is the pulse of the world economy.

Thank you, Fausto, for your time and input!

© Commodity Conversations ® 2021

This is an extract from my upcoming book, Commodity Crops – And The Merchants Who Trade Them.

Women in Coffee

In 2020, I interviewed Shirin Moayyad of Sweet Bean Coffee for my book Crop to Cup and my blog. I now invite her back to take part in our ‘Women in Commodities’ series.

Good morning, Shirin. You have recently started selling a range of coffees produced by women. Could you tell me a little about your motivation for that?

There is a belief in my parents’ faith that if you have two children, one boy and one girl, you should educate the girl first as she is likely to have fewer opportunities in life than the boy. My parents raised me with this early belief in affirmative action.

When I talked with David Griswold, the founder of Sustainable Harvest, he told me that women-produced coffee is often better than men-produced coffee. Is that your experience?

Dave introduced me to Fatima Ismael, a lady cooperative coffee producer and agronomist in Nicaragua. In her case, and in the case of the women with whom she works, it is true that women-produced coffee is better than men-produced coffee.

Fatima compares woman farmers to women as mothers. We care for the earth as we care for our children. Of course, that isn’t the case everywhere, but it seems to be in the case for Fatima and Nicaragua.

David also mentioned that paying women for coffee means that more money stays with the family than when you pay men. Is that a factor in your decision to sell women-produced coffee?

The Partnership for Gender Equity – a spin-off from the Coffee Quality Institute – is one of the more prominent and more renowned initiatives around women in coffee. It estimates that for every dollar that a woman coffee grower earns, she will spend 90 cents on the household; a man would pay 40 cents. Even if those figures are not entirely accurate, they do give an idea of the situation.

Nicaragua is well-known for women coffee growers. Is it a cultural thing?

You are right; there are a lot of women coffee growers in Nicaragua. During the civil war, the men were away, and the women had to run the farms and work the land. It helped the development of women in farming in the country.

Women supply 70 per cent of the labour force on coffee farms in Ethiopia, but few are educated, and many are illiterate. In Brazil, by comparison, I met women coffee growers who tended to be from the higher echelons of society, well-educated and well-off. It doesn’t mean all women farmers in Brazil fall into this category, but that was my experience there.

But it can also vary within countries. If you take the island of Sumatra, there are two distinct regions from which we source speciality coffee: North Sumatra and Ace. Women dominate the supply chain in North Sumatra, but in Ace, men dominate the supply chain.

In Costa Rica, I came across two radically different lady coffee farmers. One was from an enlightened family background where, at the age of 14, her father taught her how to drive the family truck, prune trees, apply fertilizer and manage the entire farm. The second lady grower had been physically abused and nearly beaten to death by her parents and then her husband. They both told her that she was too stupid to drive a car or manage a coffee farm. The police eventually put the husband in prison, and the woman now successfully runs the farm with her daughter.

Abuse tends to stop when a woman starts bringing money home. In their book Half the Sky, the authors write about a woman in Burundi whose husband had abused her until she got micro-financing for a business. Once she did, her husband realized her economic value – her potential to bring money into the family – he stopped his abuse.

What is holding women back in the coffee world?

Women may grow the coffee, but they rarely own the land. Land ownership is a critical requirement for belonging to a cooperative. Everyone likes to think that cooperatives work to benefit everyone in the community, but they often exclude women growers because they can’t prove they own the land.

Not being a cooperative member means that women have less access to credit, agricultural inputs, training, and market information. They are denied leadership and are cut off from decision making. Also, not being a cooperative member often excludes women farmers from the training that many well-intentioned foreign NGOs might offer.

In many countries, women grow the coffee but men transport and sell it. Women not only have to grow coffee, but they also have to participate in the supply chain. When women are doing 70 per cent of the labour, you have to include then in the sale of their produce. They can, and must, contribute to making the coffee sector more viable, healthy, quality-orientated and profitable.

What more could we do to promote women in coffee producing countries?

As a coffee roaster and buyer, my personal choice is that quality comes first. If I am faced with two coffees of equal quality and one is produced by a woman and one by a man, I will choose the former. For example, I have recently started a line of Sumatran coffee made by a women’s cooperative. I had a choice of various equally good coffees from the region, and I chose the women-grown one. I will not discriminate against quality for gender equality.

If you are a coffee buyer and you have a choice between equally outstanding coffees produced by both men and women, I urge you to choose the one made by the latter. Encouraging more women growers will improve coffee quality and be beneficial for the families that produce it. Doing so will strengthen the integrity of the value chain and make it more economically, environmentally and socially sustainable.

I understand that you have recently been crowdfunding for your start-up and to promote women in coffee. Could you tell me a little more about that?

I am crowdfunding to finance a new roasting machine. I started with a small roaster, but my business is growing fast, and I need more capacity. Having a larger roaster will give me leverage to buy more women-produced coffee. I have three different women-produced coffees, but as I grow, I will source more.

Thank you, Shirin, for your time and input.

© Commodity Conversations ® 2021

Your Career in Commodities

In their excellent and must-read book, The World for Sale, Javier Blas and Jack Farchy have pulled together what the FT calls ‘rollicking yarns’ from the last fifty years of commodity trading. The authors have written the book like a spy thriller. James Bond (in the form of Vitol’s Ian Taylor) braves missile attacks to provide oil to fuel the Arab Spring. The evil genius Blofeld (in the form of Marc Rich) manipulates markets, breaks sanctions and trades with the enemy.

Ian Taylor and Marc Rich have sadly passed away, which makes me wonder to what extent the book reflects the current reality of commodity trading. When the world of trading is trying to increase diversity, what impact will the book have on a young person, particularly a young woman, thinking of a career in the business? Would it be like a young person joining the CIA or MI6 searching for heroic derring-do, only to discover that modern-day spying is more about computer-based data management?

The question, therefore, is: ‘If you read The World for Sale, would you be disappointed if you joined the world of commodities?’ My answer is: ‘It won’t be what you expect, but you won’t be disappointed.’

Commodity trading has always been about data – what we used to call ‘statistics’ or ‘supply and demand analysis’ – which commodity professionals use to predict future price behaviour. The weather is probably the most critical variable in agricultural commodities, but there are many others, politics and government intervention being high on the list.

Making sense of all this data –  bringing all the various elements together to form a compelling picture – is like doing a jigsaw puzzle on the deck of a yacht in a Force 8 gale. There will always be missing pieces, and you will have to make difficult decisions without full information.

You will spend a lot of time on that yacht if you join a financial institution as a ‘paper’ trader. Your work will be almost 100 per cent analysis, but you will quickly get used to being buffeted around by the gales that regularly sweep through the markets. Although I prefer physical commodity trading, you will have a challenging and rewarding career as a paper trader. You will also be adding value in terms of market liquidity and price discovery.

Physical commodity merchandising is about sustainable and efficient supply chain management. You can define it as ‘transforming commodities in space (geography), time (storage) and form (processing)’.

As you move your particular commodity along the supply chain, you will discover market inefficiencies and mispricing. These could, for example, make your corn worth more as ethanol than animal feed. You could find that it is cheaper to supply your Chinese wheat buyers from the US than Australia.

Most market inefficiencies occur when poor crops or government interference disrupt supply chains. The Trump trade wars with China meant that Brazilian soy suddenly increased in value compared to US soy. Russian export taxes on grain suddenly made other origins more competitive.

You may do all your analysis and discover that the market is not mispricing the various differentials but is mispricing the entire supply and demand for a commodity. When that happens, the flat (outright) price will move. This occurred during the super cycle of the 2000s when the world underestimated Chinese demand (for everything) while overestimating the world’s ability to supply it.

As you merchandise your physical commodity, you might, if you are lucky, earn a tiny margin at each stage of the supply chain. However, you will be more likely to make your living as a commodity trader by taking advantage of small market inefficiencies – mispricing – all along the supply chain. By doing so, you will not only make a profit; you will also make the market more efficient, ensuring that it sends the correct price signals to market participants. This is especially true for the flat price. Futures markets reflect the future: prices move in advance of a shortage or surplus, solving the problem before it happens.

As well as making your supply chain efficient, you will also have to make it economically, environmentally and socially sustainable. Your customers will demand nothing less, even if, unfortunately, they won’t pay you extra for it. Sustainability is now a ‘given’. In achieving this, you will find yourself working alongside – rather than in conflict with – NGOs, certification agencies and other not-for-profit foundations.

As I discovered when I wrote my book about coffee, you may also find that you are using your supply chain in reverse, helping NGOs to implement and effect change at the origin.

As well as managing the traceability of your supply chain, you will also have to manage the risks in it. You can hedge some of your price risks on the derivative markets, but most differentials are impossible to hedge. The skills you learn will enable you to trade those differentials successfully.

You will also have to manage counterparty risk – a client defaulting on you – and country risk – a government changing the rules on you. You may also have to deal with fraud, drug traffickers and other possible criminal activity.

A senior official from Olam recently told me that the health and safety of employees is the number one risk that his company faces – and that cybersecurity is number two.  You will have to deal with both.

You won’t be able to merchandise commodities if you don’t have suppliers and customers. The people you will deal with will probably be from different countries; you will have to become accustomed to dealing with people from other races, cultures and creeds. Many of these people will become your friends.

Meeting and interacting with clients was always the most enriching part of my life as a commodity trader. One week I could be wandering in the cane fields in Brazil, Thailand or India. The next, I could be walking the streets of Manhattan visiting hedge fund managers.

You will also have to work in a team. The movies depict James Bond as a lone wolf who saves the world single-handedly, but he would not work alone in real life. The best teams are diversified, with people of different skillsets, of different genders, and from other races and backgrounds. Commodity trading is a global business, and you will soon lose any prejudices that you may still be carrying around with you.

Finally, if you want an idea of what to expect from a career in commodity trading, you couldn’t do better than to watch this video interview of Dave Berhends, one of the world’s top coffee traders.

In their review of the World for Sale, The Times writes that commodity traders are the true Masters of the Universe. Fortunately, that is not true, but our business is still a great one to be involved in – especially if you are a woman.

Image by Peggy und Marco Lachmann-Anke from Pixabay

© Commodity Conversations ® 2021

A woman in coffee


To celebrate International Women’s Day, we post a blog that Shirin Moayyad, the founder of Sweet Bean Coffee, wrote in 2019 when she was first setting up her business. Next week, I will talk more with her about women in coffee. The following week, I will look at what we can all do to encourage more women into the world of commodity trading. Here is Shirin’s story:

I have now worked for nearly 30 years in coffee. I am at long last the founder and owner of my own coffee business. I have been in charge of a coffee farm in the remote Highlands of Papua New Guinea, where I also managed a roasting and exporting company. I travelled the world buying coffees for Peet’s. I guided National Geographic’s film crew through the coffee fields of Ethiopia and Colombia. I’ve had a long and varied coffee career, taking advantage of every opportunity to expand my knowledge, further my skills and experience as much as possible. And yet, it still comes as a surprise when I face gender discrimination.

Last week my partner and I dismantled a 33-year-old kitchen we’d purchased online to refurbish for my new roastery’s cupping lab. Armed with crowbars, hatchet, saws and a mountain of tools, we set to. Mid-morning, the homeowner invited us in for a coffee break and began asking about our plans: why we needed this kitchen, what we planned to do with it etc. Eyes widening with interest, he asked a whole series of questions. Where they concerned construction and refurbishment, my partner answered. Where it had to do with coffee, Didier directed the gentleman to me, saying, “Shirin is the coffee in this equation; she’s the one to answer that.” Kindly though he was, the gentleman only looked at me briefly, then immediately turned back to Didier, as if in subconscious denial that I, a woman, could be the business owner, the authority, or the one who knew the answers on coffee.

Don’t get me wrong. I am in awe of my partner’s abilities. I think it’s nothing short of miraculous, all the things he is capable of doing. I don’t know how to sand and spackle a wall. I don’t know how to wield a crowbar or saw through a granite counter. My mother did. But I don’t. She grew up in privation in WWII, Germany. Where you had to know how to do everything. My dad was the poet, the dreamer, the aesthetic; my mum was the doer, the powerhouse who made it all happen. She got shit done. She is, I realise, the person who most influenced who I am today.

Still, coming back to kitchen dismantling day. I found myself astounded by the gentleman’s assumption that it had to be Didier who knew coffee; he was the authority simply because he is a man. Maybe once upon a time in my career, this wouldn’t have struck me so much. But now, some 30 years on, it comes down as being just ludicrous.

It was 20 years ago in Singapore when I first found myself frustrated by the blatant discrimination of these assumptions. I was head of coffee, roaster and buyer for a 28-shop chain when I hired a mate of mine from Australia to come roast. He was a lovely bloke; a tall, amiable guy, very competent and a big help to me. But he was my employee, my hire, my direct report. And I lived the same frustration there, of facing implicit assumptions that he was boss, and I was just some little sidekick, an assistant perhaps. Inevitably, his authority was sought, his opinions solicited, the assumption made that he was The Man. It wasn’t his fault, mind, it just was that way. And I was young enough not to be too irritated. But now, some 30 years on….

There was that origin trip once when we were a group of coffee professionals on a bus, headed out to a farm visit. A chap sat next to me and proceeded to soliloquise on his extensive coffee experience, all the marvellous things he’d achieved at origin. I wasn’t sure when he found time to breathe, he was so enthralled with recounting his own achievements. I forgot what topic it was that prompted me to interject mildly how yes, I had also found XYZ issue on the 98-acre coffee farm that I managed in the remote mountains of Papua New Guinea. There was a moment of silence when my words broke through the waterfall of his monologue, and his face went blank. Dumbstruck. Silent. I watched the virtual cogwheels turning as he struggled to compute the information he had just heard. In the event, it was clearly too much for him to compute since, after that brief respite, he went right back to blathering on about his record of achievements. Sigh. It wasn’t yet 30 years then, but it was starting to irritate me.

My mum isn’t the only one to have inspired me over the years. There are others: women in coffee the world over who have been there in one form or another as I learned this path.

Erna Knutsen was one such wonder. I was travelling to California on a trade mission to represent Papua New Guinea – because, by then, I was managing a coffee roasting company there that had achieved considerable export success. My colleagues at home told me to contact Erna as she was the US importer of our finest estate coffee and would look after me. And indeed, she did. Erna invited me to her cupping table whilst evaluating a quality claim on a pricey auction lot Kenyan. Erna was the woman who coined the phrase speciality coffee, the grande dame of our industry who broke the glass ceiling and brazened her way to a place at the cupping table. She was awesome. And here, without knowing anything about me, she allowed me to cup alongside her. I trembled at the honour.

Later that afternoon, I experienced the true flamboyance of this trailblazing woman. She’d booked us a table at San Francisco’s Boulevard Restaurant…a place so fancy to my Papua New Guinean bush eyes, I couldn’t help but be impressed. And there she was, sporting a leopard skin pantsuit, through her cat-eye spectacles calling the handsome young server “darling” and drinking some mighty strong cocktails over lunch. Her self-confidence allowed her a flamboyance I could only dream of.

Today’s earthly embodiment of the virtue of grace though would have to be the inimitable Sunalini Menon, an extraordinary woman I consider to be both a mentor and one of the world’s greatest coffee cuppers. I first witnessed her quiet self-assurance and profound knowledge of coffee at work in Singapore when I moved there from Papua New Guinea. Two gentlemen were trying to sell me coffee from Yunnan, China, which was coming on as an origin. “As good as a Costa Rican hard bean,” they blustered loudly. Sunalini happened to be cupping with and coaching me that afternoon, but they clearly didn’t know her and assumed she was just another woman who could be hoodwinked and bullied.

As we started to cup their samples, Sunalini gently probed them with questions on the varieties they had planted. Was it a first or second-generation cross as the Catimor cup was clearly coming through? Perhaps the parenting might have been from XYZ stock as that taste was in the finish, didn’t they think? And where had the progenitor plant material come from as it tasted rather more along the lines of IMN than XYZ, didn’t they think?

With every softly spoken question, her deference combined with her indisputable empirical knowledge of what she was cupping put the gentlemen further on the back foot. I watched their posture literally move from forward-leaning, imposing, nearly bullying to quiet, defensive, and ultimately defeated. The lids came down over their eyes, their body language shut down, they were silenced. It was a prize-winning performance, the likes of which I have not since seen. Never once did Sunalini raise her voice or humiliate. Instead, with soft-spoken words underpinned by the undisputed certainty of her palate and her knowledge, she whipped them. Always immaculately clad in the bright and decorative costumes of her native India, Sunalini’s personal and professional elegance is an inspiring beacon to other women in coffee.

Let me end by drawing a parallel that might help the reader hear my point of view. I have a dear friend, Phyllis, an African American coffee professional. Some years ago, I reflected on the fact that while I could sympathise with her fight and certainly try to empathise with the discrimination an African American experiences, still I could never fully feel it. Why? Quite simply, because I’ve never lived it myself, I haven’t walked in those shoes. It hasn’t been my experience in life, and as much as I sympathise, I cannot live that experience the way Phyllis has.

By the same token, although I’m certain that while my many male colleagues and friends in coffee all sympathise, they cannot know in full what I feel because they’ve never lived it. They’ve never experienced this through this lens. Through the lens whereby, after some 30 years in the industry, a man would still turn his back on a woman and direct his questions at a fellow man with arguably nil experience in coffee.

If I look at the cumulative lessons I’ve learned from the women I admire, what it boils down to is this:

  1. Know and love your subject matter because nobody can question that kind of integrity, and you will live with its certitude.
  2. Believe in yourself and don’t listen to the noise of others. You know your worth; the monkey chatter of others should wash over you and not stick.
  3. Don’t be afraid to have your style. From Erna to Sunalini and every other icon in the world of women in coffee, with the knowledge they have, style is an adornment, a cloak that embellishes their individuality and worth.

Note: these reflections are simply that and no more. And I dedicate them equally to the man I love, as to all my many coffee sisters. And most particularly to my mum, the woman who could do everything.

I also want to thank all my male colleagues for the huge support they give to women in coffee. The world is indeed changing, and there are several men out there – you know who you are – who I look up to every bit as much as I do to the likes of Erna or Sunalini.

Corruption in Commodity Trading


I haven’t yet received my pre-ordered copy of The World for Sale by Javier Blass and Jack Farchy, but it has already spurred some headlines about corruption in the world of commodity trading. The story that attracted the most attention concerns a former Glencore mining executive who admitted to the book’s authors that in 2003 he flew around the world with bags of cash to be paid in bribes to government officials.

The authors rightly point out that, although unethical and immoral, it was both legal and even tax-deductible in 2003 for Swiss companies like Glencore to pay ‘commissions’. The Swiss government has thankfully rectified that sad state of affairs, and Glencore has banned using local agents, the intermediaries they used to facilitate corruption.

Glencore started life as Marc Rich & Co, led by a brilliant but flawed trader who specialised in dealing in countries where most people feared to tread. Daniel Ammann has written a (truly) excellent biography of Marc Rich – The King of Oil – in which he tackles the issue of corruption. He writes

“Most commodities come from countries that are not beacons of democracy and human rights. The “resource curse” and “the paradox of plenty” are the terms economists and political scientists use to describe the fact that countries that are rich in oil, gas or metals are usually plagued by poverty, corruption, and misgovernment. If commodity traders want to be successful, they are forced—much like journalists or intelligence agents who will take their information from any source—to sit down with people that they would rather not have as friends, and they apparently have to resort to practices that are either frowned upon or downright illegal in other parts of the world.”

Mr Ammann is right: corruption has more to do with governments than commodity trading. The onus is on governments to cure the disease.

Way back in 1977, the US instituted the Foreign Corrupt Practices Act (FCPA). It made it unlawful for a U.S. person or company to offer, pay, or promise to pay money or anything of value to any foreign official for the purpose of obtaining or retaining business.

More recently, China, previously one of the world’s most corrupt countries, has resorted to drastic action, instituting capital punishment for corrupt officials.  Other countries are taking less drastic measures, but they are moving, albeit too slowly, in the right direction.

Corruption in commodities typically thrives when governments get involved in, for example, awarding mineral rights, production or trade quotas or by setting prices.

It was omnipresent in the agricultural markets when I began my career in commodities. At that time, only the government had the right to import or export certain commodities in many countries. Buying and selling tenders were often rigged – and you were never sure how much money was being siphoned off or added on before it reached the farmers or the consumers.

Over the past 40 years, governments have exited the agricultural commodity trade; the business has been privatised. When business is in private hands, producers or buyers have little interested in receiving bribes; it is the price and the terms of the deal that interest them.

But what should you do if a government official asks for a bribe? In my book, The Sugar Casino, I told the true story of the first time someone asked me for one:

“After spending two years as a futures trader in Minneapolis, my company transferred me back to London with a brief to develop new markets in the Middle East and Africa. The company’s agent in one country (I won’t say which one) contacted me to say that they had surplus sugar that year and the government would like to export a couple of cargoes to earn much needed foreign exchange. The minister who was handling the sale was coming to London the following week. Could I meet him?

 “Despite being only 25 years old, I met the minister and took him to an expensive restaurant. We had an excellent meal, discussed the sugar market and tried to estimate the price for the particular grade of sugar the country was exporting. As we were leaving, he surprised me by suggesting that we dine again the following evening. I agreed even though I was unsure what we had left to talk about.

 “The next evening, the minister slipped me a shopping list of electronic items that he would like to take back with him from London. There were only four items on the list: a television, a radio, a stereo system and (bizarrely) an electric iron. He asked if I could help him obtain these items. I wasn’t quite sure if he asked me to go with him to the shops to choose the items or ask me to buy the items and give them to him for free. And if it was the latter, I was surprised at how little it took to bribe a minister.

 “The next day, I told my boss what had happened. I thought it was a bit of a joke. Still, my boss took it seriously, advising me to go back to the minister to politely explain that company policy meant that we couldn’t help with his request but that we would still like to buy his sugar and be very competitive on the price. I did as instructed and was not surprised to hear a week later that one of our competitors had bought the two cargos of sugar. I calculated they had probably made a profit of $240,000 on the deal. I compared that to the couple of hundred dollars it would have cost to buy the items on the minister’s shopping list.

 “I mentioned this to my boss, who told me angrily that I should never think about paying a bribe to anyone, no matter how much money was at stake. He called it “selling your soul to the devil” and argued that even if a television may not cost much, it was “the thin edge of the wedge. And from a business point of view”, he added, “It makes no sense.

 “First, it will give your client a hold over you. Second, if everyone does the same thing, you will end up competing against each other in the number of bribes that you pay.” He called it “competitive corruption” and said that paying a bribe would be ineffective if your competitor paid more.

In 2016, I interviewed the legendary sugar trader Robert Kuok for The Sugar Casino. He told me:

“One piece of advice: never hug the high and mighty; they electrocute you. Keep them at arm’s length. And always adhere to moral practices, and nothing can stop you. If someone asks you for a bribe, you should say that neither you nor your company could do that. But stay very polite. Don’t stand on your high horse and preach morality at that moment. Just turn them down nicely. If you get a chance later at a meal or something, you can pontificate a little, but not then – they are not in the mood to be listening to moral truth.

Sound advice, indeed.

© Commodity Conversations ® 2021