As Pedro Nonay explained on a panel during the recent Commodities Show in Geneva, there has been a quiet revolution in grain trading over the past decade: the world of neat, global flows dominated by a few multinationals is giving way to a more fragmented landscape where regional champions and state-backed firms control an increasing share of the trade.
From ABCD To ABCCD++
For most of the modern era, global grain flows were dominated by a small number of international firms that combined origination, logistics, risk management, and relationships under a single global umbrella. That model has not vanished, but it has been weakened by specialised regional players who understand their local basins better than anyone else.
This shift is not accidental; it reflects politics, sanctions, food security concerns, and a broader rewiring of globalisation into a more bipolar transactional system. Grain trading, as it often does, is simply expressing in physical flows what is already true in geopolitics.
Wheat As The Front Line
Wheat is where this fragmentation is most visible. Russia now accounts for close to 30 per cent of world wheat exports, yet international players are largely excluded from that flow, with state-linked or domestic houses acting as the key conduits.
The result is a two-tier market: on one side, global traders who still dominate in many origins and destinations; on the other, a growing cadre of regional champions that manage specific corridors and price relationships. The more politics intrude, the more those regional specialists gain relative power vs the old global model.
Three Tiers Of Players
The emerging business structure can be organised into three tiers: global, state, and regional. The large multinationals are consolidating, becoming fewer and bigger, seeking scale in capital, risk, data and logistics to defend their global relevance.
Alongside them sit state players, whose mandates blend economics, politics, and food security: Demetra/Solaris in Russia, COFCO in China, Olam in its Gulf-linked incarnation, and sovereign-backed stakes in traditional houses such as ADQ’s investment in Louis Dreyfus.
Then there are companies with a strong local presence that have been expanding their CIF trading, including Cefetra in Europe, Invictus and AlGhurair in the Middle East and Africa, and Enerfo in Asia.
We should also mention that there are long-established local companies with crushing operations at origins such as Argentina and Brazil, and destinations such as China or Algeria.
Then there is the third bloc: regional champions that connect local producers and consumers to this more polarised global system, often with sharper local knowledge and greater political agility.
Why Regional Champions Are Winning Share
Several forces are steering volume towards regional specialists. First, the world is transitioning from an era of multilateralism and rules-based trade to what Pedro terms a “bi-decade” that is bipolar, biglobal, bilateral, and binary, where being aligned—or at least acceptable—to a specific camp is as important as price.
Secondly, the grain trade is becoming more ‘weaponised”, with export embargoes, sanctions, and government-to-government deals changing who can ship to whom and under what conditions. In this environment, agile, locally trusted operators often hold an advantage over global corporations that are more constrained by regulation, reputation, and financing arrangements.
Logistics Revolution And The Local Edge
At the same time, logistics are undergoing their own revolution, propelled by climate-related changes such as a potentially more navigable Arctic, as well as shifting investments in ports, railways, and storage facilities along new trade routes. Regional leaders are often best placed near these assets to capitalise on emerging bottlenecks or arbitrage opportunities as routes evolve.
Their competitive advantage is rarely just freight; it is culture, relationships, and the ability to operate with respect for local norms rather than with an imperial mindset. In a world where money no longer buys everything, value systems and mutual trust can be as decisive as balance sheet strength.
Competition, Ethics And Behaviour
Fragmentation has not only altered who trades but also how they behave. The more the system divides into blocs and corridors, the more inconsistent standards become regarding transparency, ESG, and even fundamental business ethics.
This creates a competitive environment where some actors must adhere to strict public-market and Western compliance standards. In contrast, others operate under more flexible or alternative rules, supported by state interests or oligarchic capital. For regional champions, the challenge and opportunity lie in manoeuvring between these worlds without compromising long-term credibility.
From Free Trade To G2G
The core question here is whether the grain trade is returning to a government-dominated model similar to the 1970s. The comparison is fitting, but the outcomes differ: today’s world is highly interconnected, data-driven, and technologically mediated, so state power now appears more through partnerships, stakes, regulations, and informal pressure rather than solely via centralised state boards.
The debate is increasingly focused on “free trade versus government-to-government trade,” and regional champions often sit in the middle, acting as executors or partners in deals where states set the framework and private companies handle the risk and logistics.
How The Majors Need To Adapt
For global companies, competing in this environment requires more humility and collaboration. The era of imposing universal templates on every region has ended; respect and regionalisation now become strategic necessities rather than mere marketing catchphrases.
Future winners among the majors will probably be those who can work together with state entities and regional champions, align values where possible, and accept that control is less important than access. In a fragmented world, connectivity—being the trusted link between very different systems—may be the ultimate defence.
Hedge Funds and Energy Companies Eye Physical Trading
Alongside regional and national players, hedge funds using advanced analytics are broadening their focus from proprietary agricultural trading to physical markets, as demonstrated by Hartree’s acquisition of ED&F Man and Viterra’s cotton team. Energy trading giants like Vitol are also exploring physical trading but often remain focused on proprietary activities. The merging of data, digital tools, and real-time analytics is speeding up these developments, giving new entrants an advantage. These firms are actively recruiting talent from traditional agricultural traders and will continue to do so.
What It Means For The Next Generation
For young people entering grain trading, the rise of regional champions and state players may appear to create a more crowded landscape, but it also provides many more entry points. Careers are no longer confined to a few global desks; they can begin in specialised regional firms, logistics companies, state-linked businesses, or even data and AI providers integrated into this ecosystem.
The common denominator remains the same: curiosity, analytical rigour, common sense, and the ability to raise the periscope and view markets from multiple angles rather than from a single silo. In a world of asymmetry—in demography, competitiveness, energy, and power—those who understand how regional realities connect to global flows will be the true champions of the next grain-trading era.
PS, I interviewed Pedro this time last year for my book Commodity Conversations – An Introduction to Trading Agricultural Commodities. You can read an extract of the interview here.
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