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Three Strategies for Success

By Patrícia Luís-Manso – Head of Sugar and Biofuels Analytics at S&P Global Platts

Women are underrepresented in the commodity trading business, in particular in sugar trading. Amongst the top trading houses that control 85 percent of the total sugar traded in the world, less than 10 percent of physical traders are women; and none of them holds a senior trading leadership position. This has led to me to ask whether differences in the way women and men develop and use their career networks could explain this underrepresentation.

Networks are essential to career development because they give access to information and knowledge, as well as to decision makers, influence, endorsement and reputation, emotional support and recognition.

Both male and female traders that I interviewed acknowledge that developing and nurturing career networks matter, and both invest in significant effort in doing so. Based on the interviews, I identified the structure of male and female traders’ networks and their networking behaviours.  I concluded that career networks of men and women sugar traders are similar in terms of size and diversity. Moreover, female sugar traders tend to engage in networking behaviours to a similar extent (frequency) compared to their male colleagues.

However, they differ in other aspects—ways that may be deterring women from accessing and ascending in this profession. Key differences refer to the proportion of high-status individuals and to the proportion of strong ties. Women sugar traders’ networks tend to have less high-status individuals than men’s and to have a lower proportion of strong ties.

Moreover, even though female sugar traders engage to a similar extent as their male colleagues in professional activities (conferences and seminars, for example), and in community projects, other differences came to surface. First and foremost, female sugar traders engage in activities that increase internal visibility less often than their male colleagues. This could be going to lunch with their supervisor, or being on highly visible committees at work. Instead, women tend to engage more often than their male colleagues in maintaining contacts and socializing activities. 

Based on these findings, how can women close the wide gap in the trading profession? I recommend three strategies.

STRATEGY ONE: Nurture strong ties to strategic partners. 

Female sugar traders’ networks have a smaller proportion of very strong ties compared to a male network. In today’s highly connected world, weak ties may be less relevant for career advancement.

The intensity of the relationship with other individuals in the network does matter enormously as a source of social capital. For career advancement, resources like endorsements, validations and sponsorships that come from emotionally strong ties may prove more effective for female career advancement than access to novel information from weaker ties.

STRATEGY TWO: Participate more in high-visibility activities.

Other studies have highlighted the fact that women need high visibility to build legitimacy. Excellent performance and solid human capital are necessary, yet not sufficient, conditions for women to advance to managerial and leadership positions.

STRATEGY THREE: Be more selective in terms of networking: quality over quantity.

Time is limited and women already engage in several networking behaviours. The key is to become more selective, and to think more about impact. This means that every time you participate in a network you should be prepare in advance to maximise impact.

Note: These findings are based on my final project presented as part of the Diploma in Organizational Leadership from the Saïd Business School at the University of Oxford (October 2018) The title of the assignment was Social capital and career development: is there a gender gap? Evidence from the Sugar Trading industry.

As part of our efforts to encourage more women to join the commodity business we will be running a series of interviews with successful women already in the sector. We caught up with Kona Haque in Dubai.

Kona joined ED&F Man in May 2014 as Group Head of Research, responsible for the company’s commodity and macroeconomic research team (including Volcafe coffee). She previously worked at Macquarie Bank where she was responsible for agriculture and soft commodities research for seven years. Kona spent four years as Senior Commodities Editor / Economist at the Economist Group. She has also worked for a shipping consultancy as Director of Bulk Commodities and spent four years at Metal Bulletin Research, specializing in base metals. Other experience includes working as an economist for a grains market information provider and with the United Nations in Rome, Italy. Kona has an MSc in Economics from the London School of Economics and a BSc in Agricultural Economics from Reading University.

Good morning Kona, thank you for joining the conversation. First, I would like to ask you why do you think there are so few women in commodities?

Commodities as a sector generally seems to do a bad job in attracting women. This could be due to perception – commodities are essentially “raw materials” for processing, which may be seen as a place for engineers or heavy-lifting personnel, which tends to be male-oriented. But within the commodities space, I would say that metals and energy are even more skewed towards men compared to the agricultural or softs sector. The latter has a softer image, and in my biased opinion, I think is better able to attract females. But there are areas within commodities that are very well represented by women – such as Finance, HR, operations and Research. At any rate, times are changing and I’ve never seen the commodities sector so keen to employ women as I have now. It is only a matter of time before the balance improves here too.

Do you think being a woman has held back your career?

Not at all. I joined the sector over 20 years ago when investment banks were just beginning to build their commodities desk in anticipation of the bullish trend following the rise of Chinese demand for energy, metals and food. At that point, the search was on for anyone with a good background in commodities – which I had. Since then I have always tried to be the best version of me, as a commodities employee, that I could possibly be, which in turn gave me recognition and allowed me to compete with other men on a level playing field. So even though I would typically miss out on male oriented after-work drink ups, golfing networks or what have you, I strived to build value by outperforming my peers during work hours, for example.

Is travel a factor: women may be less safe than men going out to get business, particularly in developing countries?

Developing countries are not inherently unsafe, local knowledge is important and we have many female colleagues in our origin locations. A good company will never force you to travel to dangerous locations and staff are counselled to take precautions when traveling on business. Inevitably, when women get married and have families, travelling far and often becomes less easy. This is something that is not unique to commodities though – it’s across businesses. To solve this, the goverment and companies alike will have to come up with solutions that enables mothers to travel more often knowing that they have reliable alternative home arrangements during their absence.

Women tend to work better in networks rather than in confrontation. Do you think the way that the commodity trade is evolving will result in more women being involved.

Commodity trading doesn’t always have to be confrontational! And some women are quite good at it any way – it all depends on individual personalities. I’ve yet to come across a role in Commodities that is truly gender specific, I think women can be as good as men (if not better) in many of the roles that are traditionally male oriented. The challenge is to get women to apply for those roles. At ED&F Man, we’ve been actively trying to boost women applications at all levels. We train hiring managers on unconscious bias and we promote the idea of commodities as a career to  both our own employees and to young people who we mentor (e.g. through our relationship with Future Frontiers). We have a Women’s Network which was set up to encourage women to aim high at ED&F Man and in our wider industry. Commodity companies need to be more active in recruiting at an early stage. Some universities, for instance, offer very good courses in Commodities (e.g. Geneva, City or Cass BS) – which have opened up the field for women as well as providing a very strong talent pool.

What advice would you give to a woman looking to enter commodities?

I would say go for it! I have enjoyed every minute of my career in commodities, and have no desire to switch to another industry. Commodities are real, tangible and international. It’s influenced by changing politics, weather and economic trends so there’s never a dull moment. None of this is gender specific, and as long as you are good at what you do, women from all countries and backgrounds should join the sector. Women should look for a company willing to invest in people and ideally find a mentor / sponsor. It’s important to be open minded and confident in your abilities (and definitely not a shrinking violet), as there is a lot of scope to move around the industry and flourish. Teams that have a good gender balance are known to be high performing, so if the Commodities industry can boost the intake of women, can you imagine how far it can go?

Thank you Kona!

PS: We are keen to interview successful women in commodities. If you would like to make your voice heard on the subject please contact us.

The campaign against sugar has picked up pace since the start of this year and shows no sign of slowing. The Sunday Times dedicated the cover of their weekly magazine to sugar, while the Arte television channel in Europe rebroadcast the 2016 Canadian documentary “Sugar: the sweet lie”. Meanwhile Netflix is working on a programme to be broadcast later this year on corruption in the Florida cane sector.

The sugar sector continues to be taken aback by the success of the anti-sugar lobbyists. Sugar professionals have long known that per capita sugar consumption in developed countries has been falling since the 1960s, and they find it both unfair and illogical that sugar be blamed for the surge in obesity that began in the 1970s.

After all, according to the “Sweet lies” documentary (above), world sugar consumption increased 40 percent the 30 years up to 2016. However, in the same period, world population increased by 50 percent, from 5 billion in 1986 to 7.5 billion in 2016. As such, per capita consumption fell during the period.

What many in the sugar business had expected to be a short-term fad has accelerated the long-term down trend in consumption. Sugar has been demonised, and the fall in per capita consumption has reached the point where, in the UK at least, total consumption is now falling. This is the new reality facing sugar producers.

But as always, change, no matter how negative, always throws up new opportunities. It is the way that companies react to change that defines them. Negative can be transformed into positive.

Here are five ways in which some producers are already responding to change (and others should.)

1: Never give up

Companies must continue their work in trying to correct the widely held belief that sugar consumption is the cause of the global obesity epidemic. There are some signs that that tide may be turning, as in this recent BBC podcast, but for the moment the sugar sector is still swimming against the tide. No matter how tiring it may be, it needs to keep swimming! 

2: Consolidate, but responsibly

The sugar sector has responded to falling profits by cutting costs. Economies of scale are significant in sugar:  producers have tended to build large mills or refineries and maximise output to reduce unit costs. There is a tendency for cost cutting to result in increased supply—and increased supply usually results in lower prices that negate the costs saved.

When demand is stagnant the only way around this is close the smaller, less efficient mills and concentrate production in the bigger ones. This is already happening in Europe, but the social cost of mill closures can be high. Unfortunately, the social cost of a milling group going bankrupt can be even more horrendous.

3: Innovate, and innovate again

The sugar industry has a history of innovation, but to be more effective, innovation should be in the form of new products and processes, rather than simple cost cutting. Blockchain can reduce costs, but (see above) if it lowers costs across the whole sector it may just result in lower prices for the consumer. That’s a good thing, but a better thing would be a new product that the consumer may be willing to pay more for. That could be a sugar-stevia mix, or anything that comes under the SOFT (Sustainable, Organic, Fair Trade) category. There are opportunities here to turn a commodity into an ingredient.

4: Add even more value via by-products

Sugar cane and beet are wonder crops with multiple by-products. Ethanol can be used to drive cars or make bio-plastics (and fertilizer from the vinase). Bagasse can be burned for electricity generation or used as building material. Beet pulp can be fed to animals, or be used as an environmentally friendly alternative to salt on winter roads. There is a huge opportunity for the sector to add even more value to their by-products

5: Diversify across supply chains

As the Executive Director of the ISO recently pointed out, some of the most successful companies in the sugar sector currently are the most diversified, whether into pizzas or fruit concentrates. It can be tricky for a company to shift focus from its core competence, but it can be worth the effort. Trade houses are already moving that way, turning themselves into food companies, and sugar companies are slowly following.

So, in conclusion, the world is changing and the sugar sector is changing with it. Of course it could do more–and will do more–but the first steps are promising.

© Commodity Conversations ®

At the end of every year since 2006, Rabobank asks their contacts in the food supply chain (“ranging from start-up founders to CEOs of zillion-dollar companies, and everyone in between”) the following question: “In the world of food, what surprised you the most over the last twelve months?” This year they received over 200 responses, some surprising, some less so.

Overall, respondents were “surprised” by the way the food supply chain is managing to respond quickly to constant changes in consumers’ demands. As one client wrote: “From delivering new products, changing business models, adjusting to consumer shifts, investing in innovation in various forms, and facing tough realities, the world of food is markedly different.” Heads are no longer being buried in the sand, as “it seems that everyone suddenly woke up.”

However there was still some criticism of “”Big Food,” with one respondent writing that he was surprised that “that big-food-brands companies are still struggling to grow despite most of them revising strategies and replacing CEOs.” Another was surprised that “the troubles faced by the Big CPGs, with brands my mom and grandparents used to buy, seemed to get worse over the past year despite so much renovation and reconfiguration of operations and marketing approaches.”

Some respondents talked about the way Big Food is trying to achieve top-line growth “via overpriced acquisitions that are shareholder wealth destructive”. Another remarked “companies continue to chase the unicorns by overpaying because they have few ideas of their own and get desperate.”

Many respondents expressed surprise at the rapidity with which consumers are embracing plant-based foods and/or a “flexitarian” diet. One client replied that he was surprised by “the acceleration of plant-based foods – and the growing acceptance of the products by non-vegan, non-vegetarian consumers regardless if their motivation is for health, animal welfare, or environment.”

Respondents were almost unanimous in their view that this is an enduring trend rather than a “fad”, but many stressed that the diet was not for everyone. One wrote, “Despite all the money flowing into replacement meat products, I don’t see the evidence of consumer desires for these products.” Another mentioned the “mismatch between what the media is writing about and reality.”

One “surprise” that was cited was the different ways in which consumers respond to technology in their food supply. Some clients detected a thawing in relations between food and science: although “consumers have been rejecting science more and more over the past decade” (such as the non-GMO movement), there is growing appreciation of the role of technology in many aspects of food and agricultural production”.

However, one respondent wrote he was frustrated by “the rising tendency for people to selectively believe science only when it aligns with their beliefs.” Others were surprised by the lack of pushback by food companies against the anti-science bias in food. One criticised “the willingness of some food companies to ignore science and chase consumer fads.” Examples included the proliferation of free-from claims on “products that never have, nor will have, certain ingredients.”

Some respondents expressed surprise “by how quickly capital and ideas are flowing to the nascent and undefined world of CBD, (cannabidiol – a non-intoxicating cannabinoid found in cannabis and hemp) both in food and beverages.” One expressed surprise that food companies and retailers are “embracing CBD given regulatory uncertainty, not to mention uncertainty around its effectiveness, proper dosage, etc.”

However, with the passing of the latest Farm Bill taking industrial hemp off the list of Schedule 1 narcotics (as defined by the Controlled Substance Act), one respondent wrote, “I almost see this as a space that can be as deep and wide as alcoholic beverages, and large strategics are having to act quickly to determine whether or not they want to take the risk of playing in this space (or not).”

Among other surprises cited in the survey was “the velocity and breadth at which #MeToo rippled through the restaurant industry, resulting in rapid response and swift changes.” Regarding the environment, one client wrote, “This year we did not see coming the food industry disruption associated with use of plastic straws.” And for trade, one mentioned “The rapidity with which the trade war with China escalated, the resultant tariffs, and their impacts on fruit and nut producers in the U.S.”

Finally, the last word is left to the respondent who wrote that he was “surprised by the ferocity of the arguments about whether low-fat or low-carbohydrate diets are better for weight status. Really, both work, provided people adhere to them, and calories really do matter.”