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The programme for the FT Commodities Summit in Lausanne this year included a breakfast panel on Women in Commodities. Just holding the panel proved rather controversial; some conference attendees argued that the FT should have made more of an effort to include women on all the panels, and not have a separate one for them.

The summit organizers told me that they had tried hard to do just that, but were sadly unable to find industry leaders who were female. Instead, panel after panel at the conference consisted of old white men in blue suits, white shirts and the, apparently obligatory, Hermes tie. (I mean no disrespect; I am white and just as old, and was for the occasion dressed in exactly the same way!) The failure to find more women wasn’t the FT’s fault; it is just that the top echelons of the industry are currently almost 100 percent male.

Another criticism that I heard voiced at the event was that the women’s panel was 100 percent female. Indeed one of the panel participants told me afterwards that she had been surprised that, when she had looked out over the audience, she had seen that it was almost entirely male. She said that it had taken her a while to realize that that was because many of the women at the event were at that moment on the stage!

She also expressed her disappointment that the panel was entirely female. “It is no good just us women talking together,” she told me afterwards. “What we need is for a change of attitude among the men in the industry…for men to realize their unconscious biases, and accept the contribution that women can make to the sector.”

The panel, sponsored by the metals-trading Gerald Group, got off to an awkward start. In opening remarks, the company’s (female) COO and Board Member made a brave effort to convince the audience that Gerard actively sought out and promoted women. No sooner had she sat down than the FT journalist reminded her that Gerard had been criticised last year for holding their annual Metals Week party at the Playboy Club, complete with Playmates in low-cut, black satin leotards and fluffy tails. All the COO could do to justify that decision was to tell the journalist that it hadn’t bothered her and, in any case, it was “a convenient location.”

This type of thing highlights the sector’s (sometimes justified) sexist and macho image. Quite simply, there are few women currently in commodities because few women wanted to be in commodities. The sector’s image often puts women off from wanting to join in the first place. Much therefore needs to be done first to improve behaviour, and then second, to get the message across that commodity trading is no longer the macho sexist world that it once was. I hope this website is doing just a little bit to help in that cause.

There was some debate on the panel as to whether companies should positively discriminate in favour of women; some thought they should, others not. There are good arguments on both sides, but surely it is in the interest of every company to have more women on board. As every recruiter knows, hiring the right person is not just, or even necessarily, a question of academic qualifications and experience. When you recruit someone you are looking for the best person to fit in with, or lead, a team. And if your team is predominately male, then the best person may well be female.

There was also some discussion over eliminating unconscious bias among recruiters. A panellist from the mining sector explained how her company trains managers to be aware of their unconscious biases regarding gender, race and religion.

However, one panellist made the moot point that unconscious biases exist not just in our sector, but also across the board. She gave the example of journalists who always ask senior female executives about their children, and how they manage their work life balance. They never pose that question to a senior male executive. (Funnily enough, I had asked Chris Mahoney from Glencore that very question the previous day! I will be posting his interview next week!)

The panellist from the mining sector did make another key point: the mining industry is changing. She highlighted that one of her company’s mines in South Australia is now managed from Perth, making it easier to attract women. In any case, she added, the mining sector is replacing muscles with machines, making it easier for women to be competitive within the sector.

But it is not just mining that is changing. Trading is also changing with more money now earned from supply chain management, logistics, and innovation than from outright trading. This change will, I believe, inevitably lead to more women seeking to join the sector.

But even when more women are attracted to sector, women need to do more to help themselves to advance within an extremely competitive environment. One panellist told me afterwards that women tend to believe that all they need to do to advance in their careers is to work hard and do a good job. After all, their hard work at school was rewarded by good grades in the final exams. Unfortunately, this is not enough in the world of business. As Patricia Manso pointed out recently, hard networking and self-promotion are essential in any career.

So in conclusion, the commodity trading industry is changing and in so doing so will naturally attract more women. Even so, the sector must continue to improve both its behaviour and its image. It also has to mentor male managers to recognise their unconscious biases. And once they are in the sector, women need to do more to get their contribution noticed.

Unfortunately, it may take a generation for there to be an equal number of men and women on the stage at a future FT Commodities Summit. I may not be around to see it, but it will happen.  

The FT Commodities Global Summit last week in Lausanne once again attracted many of the top players in the industry. The conference has established itself as the “must-go-to” commodity event of the year; it is the only event that I know of where you can get a genuine feel of what is occurring in the wider markets. But not only that, it is the only commodity conference I know of without a single PowerPoint presentation! Paradise!

This year’s event was entitled “Natural Resources in Transition”, and was, as expected, largely focused on the extractive industries: oil and gas, and metals. Electric vehicles were at the centre of the debate, and the effect that they would have on the demand for oil, lithium, cobalt and copper. Just a few years ago, people were discussing when oil production would peak; now the debate is about when demand will peak. The consensus at the conference was that demand will stop growing sometime around 2035, but there was some disagreement as to whether it would then decline or stabilize.

But then consensus is often wrong. At last year’s summit there was a consensus that the supply of cobalt would not keep pace with its demand from battery manufacturers; everyone at that time was bullish on cobalt prices. This year, there was a consensus that, given the right price incentives, supply is far more elastic than you would expect.

Most of the unexpected cobalt production has apparently come from artisanal mining in the DRC, unfortunately the type of mining with the worst safety conditions and greatest prevalence of child labour.

Slowing growth in oil demand is encouraging the trading companies to look more closely at renewable energy sources, and I was surprised to hear biofuels being discussed in a positive light—the first time for many years. With the current agricultural surpluses and low prices, biofuels are once again profitable and, because they help maintain farm incomes, are once again finding favour with politicians. I don’t want to be a pessimist, but that will probably only last until the next spike in food prices. The food versus fuel debate has not gone away; it is only on hold.

In addition to a keynote speech by Johnny Chi, the Chairman of COFCO International, there were three key panels on food and agriculture. The first, a “Leaders’ Debate, was with Ian McIntosh, CEO of LDC, Chris Mahoney, CEO of Glencore Agriculture, and Stefano Rettore, Head of Origination, Trading and Operations at ADM. The discussion was more upbeat than in a similar panel last year; margins have obviously improved, undoubtedly helped by the market disruption caused by the trade war between the US and China.

The main point of disaccord on the panel was the right strategy to follow in response to what appear to be structurally declining margins. As LDC has made clear over the past year, the company is looking to diversify beyond straight trading to become a food company with an integrated supply chain. Similarly, ADM has made a big push over the past years into food ingredients and flavours. Glencore, however, believes their money is better spent on trying to increase efficiency in the portion of the supply chain in which they already operate, rather than seek margins in related businesses.

The second agricultural panel was on Blockchain, and what it could bring to the trading industry. The answer appears to be improved efficiency and security, and lower costs—but no revolution. Also, it was made clear that Blockchain will take time to put into place; it is better to go slowly and get it right rather than rush it and mess it up. All of the major trading companies are cooperating on the project.

The third agricultural panel was on The Future of Food. The panel asked itself the question, “What does the consumer want?” The answer, it seems, is, “It’s complicated.”

There was agreement that environmental sustainability and human rights are now central to the food supply chain; they are no longer a “nice to have, if possible.” However it is not easy to build a truly sustainable and traceable supply chain. It is also expensive, and someone has to pay. Unfortunately that “someone” is rarely the consumer; it is more likely to be the farmer and the trader. (Even so, it still has to be done.)

Apart from a demand for sustainability and the respect for human rights, the future of food is a swirling mass of different trends and beliefs, beliefs that are now held with almost religious fervour.  There is an old saying that “you are what you eat”, but you could now add, “you eat what you believe.”

My takeaway was that the future of food is twofold. It is first “flexitarian”, with meatless Mondays and a greater concern for animal welfare. And second, and perhaps somewhat contradictory, the trend will continue for diets to contain more protein and fewer carbohydrates.  So no respite then for the sugar industry.

Louis Dreyfus Company is due later this week to publish their annual report and accounts for 2018. The company’s CEO told Reuters that year-to-date results had “significantly improved;” he suggested an upturn after a first half sapped by a soy price-hedging effect and emerging trade tensions. To put that in perspective, 2017 group net income was $225 million, excluding the now-sold metals business, close to 2015’s decade low of $211 million and well below a record $1 billion in 2012.

In the late 1970s, when he was researching his book, Merchants of Grain, Dan Morgan had considerable difficulty in obtaining any information from the “shadowy and unknown” grain trading companies. At that time they did not publish financial results.

With the exception of Cargill, they provided minimal assistance, or none at all, in the preparation of his book.

They had nothing against Dan Morgan; it was just the way things were forty years ago. At that time a US Senator said of the grain multinationals, “No one knows how they operate, what their profits are, what they pay in taxes and what effect they have on foreign policy—or much of anything else about them.”

In 1976 the French magazine L’Expansion, called Louis Dreyfus, “a commercial empire of which one knows nothing.”  Pierre Louis-Dreyfus invited Dan Morgan to lunch in his private dining room. The fish with cream sauce was apparently superb, as was the wine, but the journalist left without learning anything of interest about the company.

Georges André, head of André & Cie—and the original “A” of the ABCD group of trading companies—invited Dan to “an excellent lunch of brook trout in a village restaurant,” but all he got out of it was some historical data. ADM—the new “A” in the ABCD group—was no more open. When Dwayne Andreas became CEO of the company in 1974, one of the first things he did was to eliminate a 27-person public relations department.

Dan was granted a one-hour interview with Michel Fribourg, president of Continental Grain, but later received a letter from Continental saying, “It has been decided that we choose not to participate in further interviews with you.” The company had been in the grain business since the start of the nineteenth century, had never published a company brochure.

None of the trading houses were more obsessed with secrecy than Bunge. Dan Morgan wrote that, “Bunge was a private company about which nobody knew and nobody could speak…To Bunge officials public relations meant keeping Bunge out of the limelight.”

But then the company’s controlling families had a particular reason for avoiding the limelight. Five years earlier, in September 1974 in Buenos Aires, the Montoneros—an Argentine youth movement—kidnapped Jorge and Juan Born, 40 and 39 years old respectively, the grandsons of the founding partner and heirs apparent of the company.

Juan Born was released six months later, in March 1975, and Jorge in June 1975. No details were even given as to the ransom paid for Juan, but the Montoneros claimed that the Bunge family had paid $60 million for the release of Jorge. Although that doesn’t sound like much now, it was a huge sum in 1975, equivalent at the time to one third of the annual Argentine defense budget.

It should come as no surprise that after the kidnapping, the family withdrew even further behind a veil of secrecy. Dan Morgan “did not get near the Hirschs or the Borns, the ruling families of the Bunge Company.” The closest he got was an hour-long interview with the president of Bunge’s North American division. After the meeting, Bunge’s public relations agent told him that he had “neither the time nor the inclination for further discussions.”

Compare Dan Morgan’s difficulties in obtaining information with the ease with which Daniel Ammann gained access to Marc Rich for his book, The King of Oil, published in 2010.  Daniel wrote, “These oil and commodity traders…shared their thoughts and their memories with me, opened doors and documents, and explained the technicalities of trading and financing. They tried to show me the big picture, and they revealed their little secrets.”

But then perhaps Mr Ammann was just lucky in his timing. Up until the series of interviews that formed the backbone of his book, Marc Rich had systematically avoided reporters and was, “considered the most secretive trader of the notoriously furtive commodities trading community. For years, no one had ever seen a photograph of him. The media had to resort to artists’ sketches for their reports.”

Glencore, the successor company to Marc Rich, is now a public company, as too are ADM and Bunge. Cargill and Dreyfus are still privately owned, but both act as if they are publicly quoted; they publish detailed company reports and actively interact with the wider community, whether bond investors, clients, banks or journalists. COFCO, the new giant among the grain trading companies, is Chinese-government owned.

All of the large agricultural commodity companies are now active on social media, and actively engage with NGOs on issues related to environmental sustainability or human rights.    

This is a significant change since 1979, when Dan Morgan wrote, “The companies…stay in the shadows most of the time. Perhaps it was the ancient nightmare of the middleman-merchant that made them all so secretive—the old fear that in moments of scarcity or famine, the people would blame them for all their misfortunes, march upon their granaries, drag them into the town square and confiscate their stocks.”

Agricultural merchants are still being dragged into the town square of public opinion, and they are still regularly being blamed for varying misfortunes, but they are now very much out of the shadows.

I hope to publish my new book, “Out of the Shadows: The New Merchants of Grain” this autumn.