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After a 30-year career at the world’s largest trading companies, including Cargill, Bunge, Wilmar and Engelhart, Philip has set up Rhino, a consultancy, to share his market experience and expertise with producers, consumers and hedge funds. For my first question, I asked him how the four trading houses he had worked for differed. 

Bunge and Cargill were culturally aligned and relied heavily on communication across different parts of the business. They consistently focused on internal analytics, believing that their market edge would come from proprietary research and trading acumen.

Wilmar was more of a typical Asian trading house, with dominant leaders centralising much of the decision-making. Again, we relied heavily on physicals and fundamentals when making our trading decisions.

When I joined in 2021, Engelhart had already exited its physical businesses. We operated as a fund, relying on a combination of fundamental and quantitative analysis. We probably spent half our time on fundamentals and analytics, and the other half on interpreting data and trading from a more ‘quantamental’ perspective.

Cargill has exited physical sugar trading and now trades only derivatives. Was it a good decision?

When I was at Cargill through 2012, it was a dominant player in the industry, with a very large physical presence and assets—more at destination than at origin. The model changed after 2012. It still traded physicals but sold its assets, so it no longer had those to trade around. The company became much leaner, with a smaller footprint and lower costs.

Whether that was good or bad is difficult to judge. In today’s sugar market, it is hard to be anything other than a lean structure trading primarily in futures, or a relatively large structure with a presence across many physical markets and some assets. Once Cargill decided to step away from assets, it was probably right for them to step back from physical trading as well.

 Can you trade physical sugar without assets?

You can trade physicals without assets, but you then become more of a price taker, making it harder to find leverage in the market.

If you have assets—particularly refinery assets and storage—you can use them to build programmes in either raws or whites. You can adjust your pace, use storage flexibility, and trade more aggressively around deliveries and expiries.

Assets give you the opportunity to build leverage around futures expiries. You can still trade physicals without assets, but your position in the delivery game is weaker. You rely on third parties to build destination books and to participate in the futures market.

In my experience, assets are more valuable at destination than at origin for a trading book. At origin, logistics pressures often make it difficult to build flexibility and optionality into those assets. Elevation can become a burden when you are obliged to run at a set pace each month.

You may have some built-in flexibility, but take-or-pay commitments can require you to run elevation whether or not you have a destination for the sugar.

 Tell me about Rhino. First, where does the name come from?

It is a play on my surname and was my nickname, dating back to when I worked in Australia. We have bulls, bears and, occasionally, buffaloes—thanks to you. So I thought: why not add a rhino to the mix?

We are an information and consulting firm. We support clients by providing a trading framework and actionable insights across the global sugar market, particularly white sugar.

There is a huge amount of information in the market today, but more information does not always make hedging and pricing decisions easier. We help our clients filter the noise, explain what the information means, identify the implications, and create a simplified framework for decision-making.

We aim to help clients understand the risk of the market moving against them, the potential opportunities available to them, and the main drivers of price risk.

How has the market changed since you started in sugar 30 years ago?

When I started as a futures trader at Cargill, volumes were relatively low, and participants were mainly commercial. Our edge came from receiving information on key origins and destinations before other market participants, thanks to our local operations and global presence. We did not have social media or the internet to relay information as they do today.

Funds existed, but they were relatively small and predictable. They would buy or sell over two or three days; once they were done, they were finished. Today, the market’s composition has changed entirely. Speculators are much larger.

Fundamentals remain an important input and continue to shape the market’s medium- to long-term direction. However, speculative flows often dwarf commercial flows in the short term. Sugar can become correlated with crude oil or energy one week, and with currencies or other soft commodities the next. Correlations come and go with no logic or foresight. Politics and global macro developments can also shape short-term movements.

A commodity trader needs to understand and anticipate how macroeconomic factors may influence the market. That means traders probably hold positions for shorter periods and take fewer highly leveraged bets than before.

As the market adage goes, “Markets can remain irrational longer than you can stay solvent.”

Who are these speculators?

Let’s start with the CTAs, the Commodity Trading Advisors. They are much more important than they used to be, with assets under management about 10 times what they were 20 years ago.

There are two broad types of CTAs: discretionary and systematic. Discretionary CTAs are where people understand market fundamentals and trade accordingly. These are closer to the traditional CTAs of old.

Almost all growth over the past 20 years has come from systematic CTAs. Around 85% of CTA assets under management today are systematic. These firms employ people who build backward-looking models using tools such as moving averages and breakout levels to determine when to buy or sell.

Essentially, their models buy when markets appear to be strengthening—for example, when shorter-term averages cross longer-term averages—and sell when the opposite occurs. As signals strengthen, they scale into positions.

These funds trade across perhaps 25 or 30 commodities simultaneously. They trade without emotion. They do not necessarily know or care about the underlying fundamentals; their models tell them whether to buy or sell, and orders may be executed automatically.

They can lose money in half of their markets and still be successful if their gains in the other half are larger. They tend to make good money in trending markets and get chopped around in range-bound markets. Historically, gains in trends have often outweighed losses in range-bound markets.

To what extent are commodity markets now being traded by computers?

High-frequency trading firms can account for a significant share of daily volume—well over half in some cases.

CTAs are harder to measure, but estimates suggest that a fully deployed CTA position in sugar may be around 50,000 to 60,000 lots. If CTAs move from an extended short position to long, or vice versa, that could mean more than 100,000 lots of potential buying or selling over several days.

What about index funds—the traditional long-only ‘whales’? Are they still relevant?

They are less interesting and less relevant than CTAs, simply because they tend to be large, long and static.

There is some adjustment during the year, particularly at year-end when indices rebalance across commodities. There is also activity around the roll at futures expiry, creating liquidity and perhaps opportunities for the trade to scalp. However, their influence is probably much lower than that of CTAs, as they simply go long and sit there. Their position moves up and down somewhat, but they do not enter and exit frequently.

What about the traditional trade houses?

They still matter and retain an edge because they understand physical markets and convergence games around expiry in ways that indices, black boxes and high-frequency traders do not. However, traders are human and trade emotionally. The key for a trade house is to understand where, when and how to play.

Trade houses have at times been beaten up by getting large flat-price moves wrong when black boxes have engaged strongly in one direction. That may not be the game they should play hardest. They need to pick and choose their battles.

What is the hardest part of being a physical sugar trader?

Excluding the act of buying and selling itself, the toughest situation is taking a large position and finding that you are wrong because circumstances, crops or supply-and-demand balances have shifted.

In futures, if your position is appropriate for market liquidity, you can usually enter and exit relatively easily. In physicals, exit liquidity can be very difficult to find. The biggest challenge for physical traders is when they want to turn a position because they see values turning against them is finding exit liquidity.

Can you make money trading physical sugar without taking a position?

It is challenging to achieve a back-to-back margin on raw sugar. You cannot easily buy sugar in Brazil and sell it to a refiner in China or the Middle East for a meaningful back-to-back profit.

In whites, pockets of opportunity remain. Traders with strong destination relationships can create value. Some companies excel in containers, running relatively small positions while generating consistent margins.

On raws, you need to build positions. Your edge lies in combining a futures view with cash.

Are regional players taking market share from traditional trade houses?

On whites, yes, we have seen regional or specialised players gain market share by building relationships and doing it well.

Raw sugar still appears to be dominated by global companies with access to large destination entities.

Are state-owned companies becoming more involved in sugar trading, as they have in grain markets?

Not really. If anything, sugar has moved away from state participation and more towards private companies.

Sugar consumption is stagnant, while sugarcane ethanol faces growing competition from other feedstocks. How are producers responding?

It is a difficult environment; producers are suffering. Sugar prices have consistently been below production costs across most origins.

Brazilian mills enjoyed strong margins, returns and free cash flow two or three years ago. Today, cash flows are negative. Over the cycle, it can still be a positive-cash-flow business. The challenge is ensuring that when times are good, companies reduce debt rather than simply reinvesting all cash flow in expansion. Otherwise, they can struggle with debt when the cycle turns down.

Brazil used to be the main regulator: when sugar prices were low, the cane mix would shift significantly towards ethanol. But Brazilian corn ethanol has expanded rapidly and is now displacing the equivalent of perhaps 15–16 million tonnes of sugar in ethanol terms. That trend is likely to continue.

Is there a future for EU sugar producers?

Absolutely. Europe is a huge market.

If Europe were a single producer, it would likely produce almost enough sugar to meet domestic demand—but not quite enough. That would force imports and allow domestic prices to trade at import parity, perhaps 750–800 euros per tonne at current levels.

The question is whether exports should be its focus. Crop planning is difficult because yields are uncertain, and producers need sufficient acreage to guarantee domestic supply. Over time, Europe may reduce production slightly and see domestic prices remain consistently higher.

Is the sugar market fundamentally in structural surplus, with occasional weather-related shortages?

On a production-and-consumption basis, the answer is probably ‘no’.

However, the answer may be yes on a trade-flow basis, as stocks can often be exported relatively easily once prices rise. For example, during the recent rally, Egypt destocked significantly, China released sugar, and Vietnam sold sugar. This was not necessarily additional production; it was existing stock becoming available to the trade.

When there is a slight tightness on a production-consumption basis and prices rally, surplus stocks from many countries can be exported.

The ratoon nature of cane also matters. When there is a true deficit, and prices rise enough to incentivise more production—as in 2022—we see acreage expansion, increased fertiliser use and a relatively quick supply response. We saw something like a 15 million-tonne increase in production over a couple of years, which is significant.

Once that expansion occurs, sugar moves from origin to destination and is stored somewhere. It can then re-emerge when prices rise during a short-term production-consumption deficit.

So the market is not structurally in surplus on a production-consumption basis. But it often holds enough stocks that, from a trade-flow perspective, it is rarely truly short. Prices can draw that sugar out.

What does the future hold for the sugar market? 

Some of the major trends over the past five to 10 years are likely to continue.

First, sugar consumption is unlikely to grow anywhere near as fast as it once did. We see this in Europe, the United States and other developed markets. We also see the impact of new weight-loss drugs, with people cutting back on carbohydrates.

Historically, the industry needed to increase production consistently, perhaps by 7–8 million tonnes every five years, just to keep pace with consumption. That may no longer be necessary.

Second, climate change has made the weather more volatile and less predictable. Heat, drought, erratic rainfall, El Niño and other weather effects can wreak havoc with production.

Third, deglobalisation may lead to more regionalised world trade. Supply-chain disruptions—such as a closure of the Strait of Hormuz—show how much food moves through strategically important regions. Countries may begin to hold mandated stocks of key foodstuffs and strategic grains. They may also seek to develop more regional supply chains, particularly for white sugar.

Brazil and Thailand may remain dominant origins for raws, while whites may increasingly flow through regional destination refineries.

Since the 2008 financial crisis, the world has generally pursued deliberate destocking at destination because supply chains appeared resilient. Recent geopolitical events may change that. The move toward greater destination stocks and more regional supply chains could be a significant structural shift. Fourth, sugarcane should continue to lose market share to corn in ethanol production.

What would you say to a young graduate considering a career in physical sugar trading: Great idea, or are you mad?

This is not the best time to be a sugar trader, as margins and value creation are under pressure everywhere. But that is cyclical.

There will be moments again when physical trading offers more value and interesting convergence plays in raws and whites. Sugar remains a great commodity market. It is liquid, based on an FOB contract that is relatively easy to understand, and has multiple deliveries throughout the year.

I would encourage a young person to enter the sugar market. But I would also say: find a company with good teachers and mentors who can pass on their experience. Picking the right company and individuals is important.

Thank you, Philip, for your time and input.

©CommodityConversations®2026

The second edition of my book, The Sugar Casino, will be published in September.

When I spoke with David in March 2024, he told me about his plans to produce mycoprotein, a protein-rich biomass derived from sugar and sugar waste streams for use in various food and material applications. At the time, his company, Planetary, was building its first plant within the sugar mill in Aarberg, Switzerland. I asked him how things were going.

Our plant, the first industrial mycoprotein production site in Continental Europe and a global blueprint for agro-industrial synergies, was commissioned in 2024: all equipment was delivered and assembled, we completed the first upscaling runs, and we produced the first product. It then took around six months to reach industrial-scale volume and quality. By Q1–Q2 2025, we were fully ready with a commercialisable product and ingredient. From delivery to commissioning of a full-scale industrial fermentation site, with production within 9 months, is probably a world speed record!

We are pleased to see consistent product quality and have never experienced any contamination in the system, which is always an industry-wide concern. Once contamination enters the system, you have to abort production runs.

The initial hypotheses have been confirmed on both the commercial and technical sides. We are investing an additional CHF 5 million in the plant to increase output. The process is working as expected, with no surprises other than the usual growing pains and no unscheduled downtime.

Of course, given our strategic location on the grounds of a sugar mill, we have to adapt to its cadence. There may be cleaning cycles, steam-generator overhauls, or a break after a campaign. There may be operational constraints; however, the synergistic benefits, such as CAPEX efficiency and the availability of feedstock and utilities, far outweigh those restrictions.

Does the plant operate year-round, or only during the beet campaign?

It runs year-round, except perhaps for a few weeks during plant-wide overhauls. We have sized both the utility supplies and the overall infrastructure to operate during the campaign and the off-campaign period. In fact, year-round operation, especially the utilisation of installed assets during off-campaigns, is the synergy that makes this co-location so mutually beneficial.

What feedstocks are you using? Are you using white beet sugar?

White beet sugar is the benchmark feedstock due to its purity. From there, we optimise to realise the full potential of the sucrose value chain: lower-value inputs such as raw, thin, and thick juice, as well as molasses, work equally well within our proprietary fermentation and bioprocess platform, called Bioblocks (TM).

At full production capacity, the use of these sugar side streams and precursors can deliver gross margins on the final protein ingredient of well above 50 per cent, which, in the context of commodity production, is a gold mine, especially when compared to other sugar side-stream valorisation strategies such as ethanol production!

Starch-based feedstocks, such as glucose, as well as food-industry side streams, can also serve as highly effective and cost-effective inputs for our process.

Can you use corn? Would it be economically and technically competitive?

Hydrolysed corn starch delivers glucose—also known as dextrose in the United States. Many fermentation processes rely on dextrose as an input, and we can use it too. In fact, sucrose itself is composed of dextrose and fructose, both of which are metabolised by our microorganisms and converted into protein.

Given the business potential, we have identified a strong, synergistic opportunity in the regional sucrose industry. A few global players largely control corn glucose and dextrose. And whilst those generalist carbohydrate producers present a significant opportunity for large-scale production, we also see opportunities with local, family-owned sugar cane or sugar beet processors in the more fragmented sucrose industry. These regional champions often face individual challenges, and whenever our technology offers an economically compelling solution, they tend to move quickly.

Refined sugar may sometimes have a cost advantage or disadvantage relative to glucose, depending on the region and year. But as you move upstream towards thin juice and sweet water, feedstocks become extremely cost-competitive on a carbohydrate-equivalent basis because less energy is consumed to produce them.

In 2023, you were keen to produce high-quality protein. How does yours compare with other proteins on the market?

Quality has several dimensions. There is organoleptic quality: how the product tastes, looks and feels to a consumer. There is nutritional quality: how the protein and other nutrients are structured. And there are functional properties: how the ingredient behaves when combined with other ingredients.

On the organoleptic side, our mycoprotein is a three-dimensional product. It is almost like dough: you can shape it into different sizes and forms. That makes it extremely versatile compared with powdered protein. It is a bit like cookie or play dough.

It is also very neutral in taste. Pea protein has a pronounced leguminous off-taste, which can be acceptable but often needs masking. Mycoprotein is mild in taste: One of the world’s largest chocolate producers incorporated 30 per cent of planetary mycoprotein into its chocolate. Its master tasters could not detect any difference compared with normal chocolate. This allowed us to produce a high-protein chocolate without animal ingredients while retaining a neutral taste.

The colour is also neutral: bland, white and beige-ish. It can be coloured if desired, making it highly versatile.

What about the nutritional quality of the protein?

In the last interview, we discussed PDCAAS—the protein digestibility-corrected amino acid score —which reflects the nutritional completeness of a protein. Our mycoprotein scores 0.996. A perfect score of 1 is generally associated with milk and eggs. Beef or chicken score around 0.92; pea protein scores around 0.7; and soy is reasonably strong but an allergen.

Mycoprotein is the highest-scoring non-animal, non-milk and non-egg protein on that measure. In the US, any ‘source of protein claims’ must be PDCAAS-adjusted: protein content is multiplied by the actual PDCAAS score. That is a meaningful tailwind for our product.

Another benefit of mycoprotein is its high dietary fibre content, consisting of beta-glucans and chitin. In the context of GLP-1 drugs and shifting consumer preferences, this is increasingly important for promoting gut microbiome activity, cardiometabolic health, and glycaemic control, as GLP-1 medications tend to substantially reduce food intake.

Further nutritional benefits include longevity-supporting compounds such as spermidine and choline.

Given its nutritional diversity, we see mycoprotein more as a superfood or wholesome ingredient than as simply a protein.

You seem to have landed in a sweet spot. On the demand side, carbohydrates are under pressure, while protein and fibre are in demand. On the supply side, sugar companies face stiff competition from corn ethanol. Did you anticipate that?

Of course, it was all planned meticulously from the beginning!

More seriously, in 2022 we recognised that synthetic biology, and fermentation in particular, was having a major moment across food, materials, ingredients, pharmaceuticals and even energy. Many fermentation companies were emerging, but little industrial infrastructure existed to grow microorganisms in large vessels.

Initially, we aimed to be a contract manufacturing organisation, building a large plant capable of producing multiple products in bioreactors. But we quickly realised that no one would bankroll a $150 million facility at an acceptable dilution.

We looked for a more strategic solution and identified upstream and downstream synergies with existing industrial players. Microorganisms need carbohydrates, which come from the sugar and starch industry.

While glucose is commonly used in fermentation, Western Europe is heavily reliant on sucrose and sugar beet. We adapted our bioprocess to metabolise different parts of the sucrose value chain. This has made us competitive with glucose-based fermentation while creating a technical and business playbook that complements the sugar industry.

Do you have any other plants under construction or planned?

We have several partnerships underway. One is with the largest sugar and potato company in the Netherlands. Another is with a publicly listed company in India. We also have partnerships in the United States and other regions. Our strategy is to locate production either where production economics are particularly favourable, such as India or Brazil, or where consumer markets are especially large, such as the US and European protein markets.

How is funding going? Are there plans for an IPO?

We are currently privately funded and remain a private company. We closed a CHF 22 million Series A round in April, bringing total funding to just over CHF 30 million. The funding comprises a mix of equity and debt. We seek to use debt capital when putting steel in the ground, rather than using equity to finance physical infrastructure.

Looking ahead, Planetary is well-positioned to become a strategic partner for large food companies, commodity actors, food processors, or vertically integrated retailers. This position could ultimately lead to either joining forces with a strategic partner or becoming a standalone listed company.

We are not focused solely on producing mycoprotein, even though it is our principal commercial product today. Our infrastructure can produce a range of compounds, including other proteins, colouring agents, fats and lipids, and nutraceuticals. Beyond food, we are also exploring textile and fabric applications, as well as PLA, PHLA and broader plastics applications.

We see ourselves as a full-stack bioeconomy player. We operate the technology and license it to sugar companies and other carbohydrate and starch producers, rather than focusing solely on producing and commercialising mycoprotein.

In 2023, you said the bioeconomy could require one billion tonnes of carbohydrates per year. Do you still stand by that?

I would describe it as a potential rather than a forecast. It was based on a McKinsey study suggesting that up to 70 per cent of the economy’s physical inputs could ultimately be produced using synthetic biology.

By physical inputs, we mean the things people can touch and consume: food, materials and other products. If you convert that potential into a mass-and-energy balance, it could imply consuming roughly one billion tonnes of sugar to produce the projected output. That is around four times current global sugar production, which is about 250 million tonnes.

That scale could be reached only if a substantial share of the corn and molasses currently used as animal feed were redirected to carbohydrate production.

Is it correct that it takes two grams of sugar to make one gram of mycoprotein?

The exact answer depends on whether you are looking at wet product or dry matter, and it cannot be generalised across the bioeconomy.

For mycoprotein, 1 unit of molasses or 0.5 units of sugar yield about 0.75 units of wet mycoprotein. Mycoprotein is about 24 per cent dry matter, so this figure needs to be adjusted when comparing on a dry-matter basis. Different end products—wet mycoprotein, biosynthetically produced plastics, and so on—have different dry-matter contents, so the input-output relationship always depends on the specific application.

You won the WIPO Global Innovation Award in 2025. Tell me about that.

Planetary sells mycoprotein as an ingredient, but we also license our BioBlocks (TM) technology platform to sugar companies and other carbohydrate and starch producers worldwide. They can use our processes to build their own high-value protein-production infrastructure.

Because that technology is both innovative and proprietary, the World Intellectual Property Organisation awarded Planetary the 2025 Global Innovation Award. Only ten companies receive the award each year. It is a welcome recognition of the potential of our full-stack platform approach and of the economic and societal potential of our technology.

Who are your competitors? Are you competing for every deal?

In the narrowest sense—companies in the same region doing the same thing—we are fairly alone. A few other companies are looking to produce mycoprotein in Europe, but they are either not yet at industrial scale or have struggled with the technological foundations. Some invested in infrastructure before fully financing their plants; others failed due to persistent contamination during upstream processing.

In that narrow sense, we would like to see more participants, as it takes multiple parties to create a market. We are not competing in a zero-sum market.

More broadly, we are enriching food formulations and partially replacing animal protein. We are also developing hybrid-meat applications, such as supplementing 80 per cent minced beef with 20 per cent mycoprotein. Other plant proteins, such as pea and soy, also have their own roles and niches. We are not entering the market as a challenger seeking to replace every protein; we are creating new applications where our ingredient fits best.

As I mentioned earlier, sugar producers worldwide are under pressure from stagnant sugar demand and competition from corn-based ethanol. Are the producers pleased to see you when you knock on their door?

Absolutely. A fully functioning fermentation facility—for example, four 50,000-litre bioreactors—can consume up to 10–15 per cent of a host sugar mill’s refined-sugar output, depending on the mill’s size. That represents significant offtake certainty in a commodity market.

We also have greater pricing flexibility than a large consumer-packaged-goods buyer with multiple supply sources and margin pressure. Our mycoprotein delivers a comfortable mid-double-digit gross margin, which allows us to set long-term pricing and service levels with sugar companies and gives confidence that the sugar or side streams will be consumed and incorporated into our products.

Beyond feedstock offtake, the synergies lie in increased utilisation of existing assets and the opening of a whole new product portfolio, which can add commercial flexibility during S&D overhang, price volatility, and policy-driven constraints.

Have you carried out a carbon footprint analysis comparing it with animal proteins?

Yes, the impact on GHG emissions, land use and water use of mycoprotein vs other protein sources has been analysed. The current protein production system is rather inefficient, with 75% of land only producing 18% of global calories.

A kilogram of meat emits over 11 kg of CO2 equivalents, based on the average production of a kg of beef, pork, chicken, and lamb. A comparable unit of Mycoprotein releases 3.70 kg CO2e, a reduction of ~67%.

In terms of land use, 75% of global agricultural land is currently used for livestock value chains. A mycoprotein substitute reduces the per KG land use by over 80% (23.21 m2 of land per kg of meat vs 4 m2 for mycoprotein).

The most apparent impact, however, is the saving of 90% of water (0.53 m3/kg meat vs 0.48 m3/kg of mycoprotein). For comparison, the average meat-attributed water-footprint equivalent consumption per American consumer per year is 750,000 litres, or 5,000 bathtubs.

Mycoprotein is more sustainable not only than beef and chicken but also, in relevant respects, than legumes such as soy and pea. We produce everything on site in a bioreactor. The fermentation process can run on solar energy or cogeneration, yielding a regionally produced protein that does not need to be shipped globally.

That creates a much cleaner supply chain. The environmental case is important given the impact of livestock production, particularly beef production.

Where will future growth come from? Will it come through licensing plants, building plants, or expanding into other food ingredients or plastics?

We need to focus, but we also need to be ambitious. It is really about sequencing our ambition.

In the near term, our commercial priority is to develop a suite of hybrid meat products, ready-to-eat and convenience products, and high-protein/high-fibre applications for sports nutrition and a health-conscious diet.

At the same time, in line with product demand, we are expanding the licensing platform with partners in locations where production has clear systemic cost advantages—such as India or Brazil—or where consumer demand is high—such as Europe or the United States. We want to grow capacity in lockstep with demand and avoid getting ahead of the market.

Over the medium- to long-term, we will expand beyond mycoprotein into other proteins, fats, lipids, and plastics. We call this a ‘land and expand’ strategy: once we have partnered with a carbohydrate producer and built a mycoprotein production site, we can expand into further applications, including yeast, plastics, and other products.

What final message would you like to share with readers?

The bioeconomy holds enormous potential for the carbohydrates industry. The world is changing, and new technologies are enabling us to redesign the products we know through synthetic biology. These synthetic biology processes require carbohydrates as feedstocks.

The sugar industry will continue to experience cycles, policy shifts and evolving consumer demand. In the long term, we believe the world will need to produce far more carbohydrates than it currently expects. Planetary is here to help accelerate that future. SUGAR IS THE NEW OIL!

Thank you, David, for your time and input.

In September, I will publish The Second Edition of The Sugar Casino (Revisted), updated and with the best sugar-related conversations over the past ten years.

© Commodity Conversations® 2026

 

I sometimes mentor young people seeking a career in commodity trading, often giving them practice interviews. I thought it might be of interest to share a recent conversation with Axel de la Roche, who, at 22, is just finishing his finance studies at Leavey School of  Business at Santa Clara University and is seeking a career in commodities. I hope it helps and inspires other young people considering a career in the sector.

JK. Good morning, Axel, and welcome to Commodity Conversations. Please tell me about your studies, your rowing, and why you want to pursue a career in commodity trading.

AR. I chose finance because I knew I wanted to engage with markets and understand how they work, even though I did not have a clear career path when I entered university. Within the business school, finance felt like the most all‑encompassing route, combining exposure to markets and current events with quantitative skills that many students otherwise learn outside the classroom.

Over time, my electives have become more focused on international finance and derivatives; I have taken courses in options and futures trading, as well as in international finance, covering topics such as currency swaps.

Markets fascinate me, as do the logistics and systems that underpin international trade in physical commodities.

I read “The World for Sale” by Javier Blas and Jack Farchy, which proved to be an excellent introduction to the industry. I also read “The King of Oil” by Daniel Ammann, which I found both fascinating and enjoyable. Together, the two books encouraged me to pursue a career in physical commodity trading.

JK. You are at a university in California, where we mostly hear about tech billionaires and the money in tech. Why do you want to go into commodities rather than tech?

AR. Tech feels impersonal to me, with weaker relationship‑building than in commodities. Commodities remain a relationship business at scale; technology plays a major role, but success still hinges on the ability to build and manage relationships and to operate within a comprehensive ecosystem that spans shipping, finance, geopolitics, and even weather.

In tech, you might be hyper‑focused on a small part of a company’s product, whereas in commodities, you work across logistics, markets, risk, and counterparties, which I find far more engaging.

JK. What position are you aiming for? Are you looking to be an operator, a trader, or in finance?

AR. My goal is to become a physical commodities trader running my own book, but I recognise this is not realistic from day one. I want to start at the operational level, learn logistics in detail, then work my way through different parts of a trading house—operations, middle office, finance—before moving into trading. My aim is to build a comprehensive understanding of the business, because from what I have seen, it is impossible to “just jump in” as a trader without years of experience.

JK. Which commodities interest you?

AR. I am particularly interested in soft commodities, especially agricultural products, which is why I reached out to you. I am also interested in metals. Agricultural products are essential because people will always need to eat; they remain fundamental to the world economy. Metals are fascinating because they underpin technological progress—whether in batteries, phones, or other devices—yet many people overlook how central metals and mining are to those innovations.

JK. Do you follow the financial markets or invest in them?

AR. Yes, I manage my own equity portfolio and closely follow financial markets. I have a student subscription to the Financial Times and set alerts for major commodities, key geopolitical developments, and financial markets. This helps me stay informed.

JK. Why should a trading house give you a job rather than someone else?

AR. First, I am good with people; I build rapport quickly, empathise well, and form strong relationships, which is crucial in a relationship‑driven business.

Second, my rowing career, as a full-time Division 1 student-athlete, has hardwired me to compete and endure long, demanding hours in addition to challenging coursework. I am used to pushing through difficult, repetitive, or “boring” work and keeping my head down when things are tough.

Third, I bring an international background: I was born and raised in the United States, but my father is Colombian, and my mother is Swedish. I have travelled extensively and worked in developing countries. Commodities are inherently global, and I am excited, not afraid, to be “out in the bush” at the raw-materials production level, which I see as a core appeal of the business.

JK. There has been debate about whether top‑class athletes make better traders, especially in team sports. To what extent is rowing a team sport?

AR. I see rowing as the ultimate team sport and as highly applicable to real life and any job. You take eight individuals and have to make them move as one, which is especially difficult under extreme physical stress and requires letting go of ego, understanding others, and committing to a goal larger than yourself. If one person makes a mistake, it affects everyone equally, regardless of how well others are doing.

At the same time, rowing is intensely competitive and data‑driven: ergometer tests provide precise, empirical comparisons of performance within the team, fostering constant internal competition for boat positions while still demanding that we come together around shared goals.

Rowing is the best thing that has ever happened to me. I did not expect to row in high school and initially disliked the sport, but embracing it opened doors to Santa Clara University, brought me to California, and allowed me to see a new part of the United States.

It has also taught me a great deal about myself: how to be a good teammate, which qualities hold people back, and how to address my own weaknesses, including work ethic and time management.

Balancing rowing with academics early at university forced me to prioritise—putting rowing and academics first and accepting that I could not simply go out and party all the time—which has been invaluable.

JK. What are you looking for in an employer—something structured and large, or a smaller company with a more opportunistic career path?

AR. At the beginning of my career, I think a large, structured employer would suit me well, as it would offer a clear framework and training.

JK. Now it is your turn to ask me questions.

AR. My first question is: from your vantage point, where do you see commodities heading in terms of technological adoption? While there have been many technological improvements, the physical trading of goods still seems, from my perspective, to operate within systems that have not fundamentally changed in 30‑plus years. Do you think we are close to a significant shift, or will physical trading continue to function much as it does now?

JK: I believe the physical commodity trade will remain relationship- and trust-based, with platforms struggling because people prefer to know their counterparties. Technology will play a more important role in documentary processes, trade finance, payment rails, and tokenisation. It will also play a role in traceability. There have been numerous attempts to build trading platforms, but the core act of trading still depends on human relationships and trust between counterparties.

AR. What are the biggest dangers young people face when entering the business—whether it is naivety, overconfidence about career progression, or something else?

JK. Historically, physical commodity trading was male-dominated and testosterone-driven, with some bullying, but that has improved. There are still not enough female traders, though that will take time to change.

Naivety shouldn’t be a problem if you have done the research to understand what the career involves and are confident it is for you.

Overconfidence is something to be mindful of, especially if you have a good university background, but trading is a humbling occupation. Rowing is a humbling occupation, too!

AR. Given my interests in energy, metals, and agricultural products, do you see significant differences in risk and logistics across these sectors, or are their supply chains fundamentally similar from a trader’s perspective?

JK. Metals and energy are flow commodities, whereas agricultural commodities are seasonal, with only one or two harvests a year. I recently spoke with Doug King, who has a strong preference for flow commodities. You should check out his interview.

Metals and most traditional energy sources are also largely extracted commodities, often with complex political and risk dynamics at the source.

AR. What one thing do you advise me to do to increase my chances of finding a commodity-trading job?

JK. Ask yourself seriously if commodity trading is for you.

To help answer that, learn as much as possible about the sector. Listen to the StrongSource podcast – not just the most recent one, but all of them.

The same applies to the HC Commodities Podcast for a more holistic coverage and a wider range of commodities.

Subscribe to my blog (for free) and read my books. And, if you are interested in sugar, listen to my daughter’s ECRUU podcasts.

Subscribe (for free) to my blogs and read (cheaply on Kindle) all my books.

Follow Samuel Basi on LinkedIn and read his recent book, “The Physical Trade.” To learn more about the extractive commodities, I recommend “The Material World” by Ed Conway.

Oh, and make sure you read Reminiscences of a Stock Operator by Edwin Lefevre about the legendary Jesse Livermore.

If your research leaves you wanting to know more, then commodity trading is for you!

But that’s enough questions. I have one last one for you: What should trade houses do to attract more and better candidates?

AR. From my experience, information about opportunities in commodity trading is often closely guarded or difficult to access. It often takes substantial research to find roles and understand how to enter the business, even though opportunities do exist.

I do not think firms should advertise as broadly as large banks do through mass recruitment, but greater visibility into what they are seeking and clearer entry paths for young people would be very helpful. That would still ensure they attract motivated candidates who have done their homework, while making the industry slightly less opaque to outsiders.

JK. Good answer. Thank you, Axel, for agreeing to let me publish this conversation, and I wish you every success in your future career.

© Commodity Conversations®2026

 

 

To start, please tell me about yourself and your career journey so far.

My name is Ben French. I’m based in London and work at Czarnikow as Global Head of the Vive programme. I’ve been with Czarnikow for 15 years, working across bulk, shipping and chartering in the early days, then structuring supply chains for white refined sugar in sub-Saharan Africa, particularly moving South African sugar cross-border into Zimbabwe, Mozambique and East Africa.

I later moved to Singapore for eight years as Czarnikow broadened into a wider multi-commodity supply chain service, and my role expanded accordingly. I remained closely involved in raw and refined sugar while helping to build the multi-commodity approach and to launch Vive in Asia, expanding from an initial Sub-Saharan focus to a service for our industrial and producer clients to align on sustainability.

I come from a farming family in Scotland, studied agriculture, spent some time in shipping, and then returned to agriculture. My only exposure to sugar before Czarnikow was a bit of UK beet farming and a copy of The Sugar Trading Manual sent for my interview.

If you had to explain Vive to a trading desk in 60 seconds, what would you say?

Vive is a multi-commodity sustainability verification programme for commodity supply chains. It began with sugar but now covers multiple commodities, and its core purpose is to help producers align with the sustainability requirements of industrial buyers, regulators, banks, and other stakeholders.

In practical terms, we map the market’s needs for sustainable, regenerative, or carbon-measured products, and then help producers reach that level in a commercially viable way, so that real supply chains of sustainable products can form rather than just one-off certified volumes.

I see on your website that Vive is a joint venture between Czarnikow and Intellync. Our readers will all know Czarnikow, but tell me about Intellync.

When we designed Vive, we sought to avoid any conflict of interest between Czarnikow’s commercial activities and the integrity of sustainability assessments. Czarnikow helps to develop a programme’s strategy and commercial development, but is not involved in conducting or influencing assessments or their outcomes.

Our partner, Intellync, 100% owned by AB Agri (part of Associated British Foods), has extensive experience in building sustainability frameworks and due diligence platforms for supermarkets and industry across sectors such as dairy, tobacco, and cotton. They have no commercial involvement in the commodities themselves, but they have decades of experience extracting, structuring, and verifying data across complex supply chains.

The joint venture combines Czarnikow’s 175 years of market intelligence and agricultural commodity-supply-chain expertise with Intellync’s 25 years of experience in sustainability platforms and verification, enabling Vive to build demand-led, data-driven sustainability solutions that work across complex supply chains, from large, mechanised operations to smallholders.

When Vive was founded, what market gap did Czarnikow identify? Having founded it, what is your USP?

We didn’t set out to replace existing certification schemes but to tackle two specific problems: the pace and precision of change, and the weak commercial link between certification and demand. Many certification efforts across the commodity sector were conducted in isolation from actual supply chains, with producers investing in certification without reliable market access or a tangible commercial return, especially when focused on local or “wet” markets. If that return never materialises, the investment is hard to sustain.

Our aim with Vive was not to certify the entire sugar sector, but to measure success by the number and volume of sustainable supply chains we could help create, in which value flows back along the chain from end user to farmer, miller, and refiner.

The USP is that Vive is a commercially aligned, market-driven programme built around continuous improvement and demand alignment rather than policing the industry against a fixed academic standard. Producers can effectively “stack” criteria under one umbrella to access specific markets, and we benchmark our criteria against major standards and regulations while keeping them practical and applicable.

You describe Vive as a verification, not a certification, model. Why did you go that route?

We chose verification to provide flexibility and speed in a fast‑changing landscape of sustainability requirements, regulations, and methodologies. Verification allows us to adapt the programme to new market needs without multi‑year revision cycles, while still ensuring proper stakeholder engagement and maintaining robust criteria.

Philosophically, we did not set out to police the sector with a rigid standard; instead, we align market needs with what producers can do, and then verify what is actually in place on the ground. Participants enter a continuous improvement journey: we verify governance, policies, and practices against our verification standard rather than simply passing or failing them against a fixed certification threshold.

Our Vive claim level is benchmarked against the requirements of more than 100 major food and beverage companies, a range of EU regulations, and several schemes, including ProTerra, Smartcane BMP, and Bonsucro (via an independent benchmark commissioned by a large beverage company). The criteria are robust, but delivery is more flexible and can be updated. Over time, if regulation in a given commodity or region requires full certification, we would not rule out adding a certification layer alongside verification to ensure we can continue to provide producers with a viable route to market.

On your website, you describe yourselves as fully embedded in the supply chain. What does this look like on a day-to-day basis, and how does it differ from a conventional audit model?

Being embedded means we understand and verify the full chain of custody and traceability from the farm to the final buyer, rather than simply auditing a single node in isolation. For example, sugar supply chains are notoriously complex, with multiple routes to market: a Thai mill selling white sugar directly to an industrial user is very different from a Brazilian VHP mill selling to a trader, then to a refiner, then re‑exporting.

Driving sustainable volume and ensuring value flows back along the chain requires a deep understanding of how commodities move, who handles them, where the risks lie, and how traceability is maintained. Czarnikow itself facilitates the supply of Vive products but is assessed under the same chain-of-custody module as any other business or trader that can trade Vive products.

Across the Vive team, we combine specialists in regenerative agriculture, deforestation, and carbon with decades of hands‑on experience building commodity supply chains. That mixture of technical sustainability expertise and supply chain know‑how is what “embedded” means in practice.

Could you give me an example of how that embedded approach has affected change in practice?

Once we help create a supply chain that is commercially viable and repeatable, the real impact is when it continues without our hand‑holding every transaction. We now see refiners selling significant volumes of Vive products directly to their industrial clients, and those refiners in turn sourcing Vive raw sugar from origins like Brazil at a premium because they see the value.

There is no fixed premium for Vive; we encourage fair value to be negotiated and premiums to be paid when required. Importantly, value can be realised through market access, long‑term contracts, or improved financing, rather than relying exclusively on a headline price uplift. We are also working closely with trade finance providers through Vive Investor Assurance. The cost of capital for farmers and millers is often a more critical lever than a small premium on a fraction of their volume. Banks and private credit funds are keen to channel more working capital into sustainable production.

If we can help producers demonstrate robust, verified ESG performance, that can translate into better financing terms, which are often more meaningful to them than a modest price premium.

Is the system self-financing, or even profitable, for a producer?

That is our goal, but we are cautious about making sweeping promises. In the past, many sustainability programmes claimed that certification would automatically deliver meaningful premiums, yet for a long time the underlying demand was neither strong nor broad enough to justify those claims. We are deliberate in explaining what Vive can and cannot do. Joining the programme is not a magic switch; it requires effort and active engagement from management and commercial teams to unlock benefits through marketing, sales, financing, and customer relationships.

We see two types of participants: those who invest in understanding and leveraging Vive, and those who join and then expect the benefits to arrive automatically. For the first group, we regularly see more than full recovery of participation costs, and in some cases very attractive returns; for the second group, results are naturally more limited. Overall, participants more than cover their costs, but outcomes depend heavily on how proactively they use the programme.

Do you share best practices for productivity at the farm and the mill? Do participants sometimes achieve productivity and cost-reduction gains through your program?

Yes, and that aspect is becoming increasingly important. Our offering to producers has four tiers. First is the core Vive responsible sourcing framework, which is now broadly aligned with what over 100 major food and beverage companies expect in ESG risk coverage and is convergent with global frameworks such as SAI FSA. This baseline already embeds many agronomic and operational best practices; for example, within the farm module, we may guide participants towards soil sampling and more precise fertiliser application, which can improve yields or reduce input costs over time.

Second is our regenerative agriculture module, Vive Regen Ag, developed in response to rising interest in and investment in regenerative practices. Rather than simply ticking off a list of techniques such as minimum tillage or cover cropping, we verify that the right practices are applied in the right context, based on appropriate pre‑implementation analysis, so that “regenerative” does not become an empty marketing claim.

Third is our Vive Climate Action carbon measurement tool, a primary-data-based system certified for any arable crop and widely used in the sugar sector, now covering around 40% of Vive participants. We calculate individual footprints using real farm and mill data, benchmark them against country and regional averages, and highlight hotspots where decarbonisation and efficiency improvements are possible.

Finally, we are developing “smart carbon sourcing” models within supply sheds, enabling mills to identify low-carbon crop streams and connect them with buyers willing to pay a premium for reduced-carbon products. This can catalyse the expansion of best practice across a wider area, and over time it should translate into both lower emissions and better resource efficiency.

Do you put the carbon footprint or the Vive logo on retail packets?

It can be done, but it has not been a major focus. One reason sugar has historically lagged cocoa, coffee, bananas, soy, and palm in the certified or verified share of global production is consumer perception. Products such as coffee and chocolate have strong, distinctive flavours and origin stories, and consumers are accustomed to seeing detailed information on the front of the pack about origin, fair trade, organic status, and so on. Sugar, by contrast, is often seen as a generic ingredient—sucrose—listed in small print on the back rather than as a hero on the front, so there has been less direct consumer pull for sustainability claims on sugar retail packs.

That said, NGO reports such as Oxfam’s “Sugar Rush” in 2013 raised awareness among industrial buyers of social and environmental risks in sugar supply chains, and this has driven much of the current demand from the B2B side. We do see some use of the Vive logo on industrial bags in certain jurisdictions, and it may play a more visible role in non‑food uses of sugar, such as biomaterials or textiles, where consumers are increasingly interested in the sustainability of fibres and materials. But for now, most of the demand we respond to comes from industrial buyers rather than consumers at the supermarket shelf.

Listening to you, Ben, you seem proud of what you’re doing, and rightly so. Is there a project or a supply chain you’re particularly proud of?

We are active in around 25 markets, and each completed Vive supply chain represents a great deal of work and collaboration, so there is pride in each one. The ones that stand out most are those where we have uncovered serious issues and then seen genuine improvement over several years, rather than simply recognising those already performing well.

In parts of Southeast Asia, for example, we have found significant non‑compliances in smallholder supply that clearly failed to meet any global standard. As we are not an NGO that publishes everyone’s shortcomings, mills are more willing to let us in, to get a clear picture of what is happening, and to work with us on remediation rather than retreat. In some cases, mills were genuinely unaware of what was happening at the fringes of their cane supply; after we reported the findings, they implemented farm checks, training, and improved due diligence, and, over time, progressed to the Vive claim level.

From a commercial perspective, I’m also proud of the long, complex supply chains we’ve painstakingly aligned, bringing together farms, mills, traders, refiners, and end users—often convincing the last reluctant actor, such as a refiner, to come on board—so that everyone is “singing from the same song sheet” and a long‑term, repeatable, sustainable partnership is established.

I see from your website that you have numerous buyers supporting the programme. What does that entail?

We are not a paid membership scheme, but we realised early on that when you sit with a mill deep in a cane‑growing region and talk about demand for sustainable products on the other side of the world, it can feel abstract. To bridge that gap, we created the “Buyers Supporting Vive” platform, which is free for buyers. Any buyer who has completed due diligence against our criteria and governance and is comfortable with the programme can sign up to indicate that Vive is an acceptable pathway for them.

There is no obligation to buy Vive products or to grant exclusivity, but it gives producers a clear view of which major buyers recognise the programme and where potential opportunities lie. It has proven powerful in practice: several of the world’s top food and beverage companies have signed up, and we are increasingly seeing interest from sectors beyond food and beverage, such as biofuels and textiles.

Because Vive is multi‑commodity and uses a common carbon calculator and framework across crops such as cane and corn, buyers in biofuels or aviation fuel can compare sustainability performance across feedstocks on a like‑for‑like basis, rather than trying to reconcile different schemes and methodologies.

One of the themes I’ve been writing about recently is that sustainability is now taking a back seat to food security. Are people more interested in food security than in sustainability? Aren’t they essentially the same thing?

In practice, they are deeply intertwined. Food security has its own metrics and debates, but long‑term food security depends on sustainable and increasingly regenerative production: you need resilient yields, functioning ecosystems, and compliant, stable operations to secure supply over decades.

Look, for instance, at parts of the Middle East, where moving freight in and out has become more challenging, and some countries rely on imports for up to 90% of their food needs. Historically, food security strategies often focused on holding stocks at destination, but there is now a shift towards investing upstream in farmland and production to control the timing and reliability of supply more directly.

Once you are investing at origin, you care not only about immediate availability but also about long‑term yield, workforce stability, regulatory compliance, and climate resilience. All of these are closely linked to sustainability practices. Rather than food security replacing sustainability, we see them converging: sustainable, resilient production is a core foundation of food security, not a competing priority.

What role do you expect technologies such as remote sensing, AI analytics, blockchain-style platforms, and traceability to play in the future? How do you see them evolving?

These technologies will be important, but they are only as good as the data they receive and the realities on the ground. There has been a wave of enthusiasm for blockchain and digital platforms, and they can be impressive in terms of visualisation and data handling. However, without robust first-mile data—accurate sourcing, barcoding, warehousing, and trucking information—a beautifully designed platform will still contain weak or incomplete information.

We saw this with the EUDR, where many initial responses focused on building platforms, while we felt the priority should be to get on the ground and work out how to trace products reliably from the first mile. That said, AI and automation have real potential to reduce the cost and time of verification by supporting risk‑based approaches and streamlining data analysis, thereby making robust verification more accessible.

The key caveat is that none of this replaces “boots on the ground”: you still need auditors and specialists to visit operations, talk to people, and look around corners. A system based purely on remote questionnaires and automated inference would be both easier to manipulate and less able to detect issues you did not know to ask about. For us, technology will augment, not replace, high‑quality fieldwork and assurance.

For producers, traders, or buyers who are still on the fence, what is the one step you’d like them to take after this conversation?

There are really two fences: whether to engage with sustainability at all, and which programme to use.

For those still wondering whether to engage, I’d urge them to recognise that regulation and market expectations are steadily moving sustainability from optional to mandatory. Rather than fearing that shift, it helps to see sustainability as another service area where experienced providers can support you—much like price risk management or trade finance—rather than as an extra layer of policing. The resource commitment is often less daunting than people imagine, provided they have the right guidance.

For those choosing between programmes, I would encourage them to look beyond box‑ticking and ask what each programme delivers for their business: how it supports commercial opportunities, aligns with target customers, ensures regulatory compliance, and builds long‑term resilience. Different commodities and markets may require different tools, but the central question is what outcomes you want—market access, financing, risk management—and which programme best helps you achieve them.

Last question: what question should I have asked you but didn’t ask?

I think the missing question is: why are we doing this, both as a company and personally?

From Czarnikow’s perspective, as we evolved from a traditional sugar broker into a broader supply chain services company, sustainability became an essential part of our service set. Our clients increasingly needed robust sustainability data and support, just as they needed risk management, financing, and market analysis, so it was natural that we should build a capability in that area. This has also deepened our relationships with both producers and buyers, moving us away from a narrow “trader” identity towards a partnership that helps them develop their own businesses.

Internally, Vive has been important for culture and recruitment: many of the people joining Czarnikow today want to work for a company that aims to create a positive impact while remaining commercially disciplined, and the programme has become a focal point for this.

On a personal level, I come from a long line of farmers and have spent 15 years in commodity markets, witnessing both excellent and very poor agricultural practices. I feel a responsibility, given my position running Vive, to help steer things in the right direction—towards better-managed farms, better treatment of workers, and more sustainable yields. That “poacher turned gamekeeper” element is a big part of why I do it.

Thank you, Ben, for your time and input.

©Commodity Conversations®2026

A Conversation with Martin Todd

Martin was previously managing director/CEO of LMC International, an economic consultancy of 50+ staff covering the global agriculture sector. In addition to his managerial role, he contributed to projects in his primary area of expertise: sugar, starch & starch-based sweeteners, as well as a range of cross-commodity issues. He now works as an independent consultant.

AI Summary

 

Good afternoon, Martin, and welcome to Commodity Conversations. Last week, I interviewed Christoph Berg about the corn versus sugarcane title fight. He argued that it is cheaper in Brazil to produce ethanol from corn than from sugarcane. What’s your take on it?

I agree with him that corn ethanol in Brazil is currently cheaper to produce than cane ethanol, commonly quoted as about 30 per cent lower.

How did this happen? How do you explain it?

The story is tied to the development of corn production in Brazil’s Centre‑West (Goiás, Mato Grosso, etc.). These frontiers were opened by soybeans, not corn. Soybeans are the world’s key protein crop, with a much higher value per tonne than corn. A rule of thumb is that soybean prices are roughly 2.4 times corn prices. Because soybeans are higher‑value, they can bear long‑distance transport costs (1,000–2000 km to ports) better than corn.

Brazilian farmers then started to double‑crop corn, growing soybeans in the main rainy season (Safra) and corn in the second crop (safrinha) immediately after early soy harvests, taking advantage of residual soil moisture.

Safrinha corn is typically a low‑input, low‑output crop. Yields are lower than those of corn grown as the main crop. Inputs such as fertiliser are also lower, improving the cost profile per hectare.

But when corn prices are low, much of its value can be lost in logistics if you try to ship it directly to the coast.

Brazil has responded by “intensifying” value in the interior, building large poultry and livestock complexes, turning corn and soy into higher‑value meat products, and building corn–ethanol plants, which use roughly 2.4 tonnes of corn per cubic metre of ethanol, thereby creating a more valuable and more transportable product (ethanol).

On the environmental side, the comparison is more complex. In the US Midwest, corn ethanol plants typically burn natural gas; in Brazil, many corn ethanol plants have used biomass (wood chips, etc.) as fuel because of limited gas pipeline infrastructure, which may improve their carbon footprint.

At the same time, cane is an extremely productive crop in terms of fermentables per hectare. Cane can yield 70–80 mt/ha with around 14 per cent fermentable sugars (including molasses), giving perhaps 10-11 tonnes of fermentables per hectare. Safrinha corn might yield 5-7 mt/ha, of which roughly 60 per cent is starch, giving 3–4 tonnes of fermentables per hectare.

So, in rough terms, cane can provide about three times as much fermentable material per hectare as Safrinha corn, implying strong CO₂ sequestration per hectare. The overall carbon balance depends on many factors (land‑use change, fertiliser, mechanisation, energy source at the plant), so I would be cautious about general claims that corn ethanol is more environmentally friendly than cane ethanol.

So, who wins: cane or corn?

Cane and corn each have distinct strengths. Corn has lower input requirements in the Safrinha system, can piggyback on soybean driven frontier expansion, and is a good fit for interior value added processing. Cane has very high yields, large fermentable output per hectare, and bagasse Basse’s energy during processing.

Even so, as I said, cane ethanol in Brazil costs about 30 per cent less to produce than sugarcane ethanol.

What does this mean for the sugar market going forward?

Corn ethanol production in Brazil is growing faster than the domestic ethanol market. This means corn ethanol is steadily gaining market share over cane ethanol because it is cheaper, unless corn prices rise.

 In this scenario, corn ethanol producers may push ethanol prices lower to gain market share, prompting cane mills to shift to sugar rather than follow ethanol prices down. This adds downward pressure on world sugar prices because more Brazilian sugar must be exported, potentially squeezing out higher‑cost exporters.

For most of my career, we thought of ethanol as providing a floor for sugar prices. Going forward, with corn ethanol undercutting cane, that relationship may change: mills may need to build more crystallisation capacity to avoid being trapped into selling ethanol in a market where their competitor has a big cost advantage.

In your projected scenario, Brazilian mills will no longer be able to compete in ethanol production and will switch to sugar. Brazil will export the surplus sugar, pushing down the world price and driving out less-efficient producers. Which producers will be driven out?

The impact will be strongest in countries where the world sugar price passes through to the farm‑gate cane or beet price, and farmers have viable alternative crops.

Examples could include Thailand, where farmers can grow cassava, rice, corn, and other crops. Lower sugar prices would may make it harder for millers to secure cane and trigger a gradual switch away from cane crops. The same may apply to other regions in Asia where labour constraints and limited mechanisation already undermine cane competitiveness.

Another example is the EU beet sector. Beet is grown in rotation with other crops, and EU protection has already been reduced, leaving the sector more vulnerable. In such regions, sustained lower prices will likely lead to a reduction in beet area rather than simply lower incomes.

Countries such as Australia, where there are fewer obvious alternatives in cane regions, may instead experience lower land values and grower incomes, but not necessarily large‑scale area abandonment.

Will the EU become a major importer?

In markets with large industrial sugar consumption – such as the EU – the supply chain for users is sophisticated and tightly managed. Factories need specific qualities of sugar. Deliveries are often just‑in‑time, in bulk or liquid form, sometimes multiple times per day, into silos managed with telemetry.

You can’t simply replace domestic production with bagged imports from the global market. To become a major importer, the EU would need a much larger refining and logistics industry to bridge the gap between raw sugar imports and industrial users’ requirements.

There is already a small refining sector, which serves as the conduit between world raw sugar and highly demanding customers. If domestic beet production falls further, the EU could import more, but this would require a structural transformation of the industry and logistics system rather than a simple switch from domestic beet to imported white raw sugar.

In general, sectors where farmers have alternative crops and where labour or mechanisation constraints are acute – notably in much of Asia – are likely to struggle most to maintain sugar production if Brazilian exports grow and prices weaken.

If I were an EU sugar producer and came to you to say I wanted to diversify by building a plant in another country, what would you tell me?

First, I would ask why you want to diversify within the sugar sector. Just because you produce beet sugar in Europe does not necessarily imply strong synergy with producing cane sugar in Brazil or elsewhere. Sugar markets tend to operate within their own regional orbits, with the main link being the world market for the traded share (30–35 per cent of global production). 

If you look at history, several sugar companies that have done well have used surplus cash flow from sugar to diversify into other food or consumer businesses rather than into sugar in other geographies.

Danisco and CSM are examples of European companies that successfully evolved beyond sugar businesses. British Sugar’s parent group invested in Primark, originally a small Irish retailer, using sugar profits to build it into one of the largest fast fashion retailers. It is now separating the agricultural business from the retail business to unlock value. 

In contrast, companies like Tate & Lyle, which once had sugar factories around the world, divested of its sugar operations and no longer produce sugar as a quoted company. The Tate & Lyle sugar brand is now owned by ASR.

My advice would be to question whether geographical diversification within sugar truly adds value, and to consider diversifying into other food or consumer sectors where your capital and competencies may yield better long‑term returns.

Thank you, Martin, for your time and input.

© Commodity Conversations®2026

A Conversation with Alex Eito

 Good morning, Alex, and welcome to Commodity Conversations. Please briefly describe your career so far and your current role.

I began my career at Cargill, a highly structured and demanding environment for learning the commodity business. From there, I moved through a few other trading firms, then into the financial sector just before the 2008 crisis and later established a hedge fund with some former Cargill colleagues. The hedge fund performed well operationally, but a major investor withdrew, so we returned all the money and closed it cleanly.

All those experiences have given me exposure to nearly the entire value chain: very large houses, mid-sized traders, and the financial aspects of commodities. I am naturally a generalist, so I’ve always preferred knowing a bit of everything rather than specialising intensely in a narrow niche. In this industry, curiosity is crucial.

Today, I work for Arasco in Riyadh, Saudi Arabia, as a Senior Vice President. I’m responsible for trading, shipping, procurement, pricing, and all aspects of buying, importing, distributing, and reselling raw materials domestically and regionally. We also co‑own five vessels in partnership with Bahri, the Saudi shipping company, so shipping is a significant part of my remit as well.

What does Arasco do in practical terms?

The core of Arasco’s business is animal feed, with corn milling as a secondary major activity. We have a port with approximately 450,000 tonnes of storage capacity, rail connections, and three plants: two feed mills and one corn mill. Arasco is also a major shareholder in a poultry business.

We also operate a vessel agency and an inspection company, import inputs, and utilise our assets and logistics network to redistribute commodities within Saudi Arabia. These include corn, soybean meal, sunflower meal, wheat bran, alfalfa, and other feed-related products. We are not involved in flour milling or oilseed crushing, so we concentrate on the feed sector rather than food staples like bread.

How is your trader’s experience assisting you in managing the current situation in the Middle East with your factories, mills, and distribution chains?

It helps me in two ways: international logistics and domestic distribution. Internationally, you must understand when to divert a vessel, how to renegotiate terms, what your insurance covers, and which routes involve certain risks. For example, choosing between time charters and voyage charters is partly an energy gamble: if you commit to a long voyage charter at the wrong time, you’re effectively taking a position in crude oil and bunkers. Occasionally, in volatile environments, time charters are safer because they minimise bunker exposure.

Domestically, trucking operates similarly to ocean freight. If security measures or congestion cause trucks to travel three or four times the usual distance, and loading or unloading is slower, your effective “local freight” cost per tonne increases because each truck makes fewer trips. Considering freight as “dollars per ton‑mile” or “per day’—rather than just a fixed number—helps you convert your shipping intuition into domestic logistics decisions. Originating and distributing are mirror images of the same challenge.

Are you noticing unexpected distortions in futures markets and spreads due to the Iran conflict?

The biggest distortions today are in the oilseed and vegetable oil complex, partly linked to the broader energy and biofuels story. A large share of vegetable oil production now goes into biodiesel, and higher crude oil prices create a kind of “war premium” across that complex. It’s hard to quantify precisely, but you can feel the froth when oil rallies and pulls vegetable oils and even corn (through ethanol) along with it.

We’ve also observed periods when the relative value of soybean oil compared to soymeal shifted so dramatically that the meal effectively became the byproduct rather than the primary product. This alters how crushers operate and how you consider margins. Some of this is driven by war and regional tensions, some by biofuel mandates, and some by broader energy market dynamics.

The conflict is pushing up fertiliser and other input costs. Could this lead to higher food prices and lower yields in the longer term?

The main factor is planting decisions and input application. Higher fertiliser prices may prompt farmers to reduce application rates or shift land away from fertiliser‑dependent crops like corn and, in some cases, wheat. That’s a double blow: higher per-unit costs and possible lower yields.

From what I hear, many US farmers are well covered with fertiliser for the current season, but there could be effects in Brazil and other regions where coverage is less complete. Lower application this year may reduce yields and influence what gets planted next year in South America. Will that justify a significant price move today? Probably not on its own, but over the medium term – six to eighteen months – it can tighten balances and support prices. In this environment, I would be cautious about taking large, long‑dated positions purely on this factor, whether long or short.

Should the Middle East be worried about possible food shortages?

It’s difficult to speak for the whole region because stocks and logistics differ greatly between countries, and I don’t have a detailed view of every stock level. What I can say is that, so far, I haven’t seen widespread, systemic shortages—more local shortages and logistical issues rather than factories having to shut down due to a lack of raw materials.

If the conflict endures and disrupts flows over a long period, you can certainly find yourself in a tighter situation. However, an important factor in this region is a degree of practical solidarity: companies and even competitors have been working together to keep supply chains functioning within economic limits. Prices and logistics costs have risen, yes, but there has also been a deliberate effort not to “kill” each other in a crisis. That matters.

Has the crisis elevated your importance within the organisation?

Regarding pricing and risk management, my background is very useful for analysing markets and developing balanced hedging strategies. However, it is a team effort in logistics, operations, and contingency planning. We have established a robust cross‑functional team to manage routing, freight, trucking, and plant supply.

The lesson from the Ukraine war is to be careful not to overreact in one direction. Many people were left wrong and with losses after initial price spikes because they extended too far on the assumption that tightness would last indefinitely. In crises, the challenge is to stay balanced: protect against real disruptions without betting everything on a single geopolitical scenario.

Going back to your career, you’ve traded many agricultural commodities. Which one do you prefer, and why?

Each commodity has its own character. Grains, oilseeds, sugar, coffee, cocoa – they all trade differently. Sugar used to be a “clubbier” business: smaller, with closer relationships and a very specific feature – it’s deliverable worldwide on a FOB basis, which fundamentally influences how you manage logistics, spreads, and risk.

Grains like corn and wheat are more about basis and premiums compared to Chicago. They generally require more physical assets, starting from farms, and the trade is more dispersed. Wheat is closer to a flat-price market, but with significant political and geopolitical factors, especially since Russia shifted from being a major wheat importer in the 1980s to the leading exporter today.

Personally, I’ve always liked grains and oilseeds, and to some extent, sugar. Coffee and cocoa are smaller, more granular markets in which destination stocks often influence dynamics. If your interest is in flat-price futures, grains may suit you better. If you prefer spread trading and delivery mechanics, sugar is fascinating.

 Which commodities have been the most challenging?

Wheat can be complex because of its political and geopolitical context. Policy decisions can change suddenly. Sugar presents a different challenge: it’s very relationship‑oriented, with mills and refiners you may have known personally for decades, and the deliverable contract makes spreads central.

The oilseed complex has become more policy-driven due to biofuels mandates, particularly biodiesel mandates. You now need to scrutinise energy policy and fuel markets nearly as much as crop reports, because soybean oil, rapeseed oil, and others are increasingly connected to diesel. That policy aspect has introduced an additional layer to what was once a simpler story of agricultural supply and demand.

Throughout your career, where did you earn most of your money – flat price, basis, spreads, or supply chain management?

Most of my P&L has come from flat price—mainly from getting the major directional moves roughly right. Even today at Arasco, where we are processors and physical traders rather than speculators, 70–80% of our price exposure is linked to futures. If you cannot interpret the flat-price market, it becomes very difficult to understand spreads and basis.

That said, each product has its own P&L ‘engine’. In sugar, because of the deliverable nature of the contract, spreads carry much of the basis risk; the flat price and spreads can lead or lag each other depending on the situation. In grains, basis, logistics and value-chain margins (origination, elevation, storage, freight) are much more important on the physical side. However, the fundamental building blocks – supply and demand, money flows, policy, and weather – remain the same across products.

Most successful traders talk more about their bad trades than their good ones. Can you share a bad trade and what you learned?

I’ve had many. Any trader who claims never to have lost money is lying. One recurring mistake has been hedging in the wrong futures contract – for example, hedging Russian wheat with Chicago futures. Over the long term, the relationship might hold, but in the short term, the basis can move violently, so you end up adding risk instead of reducing it.

The other major theme is timing. Many traders, including myself, are driven by fundamental analysis. We are often correct about the concept, but too early in our trades. A recent example was soybeans versus corn around 2022–23: we recognised that the bullish story was turning, and we were ultimately correct, but the change took six months longer than we expected. Being “right but early” can still lead to bankruptcy if you size your position aggressively and can’t withstand the downturn. 

Can you share three key lessons from your bad trades?

First, hedging instruments must truly match your underlying risk, not just look correlated on a chart.

Second, timing and position sizing can matter more than being fundamentally correct in the end.

Third, you learn far more from losses and near‑misses than from the trades where you just got lucky. 

Many see hedging as a method to lower risk, but could it raise risk?

Absolutely. A poorly designed hedge can double your risk. If you hedge a physical position with the wrong contract or rely on a cross-commodity hedge based solely on historical correlations, you could face losses twice – once on the physical and once on the hedge.

I recall a proposal from years ago to trade corn against coal because a back-test indicated a relationship. On paper, the correlation appeared strong. However, the underlying drivers were entirely different: coal at that time was mostly a captive, contract-driven market linked to freight, whereas corn is a global, liquid agricultural market. We did not proceed with the trade, and it was the correct decision. Historical correlation without understanding the underlying economics can be dangerous.

You’ve mentored many individuals. What do young traders find most difficult to understand?

Three things stand out. First, tunnel vision: young traders tend to focus very narrowly on “their” product and desk, and underestimate how interconnected markets are. Sometimes, the move in your commodity is caused by something that appears unrelated – energy policy, freight, a currency, or a regional political event. Learning to look beyond your immediate market is essential.

Second, many young people believe that because they graduated with top marks, they should sit at a desk and start making money on day one. They underestimate how much time must be spent on “boring” foundational work: understanding contracts, logistics, quality specifications, local practices, and simply listening. A lot of good trading involves long, quiet hours of analysing numbers, challenging your own views, and discussing ideas with colleagues and analysts before you ever “pull the trigger.’

Third, discipline is key.

Critical thinking is essential: questioning your own ideas, avoiding attachment to any position, and maintaining genuine curiosity. The emotional rush of executing a trade is the least important part of the process; the careful thought that comes before it is where real value is created.

How important are client and supplier relationships?

If you treat clients purely as P&L opportunities, you may make money in the short term, but you will lose in the medium term. You should treat clients as partners in the supply chain. That means being honest, explaining risks clearly, and sometimes advising them not to do a trade that looks profitable for you but is inappropriate for them.

I recall an options trader attempting to sell a complex exotic structure to a wheat mill that did not understand the embedded currency risk. Technically, it appeared as “protection,” but it was exposing them to something they could not see. I stepped in and said we shouldn’t sell that product to that client. We probably lost some immediate revenue, but in the long run, you gain trust – and those clients return.

When you decide to enter a position, what separates success from failure?

After timing, the crucial factor is position size. You must align the size of the trade with both the conviction and the expected magnitude of the move. If the potential move is, say, 5%, you should not bet the farm, even if you feel you are “right.”

In our hedge fund days, when all the stars aligned (tight supply, uncovered demand, funds positioned the wrong way, clear policy or weather catalyst), we allowed larger positions because the risk‑reward was asymmetric. When the trade was more of a feeling or a tactical idea, we would still trade, but with much smaller size.

One example was a Minneapolis versus Chicago wheat spread in the mid‑2000s. High‑protein wheat had a supply problem, funds were short, and demand was very hand‑to‑mouth. We put on a relative‑value trade that worked extremely well. But even there, we had to respect the thin liquidity in Minneapolis – you cannot ignore market depth, or you become the market and expose yourself in a different way.

Are you more of a physical trader or a futures trader?

I enjoy both. The significant swings in P&L usually stem from futures and flat price if your predictions are correct, but physical trading offers its own benefits. In grains and oilseeds, the physical margin often derives from the value chain: origination, elevation, storage, financing, freight, and sometimes solutions such as bundled fertiliser or pre-financing for farmers. It’s more operationally demanding and requires a larger cost base, but it’s a rewarding field.

Futures trading has become more accessible because high‑quality data is more available and often free, compared with the 1980s, when much of the information was hidden or proprietary. However, flat‑price and spread trading are also much riskier and more competitive. You need to be honest with yourself about your risk appetite and psychological profile.

In some trading houses, recruits rotate through operations, finance and middle office before trading. At Cargill, many were put straight onto a desk. What’s the best approach for a young person?

I don’t know exactly how Cargill manages its graduate schemes today, but I am convinced that good physical traders must have a thorough understanding of contracts and logistics. In my case, I started in a middle‑office role, then handled execution and operations for a while, and only later moved into trading. That experience has been invaluable.

You truly understand the significance of contracts and logistics when unforeseen issues arise: a vessel stranded at anchorage, force majeure, a port accident, or a quality dispute. During the current tensions in the Middle East, for instance, managing routing, demurrage, insurance, bunkers, and draft restrictions becomes vital. If you have never worked in operations, you might not fully grasp the risks involved when signing a contract or agreeing to a freight deal.

You’ve recruited many people over your career. What do you look for in a young trader?

Early in my career, I concentrated on technical questions – maths, economics, market knowledge – and soon realised that many graduates knew more theory than I did. Over time, I shifted my focus to character, personality, and how someone fits into a team. I care much more about honesty, curiosity, and critical thinking than about whether someone can recite a pricing formula.

I often ask candidates about the biggest problem they’ve faced in life and how they solved it. I don’t need a trading story; I want to see how they react under pressure and how they deal with people.

Does background or nationality matter? Why, for instance, are there so many talented Argentinian traders?

I believe experiencing economic instability shapes your attitude towards risk. People from countries with repeated crises – Argentina being one example – develop a kind of survival instinct and adaptability that can be very valuable in trading. They are accustomed to uncertainty and improvisation.

That doesn’t mean people from stable, developed economies cannot be great traders. You find excellent traders in the UK, the Netherlands, Russia, China, and everywhere else. But I do notice that individuals who have personally put some of their own money at risk early in life – buying a few shares, starting a small venture, exposed to financial crisis, playing competitive sports – tend to have a more realistic, less academic relationship with risk. They know what it feels like to win and lose.

What final advice would you give to a young person considering a career in commodity trading, especially now?

Think of trading as a puzzle where you never have all the pieces. The pieces you do have are constantly shifting, appearing and disappearing. You need some basic maths, of course, but not a PhD. What you really require is curiosity, critical thinking, and a willingness to accept uncertainty.

Be prepared for a lifestyle that isn’t only about sleek offices and business‑class flights. This career can take you to wonderful destinations, but also to ports and regions experiencing political unrest, guerrilla conflicts, or economic crises. At times, it can be risky and uncomfortable. If a peaceful private banking life is your goal, this is not the right profession.

On the positive side, trading introduces you to many cultures, religions, and ways of thinking. That makes you more tolerant and broader‑minded over time. It pays well if you perform well, but more importantly, it expands your mind and character in ways few other jobs do. If you are curious, adventurous, and honest with yourself, it can be an incredibly rewarding career.

Thank you, Alex, for your time and input.

© Commodity Conversations® 2026

A Conversation with Kiran Wadhwana

Kiran Wadhwana has been a good friend throughout my career in sugar. He has experienced 41 Indian crop seasons and worked in farming, milling, trading, and exports. I wanted to talk with Kiran about the Indian crop and ask whether the Iranian situation was affecting the sector.

“We started the year with about 5 million tonnes of opening stocks and expect to produce around 28.5 million tonnes,” Kiran tells me. Based on that production, he anticipates 2.5–3 million tonnes of sugar will be converted into ethanol, domestic sugar consumption to be “close to last year’s 28.1 million tonnes,” and exports between 500,000 and 700,000 tonnes. “That implies closing stocks slightly above 4.5 million tonnes,” he says.

On paper, those figures indicate “a steady, almost uneventful market.” In reality, the balance sheet is so tight that any policy shock or logistical disruption can swiftly turn India from a surplus to a deficit. If weather conditions or water allocations reduce cane in Maharashtra or Karnataka, or if more cane is diverted to ethanol, the scope for comfortable exports will diminish.

Cane is no longer automatically the most attractive crop, Kiran continues. “It must compete with grains that offer 3–4-month rotations and quicker cash flow. With the government consistently increasing support prices for other crops, a farmer who can undertake two or three grain rotations may earn as much or more than he would from cane.”

Kiran explains that India’s ethanol programme “adds another layer of complexity—and opportunity.”

Mills and distilleries can produce ethanol from three cane‑based routes—juice, B‑heavy molasses, and C‑molasses—and from grain, mainly corn and broken rice.

Today, we have six different prices for ethanol,” Kiran notes. “We’re probably the only country in the world where you have different prices for ethanol depending on whether you produce it from corn, cane, juice, or molasses.”

At the blending level, “India already has a 20 per cent blend. We don’t have any flex-fuel cars, and standards for 22, 25, and 27 per cent blends are still being finalised.” Widespread adoption of flex-fuel vehicles would require “a clear price advantage at the pump—if a buyer has to buy ethanol at the same price as petrol, then why should he bother?”

Looking ahead, Kiran says, “You might find a situation where the government wants to increase ethanol production. It’ll turn around and set a high price for ethanol, and say, okay, this is the final price for any ethanol, no matter where you produce it from.” That would link ethanol prices more explicitly to crude oil and make the fuel programme more vulnerable to global energy shocks.

Talking about global energy shocks,” I inquire, “how is the war in Iran impacting the situation, particularly exports?”

“India’s exports account for less than two per cent of the world’s sugar trade,” Kiran replies, yet “its impact on world prices is outsized because India’s exports are unpredictable. Brazil and Thailand hedge and sell forward; the market knows what’s coming. In India, we often do not know until days before whether the government will grant export quotas or prioritise ethanol and domestic supply.”

Even in a typical year, “when a 2–3‑million‑tonne export quota is suddenly announced and shipped over a few months into a market that is only marginally in surplus, it can depress futures prices. When traders have been expecting exports, and they do not materialise, prices can rally sharply.”

“What is the current situation?” I ask. “Is the domestic price in India above the world sugar price?”

“India’s LQWs (Low Quality Whites) can sell at about $440 to $445 per tonne FOB,” Kiran tells me.

Exports made little sense last month as London futures were trading at $400 to $410 per tonne,” Kiran continues. “But the world price for whites has started rising because Middle Eastern refineries will not be able to deliver. With London back up to $450 per tonne, exports are beginning to look viable. The rupee has also weakened, so we can start closing at $440 per tonne. Our domestic price remains weak. March is the year-end, and mills don’t want to hold stocks; they prefer to sell.

Source: Barchart

“I don’t think the Iranian situation will impact our exports,” Kiran continues. “It is curtailing the flow to Jebel Ali, the sugar that then moves on to Iran and into Afghanistan. That’s not happening, but Sri Lanka has opened up. The Iranian situation has made sugar from Brazil or the EU to Sri Lanka more expensive due to rising freight rates, and Indian sugar is now competitive. The same applies to East Africa.

“We don’t have a large amount of sugar to export,” Kiran adds. “We’ve exported 310,000 tonnes so far, by the end of February or early March, and I believe we’ll finish at around 600,000 tonnes. So, bits and pieces, because Sri Lanka needs about 40-50,000 every month, which they’ll probably buy from India.”

Bangladesh currently does not import sugar from India due to the political situation between the two countries. “Their refineries import Brazilian raws,” Kiran tells me. “Brazilian ships will go to Bangladesh. I think that’s not going to be an issue.”

In the long term, the Iranian war could alter the type of sugar that Indian mills produce. “Many mills in the north have shifted to producing refined sugar rather than LQWs,” Kiran notes. “We probably have more than 50 or 60 mills that can produce refined sugar now.”

There are two reasons for this. First, “as more food processing industries develop in India, a market is emerging that offers a slightly better premium.” Second, and more surprisingly, the cost calculation has reversed.

Today, if you take cane and produce refined sugar, the operating costs are cheaper than producing non‑refined sugar, which was not the case a few years ago. This is mainly because the price of sulphur has skyrocketed. You use sulphur to make non-refined sugar.

With sulphur expensive and sometimes difficult to obtain, mills find that “producing refined sugar from cane is cheaper than producing Low-Quality Whites (LQWs), in terms of chemicals and recoveries.” Kiran estimates that “out of the 28 million plus we produce, maybe 7 million is refined sugar,” and expects that “within the next 2 or 3 years, you’ll see almost 10 million tonne will be refined.”

This is an AI-generated chart. I cannot guarantee its accuracy and include it only for illustration purposes.

If sulphur and related inputs rise alongside oil, the incentive to shift further into refined whites increases, but so do the absolute production costs. For exporters, this means higher minimum prices to cover costs, just as freight and insurance to key Middle Eastern buyers are becoming more expensive.

Domestically, mills are unable to pass these cost increases on. “The government technically controls everything,” Kiran says, “from the cane price to the sugar price, to the amount of sugar you can sell, the amount you can export. Everything is pretty much controlled.”

The main issue is that India is “the only country in the world where there is no linkage between sugar and sugarcane prices.” When cane prices are raised, but sugar prices are not, “mills struggle to pay farmers on time, and cane arrears increase.”

Kiran also wonders whether higher oil prices will prompt the Indian government to speed up the country’s domestic ethanol programme, increasing the 20 per cent blend more quickly than planned or modifying the current multi-tiered pricing structure that depends on the feedstock.

“Probably next year, we’ll increase the blend to 22 per cent,” he tells me. ‘Then, in a couple of years, we’ll do 25 per cent, and by 2030, we’ll do 27 per cent. I think that’s the roadmap we’re looking at in India.”

Kiran concludes that in a year where “we started with about 5 million tonnes of opening stocks” and expect 28.5 million tonnes of production, with 2.5–3 million tonnes going to ethanol and closing stocks “slightly above 4.5 million tonnes,” there is little slack in the system if either policy or geopolitics go wrong.

© Commodity Conversations® 2026

Good afternoon, Sam, and welcome to Commodity Conversations. You’ve just published The Physical Trade as a definitive guide to physical commodity trading. When you imagine your ideal reader, who do you have in mind, and what problem are you aiming to solve?

The catalyst for the book was the number of students, graduates, and career changers who asked me how to break into what is still a very opaque industry. Information is hard to come by unless you already work in it.

My target audience is people seeking a broad understanding of physical commodities, whether out of genuine interest or to pursue a career in the industry. I also aim to support those already involved who feel uncomfortable asking “basic” questions internally or lack access to other departments.

The industry is highly nuanced and divided into silos. If you work in operations, you might never have meaningful time with finance or risk teams. I aimed to provide a practical, accessible guide that offers people the context they often lack in their daily roles.

What qualifies you to write this book? Share a bit of your experience.

I graduated in 2008 with a degree in economics and joined Trafigura when it was still relatively young. I began in operations/middle office, working closely with finance, accounting, and risk, and sitting next to the front office. It was a tough but valuable learning experience across the entire trading chain.

After two years in operations, I moved to the hedging desk, where I managed risk across products and geographies. Later, I became a physical trader, running the refined metals book for North and then South America, with exposure to Trafigura’s global book.​

After 11 years in physical trading, I transitioned to derivatives at Greenwich Metals, where I established an entire derivatives desk from the ground up: credit lines, broker lines, internal brokerage, and proprietary trading. I have always taught internally; both my parents were teachers, so teaching came naturally.

My first book, Perfectly Hedged, arose from a lack of practical material on risk management. Building on that, I launched Perfectly Hedged, a consultancy and education platform, in November 2023. Over the past two years, I have worked with companies across the commodity complex and seen firsthand how many people possess deep specialist knowledge but lack the broader understanding necessary to truly add value to their desks. In total, I have around 15 years of direct trading experience, plus 2 years working closely with firms on training and risk management.

Do you offer training courses for these companies?

Yes. Everything we do is tailored to the company’s needs. We run in-house courses, have an on-demand online platform, and design programmes on risk, physical trading, and desk-building, as well as ongoing upskilling for staff.

I deliver all the content myself. I have a small team that supports marketing and back‑office functions.​

How old are you, and what is your background?

I’m 38 and was born in London, where I lived for 21 years. I then moved to Switzerland with Trafigura for about 18 months before relocating to the US, where I’m still based, in Stamford, Connecticut. Stamford and the surrounding suburbs have become a major centre for commodity trading and hedge funds over the last 20 years.

What do you hope a reader will learn from the book that will make their first five years in commodities different from yours?

When I started, it was very much sink-or-swim; you had to push hard to learn anything beyond your narrow job description. The main thing I want readers to understand is how interconnected every department is in a physical trading house: finance, accounting, risk, business development, ESG, compliance – all of it feeds into the trade.

If you don’t understand each element, it’s difficult to see the complete flow of a physical trade. I want people to begin their careers able to ask second- and third-tier questions, not just “What’s the difference between a container ship and a bulker?” but “Why are we using this vessel – cost, risk, optionality?”

Suppose you were graduating today with no contacts and no family in the business. What should someone do in the next 12 months to secure a role in physical commodities?

Relationships are everything. If you can’t build them, your career will be short. You need the confidence to reach out cold: messages, emails, LinkedIn, asking for a five-minute call or coffee to learn about the business.

Graduate schemes are competitive, attracting tens of thousands of applications. Early in your career, you should be commodity-agnostic: the “best” desk is the one that offers you a chance, whether that’s in metals, oil, ags, or another area.

Cast the net widely and apply across different regions. Be open to back or middle-office roles and offer to shadow desks; request informational interviews.

No one should expect to step straight into a front-office trading role, nor should they want to. You should want to learn from the ground up. It’s a numbers game: apply widely, develop your soft skills and interpersonal skills, and be prepared to add value from day one once you secure a seat.

What are the key skills a commodity recruiter seeks?

Recruiters want everything – but if I had to choose, I’d prioritise social skills. I’ve interviewed top-tier graduates with perfect grades who freeze when faced with messy, real-world scenarios because there isn’t a neat, provable answer.

A trader’s day is full of setbacks. You must think quickly, adapt, and communicate under pressure. Strong numerical skills are important, but being able to have an informed, opinionated discussion about markets and the industry is often more valuable in an interview than solving another equation.

You advise in the book not to fixate on a trading seat on day one. Which early roles – operations, scheduling, middle office, risk, logistics – are the best routes into trading?

From my perspective, a middle-office operations or scheduling role, particularly on the energy side, is ideal. It provides exposure to back-office processes, risk management, and the front office, often working directly alongside traders.

You learn the structure and economics of trades by osmosis and see how logistics and operations directly impact P&L. There is no better way to understand how a physical trade works than to sit in those roles early on.​

Imagine you’re in one of those roles. What will make you stand out to your manager as potential trader material?

Ask a lot of questions without becoming annoying. Be a sponge. Don’t just execute tasks; ask why you’re doing them – why that vessel, that pricing date, that counterparty.​

Managers and commercial teams notice individuals who seek to understand the trade rather than merely process the paperwork. These are the people who stand out as future traders.

How can you transition from operations to trading?

Much of it relies on seizing opportunities as they arise. There is always an element of luck, timing, and being in the right place – but you must be ready to say yes.

When I was tapped on the shoulder and offered the chance to move to the US at 22 , I quickly accepted. Being willing to relocate, take on projects, act as a liaison between desks – essentially volunteering for value-added work beyond your job description – is what gets you noticed.

Digging deeper, why did the head of the trading desk select you rather than the other people in operations?

I’d been open about my commercial aspirations while making it clear I understood it was a long road. Some people push for a trading seat too early, don’t fully understand the business, and then struggle.​

Be open about your desire to trade but also demonstrate your commitment to learning—whether that means sitting in on different roles, collaborating with other departments, or even relocating if necessary. Developing strong internal relationships with treasury, finance, accounts, and risk is vital.

When your manager asks those teams, “What’s it like working with Sam?” you want consistently positive feedback. In physical trading, you’re better off being the most likeable person in the room rather than trying to be the smartest; interpersonal relationships drive a significant part of the business.

Was there one experience that shifted your perspective on risk and markets?

Yes. Early in my trading career, we realised we were dealing with a fake bill of lading, which I describe in the book. It was only a few months into my trading role, and it highlighted how one document error could cascade through the entire physical and derivatives chain.

Because we didn’t have proper title, we shouldn’t have priced the contract, which exposed us to our end customer and to price risk. It reinforced that “attention to detail” is not a throwaway CV line; in physical trading, you really do need to dot every i and cross every t and be proactive rather than reactive.​

Many people start as physical traders but want to move to hedge funds. You spent time trading derivatives. Did you enjoy it?

I enjoyed it a lot, but you need a specific mindset. You must almost be emotionless about trades, which is very different from the relationship-driven physical side.

Derivatives are faster and more volatile: a physical deal can take months to put together and last for years, whereas a speculative derivatives trade can be opened and stopped out in minutes. Waking up at 4 a.m. to check prices and having your mood set by your P&L takes getting used to.​

I had success, and I didn’t leave derivative trading because I fell out of love with it. I left to build something from scratch – Perfectly Hedged – after a “if not now, when?” moment, while still leveraging the same relationships on the consulting and education side.​

If you were to create a three-year “apprenticeship” programme for an aspiring physical trader, what should they concentrate on during years 1, 2, and 3?

I’d begin them in middle office, operations, or logistics to gain in-depth exposure to the physical flow: shipments, finance, back office, accounts, and treasury. Understanding how cargoes move and how cash and documents flow is fundamental.

Then I’d have them spend at least a year on the hedge desk, executing derivative hedges and managing risk for those physical books. When you later structure your own physical contracts, having seen the risk management side up close gives you a significant advantage.

Two years in operations, plus a year on the hedge desk, positions you well to become a physical trader.

What about finance?

Finance is extremely important. You can learn a lot from operations, but a dedicated period in finance – working with LCs, repos, revolvers, borrowing bases, and specific funding structures – provides you with an extra advantage.

If someone spent two years in operations, one year in finance, and then one year on the hedge desk, they would probably begin their trading career with an advantage over someone who only had experience in operations and hedging.

Imagine I’m the Trading Desk Manager. How can I tell if you’re ready to become a trader?

You never know for sure until you give someone risk. People behave differently once they’re directly responsible for P&L.​

But you can look for signs. Do they ask inquisitive “why” questions? Do they understand the P&L impact of everyday decisions? Can they think through alternative scenarios if things go wrong?​

When I interview, even for non-front-office roles, I ask scenario questions: vessel delays, pricing failures, operational errors. The way candidates think through implications and responses reveals a lot about whether they “have it.”

Some companies organise a trading weekend with stress tests to help determine if someone is ready to become a trader. Do you think they are a good idea?

Several firms use trading games and simulations. Trafigura’s Trader Development Programme (formerly the Junior Trader Programme) runs two days of trading exercises, with senior traders placing candidates in scenarios and monitoring their P&L throughout, then ranking them.

When we recruited for the deals desk at Trafigura, we would present candidates with a pricing screen alongside two phones and challenge them to handle live pricing orders and market movements. Their task was to monitor everything, return calls with fills and stops, and manage the chaos.

These exercises sometimes exaggerate reality, but they are helpful for understanding how people manage stress – and for candidates to determine if they genuinely enjoy that environment. If you don’t enjoy trading, you won’t succeed at it.

Commodity trading is intense and highly competitive. Is that a message you want readers to take away – that it’s not suitable for everyone?

Yes. Commodity trading is extremely high-pressure.​

It is also highly competitive. When you get a front‑office seat, you’re given a very short leash and a lot of capital. You must respect that capital and deliver, because capital is scarce and can always be reallocated to another desk – oil, power, metals, freight – if you can’t prove you can use it well.​

In your book, you warn that rushing into a trading role too quickly can cut a career short. Could you explain that to us?

The global commodities world is small. Reputations travel quickly.​

If you thrust yourself into a trading role before you’re truly prepared and either blow up or consistently underperform, it becomes difficult to transition to another trading seat. When I see CVs with six months in one trading role and a year in another, I begin to question patterns.

That person may simply have been in the wrong place, but if it occurs multiple times, it indicates they’re missing something essential. Taking extra time to understand all parts of the business and the responsibilities of a front-office position increases your chances of a 10-, 20-, or 30-year trading career, rather than a brief, painful stint.

Finally, if a young graduate finishes The Physical Trade and emails you: “What should I actually do next, this week?” – how do you respond?

First, I hope that occurs; it’s a fascinating industry, especially during the energy transition, and I want the book to inspire people. Historically, many graduates entered investment banking; now more are considering commodities.

My advice is to immerse yourself in the industry: trade flows, supply and demand, macro themes. In interviews, you don’t need the next great trade idea, but you must be able to articulate a thoughtful opinion – for example, on copper’s role in AI or EVs, or on how EV demand trends affect metals. That doesn’t come from headlines; it comes from sustained reading and following people and publications.

You will face a lot of rejection, but you only need one yes. Once you have an opportunity, seize it with both hands: ask questions, build relationships, and make yourself indispensable. Be flexible on commodity and location; take any decent seat you can and then shine in it.

Is there any message you want to convey that we haven’t discussed – about your book or the industry?

The commodity trading sector has not been very open. I speak with many students and new entrants who ask the same basic question: “Where can I learn more?”​

We compete with hedge funds, banks, and other sectors for top talent, yet there is relatively little accessible information about what we do.

My message to the industry is to be more transparent, organise more events, and do more outreach.

My message to students and graduates is to be proactive, go out of your way to build knowledge, and don’t wait for the industry to come to you.

Thank you, Sam, for your time and input. I wish you every success with the book.

The Physical Trade – A Definitive Guide To Physical Commodity Trading is available on Amazon

© Commodity Conversations® 2026

A Conversation with Artem Lisovskiy

Regular readers will know that I plan to run a series of interviews highlighting how regional champions are eroding the market share of the ABCD++ group of agricommodity trading companies. I also plan a series of interviews to help me update my sugar book. However, as the Brazilians like to say, “If you want to make God laugh, tell him you have a plan.”

I have happily been diverted into a new area for me: trade finance. I was curious about how digitalisation, through stablecoins and tokens, could improve payment systems and attract new investors to the sector. During my recent conversation with Rémi Burdairon, it resonated when Rémi mentioned that finance is now the most valuable commodity.

I discussed it with my son, who suggested I speak to Artem Lisovskiy, a former Glencore colleague of his who recently founded TradeOn, a hybrid operation aiming to sit at the intersection of trading, trade finance, and supply chain partnerships.

I arranged to meet Artem for lunch in Geneva, and he left it up to me to select the restaurant. Using TripAdvisor, I chose a Lebanese eatery near the station. It had excellent reviews, but it turned out to be a takeaway kebab place. We found a table at the back, next to the toilets. Artem looked out of place in his business attire, but he bravely stuck with it.

Artem began his career at Glencore as a junior operator, then became an analyst, followed by a risk manager, and ultimately a trader. In an environment where IT and systems were still relatively basic, he learned to do everything manually: drafting contracts from templates, managing positions in spreadsheets, and building S&Ds from scratch.

He told me that it was this extensive grounding that gave him the confidence to establish his own platform: he understood every part of the chain because he had experienced it himself. Coming from energy trading, he also had exposure to one of the most structurally complex markets, which made subsequent transitions into metals and agriculture easier.

We discussed how working for a well-known company at the beginning of your career gives you a head start for the rest of your career, and how I always advise young people to try to overcome the obstacles to join one.

Artem wasn’t sure he agreed with me. “A major house gives you exposure to multiple geographies, flows, and risk frameworks,” he told me, “But the path can be longer and more complex. A smaller shop has lower barriers to entry and can shorten the path to a trading seat.

“You are in a hurry when you are in your twenties,” Artem told me. “You want to become a trader straight away. It’s only later that you realise that the “slow” years in operations, risk, or analytics are exactly what allow you to manage risk properly when it really matters.”

After Glencore, Artem briefly transitioned to a copper producer to help establish its trading operations, before reconnecting in 2023 with two former Glencore colleagues, Andreas Laskaratos and Sebastian Willems, who had founded AB Commodities as an energy trader in Monaco.

Artem told me that he didn’t want to go straight back into energy trading; instead, he aimed to focus on trade finance. Earlier in his career, he had developed flows where 80–90% of the business economics depended on offering deferred payment terms; without embedded financing, those trades could not exist.

That experience prompted a straightforward question when he founded TradeOn: “Can you separate trade finance from trading and manage it with a trader’s mindset rather than a banker’s?”

Artem admitted that the answer proved to be “only up to a point”.

“To manage risk effectively,” he told me, “You need to be engaged in the trade, in the market, and stay close to the flows. We are a hybrid model: we participate in the physical supply chain as a repo provider or principal, provide structured trade finance, and advise on risk management.

“We focus on owning and controlling the underlying goods, rather than lending against a balance sheet. We can do this through traditional repos, where we hold title to the commodity. We can also act as a principal between two trading firms.”

Artem added that he wants to position TradeOn more as a trading house than a bank, with operators who understand commodity specs and market liquidity, and who actively mark commodities to market.

I asked him if fraud was a concern, but he replied that it is often more evident in large, complex organisations than in smaller family-owned ones that rely on their reputation. “No one is immune to fraud,” he told me. “But layering multiple controls instead of chasing a single ‘silver bullet’ is the only realistic defence.”

The big banks have largely withdrawn from funding smaller to medium-sized commodity traders, citing that compliance and onboarding costs are not justifiable. I asked Artem how he navigates that challenge.

“We are not doing anything magical,” he replied. “Due diligence is due diligence, right? However, we aim to take the best from the banking and trading worlds. We combine the expertise from both sides internally. The banks have extensive infrastructure, and when they onboard a counterparty, they must achieve a minimum ROI to justify the compliance work. However, I can’t say there is anything we do that they don’t, or vice versa.

“Our relationship with AB Commodities is beneficial here,” he continued. “Being a wholly owned subsidiary boosts our credibility with banks, as well as providing access to existing relationships that can be utilised to enhance our own financing capacity.

“We are also looking at the broader spectra. I have always felt that trade finance is a valuable asset for investors. It’s short-term, it’s super liquid.”

“How would that work?” I asked.

“The structure could be as straightforward as a risk participation framework agreement where investors partake in selected transactions,” he replied. “An investor can choose, based on their risk appetite, the commodities and markets they are comfortable with. Their risk is confined to these specific transactions, and liquidity is tested at the end of each cycle, which is, you know, 30 to 90 days. The idea is that you have a revolving pipeline.”

We had both finished our kebabs and ordered coffee. I wanted to proceed to the core of our conversation: stablecoins and tokens. As I mentioned earlier, I see stablecoins as a simpler payment method than the traditional banking system, and tokens as a route for new investors in the sector. However, my son had warned me that Artem was not a fan.

“I never said I’m not a fan of them,” he corrected me. “I just think digitalisation isn’t a solution to everything. If it were, the flows would have been digitalised long ago. There have been so many attempts to do this, but none have succeeded.

“Stablecoins can be a great platform rail for payments,” he continued, “especially in countries where liquidity issues arise, and you sometimes must wait 3-4 days for payments to hit your account. Stablecoins can make the payment process smoother, quicker, and more efficient. They offer a structural upgrade. It’s the direction in which everyone is heading.

“In terms of tokenisation, the commodities industry relies on expertise and trust. Moving into the digital space does not replace either. Having a digital warehouse receipt doesn’t mean the goods it represents match in quantity or quality. Commodities are all about specifications. When you do risk management, you must use all the tools available to you. Is there one tool that replaces all the others? No.

“Imagine you have two warehouses,” he continued. “One is a reputable facility owned by a large multinational, and the other is a small, locally owned warehouse. Both issue a holding certificate for the same goods. Would you consider those certificates equal from a financing or risk perspective? Probably not, since the issuer’s credibility matters.

“The same logic applies to tokenisation. If a trusted institution, such as a large, well-established infrastructure provider, supports the system, then whether the claim is represented by a digital token or a traditional warehouse receipt becomes less significant. What ultimately matters is who is responsible for the underlying asset. In the end, it’s really a question of trust in the institution behind it.”

“In his interview,” I asked, “Rémi told me that finance is the most valuable commodity, but what you’re saying is that trust is even more valuable; is that correct?”

“You must have trust before you have finance,” Artem replied. “But I cannot disagree with him. As a trader, you have to offer a deferred payment term to make a sale. You must make prepayments to secure supply. But it all comes down to trust. Commodities are a small market; everyone knows each other. You have one chance, and the moment you cross that line, you lose the trust of the market, and no structure, no token, and no algorithm will bring it back. You will not be able to transact again.”

Artem established TradeOn in May 2025. I inquired how it was progressing.

“It has been a steep learning curve,” he admitted. “But we’re moving in the right direction. In agricommodities, we have done inventory finance in Eastern Europe and are financing export flows from Latin America to Europe. In metals, we have financed some ores from South Africa. There are plenty of opportunities out there.

“Obviously, like any founder, I suppose I want things to move much quicker, but I recognise that rushing without establishing proper processes can lead to problems. We need to ensure we have the right infrastructure and systems in place and manage them well. However, we’ve been expanding the team, which I am very pleased about. We’ve successfully attracted the talent we desired.

“We have a trader joining us from ADM to develop the agri book further,” he added. “It is important to have expertise in all the commodities that we’re involved in.”

I had reached my final question. “What’s the dream?” I asked.

“My dream is to continue and operate in the physical commodity space,” he replied. “Physical goods impress me. I love it when you can feel, touch, and see your commodity.

“We aim to expand our structured finance offering and collaborate closely with a select few companies, helping them develop their businesses. I also see us forming supply chain partnerships on the trading side. The biggest dream is, of course, to secure enough finance to realise our ambitions.”

As Artem kindly paid the bill, I asked him if he had any questions for me.

“Yes, I do,” he replied. “As I mentioned earlier, I’m aiming to position the company at the intersection between trading and trade finance. What should I call myself?”

His question didn’t catch me off guard; I had already spent most of our lunch trying to assign a name to the hybrid entity he was creating.

“You’re not a trader,” I told him. “You’re a merchandiser – a merchant. There’s a big difference.”

“What’s the difference?”

“A trader is a guy sitting in front of a screen, speculating on time spreads, basis, premiums, and flat price,” I replied. “A merchant is someone who sails to the Spice Islands, buys the spices, brings them back, and sells them.”

“We would also like to be a supply chain partner to the merchants buying the spices,” Artem told me as we left the restaurant.

“Sounds good to me!” I replied.

The next day, I received an email asking for my feedback on the restaurant. I couldn’t respond because I hadn’t paid attention to the food. I had no idea what I had eaten. But isn’t that a sign of a good business lunch? The conversation is always more important than the food or the surroundings.

© Commodity Conversations® 2026