This book traces the history of commodity trading houses over the last sixty years, from their births to their hands placed on the world trade of oil, cereals and metals in the most remote areas of the planet, where power and money mix.
The first part of this book explains how the pioneers of oil trading (Philipp Brothers, then Marc Rich & Co, and finally Glencore) supplanted the 7 major oil companies (including Exxon, BP, Shell, etc.) in terms of trading black gold, by putting oil in the wheels in countries like Russia and others. And the second part of the book, to understand the interactions between countries in Africa and South America, to help support global economic development. A modern world, where the market is king and where multinationals seem to be able to free themselves from any attempt at regulation.
Clearly, the author explains that commodity traders, with their actions, have transformed the world economic order, participating in the disintegration of the oligopolies that previously controlled many markets. While the trading houses based in Switzerland (canton of Zug) were able to develop in the greatest discretion, acting in relation with heads of state producing energy and mineral wealth, the latter were caught up by American institutions to stop practices that are often unspeakable. Moreover, while China, since its entry into the WTO, has been the main catalyst for the demand for raw materials on the planet, the trading house landscape has begun to change since its economic slowdown. The latter must address the following three constraints: the United States/China trade war (2018), climate change (electricity), the arrival of Chinese competition developing its own trading structures; without forgetting transparency, a key element of the 21st century. In the end, an interesting book to read for anyone working in the commodity trade or being an analyst in the finance sector. Because without commodity trading, there is no economic development or monetary stability.
Javier Blas is a columnist at Bloomberg Opinion covering energy and commodity issues from London. Jack Farchy is a senior reporter specializing in natural resources at Bloomberg News.
Reading notes by Claude Georgelet
