The ruthless underbelly of commodities
A new book shines light on the guarded and monstrously lucrative world of raw materials trading.
For my money, the frontrunner for business book of the year is The World for Sale: Money, Power, and the Traders Who Barter the Earth's Resources. If you want to know the forces governing geopolitics and business this is the book to read. Over 400-odd pages, journalists Javier Blas and Jack Farchy traverse the globe to reveal how a tiny cabal of alpha males move—and pocket—astronomical sums of money by trading the earth’s raw materials, from the oil that fuels our cars to the metals used in our smartphones. Rules are bent, “commissions” are paid, and staggering bets are placed on the movement of prices for oil, wheat, metal and almost any other raw material you can think of.
Behind it all is a brilliantly slippery cast of characters—from the cunning forerunner Marc Rich to his combative successor and Glencore chief Ivan Glasenberg. They are, in the words of one academic, the visible manifestation of Adam Smith’s invisible hand—and characters who wouldn’t be out of place in an Ian Fleming novel. “They are the last swashbucklers of global capitalism,” write Blas and Farchy, “willing to do business where other companies don’t dare set foot, thriving through a mixture of ruthlessness and personal charm.”
And despite the vast sums and quantities, what’s perhaps most staggering is the reality that so much power and influence is concentrated among so few people. “The five largest oil trading houses handle 24 million barrels a day of crude and refined products, such as gasoline and jet fuel, equivalent to almost a quarter of the world’s petroleum demand. The seven leading agricultural traders handle just under half the world’s grains and oilseeds. Glencore, the largest metals trader, accounts for a third of the world’s supply of cobalt, a crucial raw material for electric vehicles. But even those numbers understate the traders’ role: as the fastest and most aggressive participants in the market, it is often their trades that set the price.”
The five largest oil trading houses handle 24 million barrels a day of crude and refined products, writes Javier Blas and Jack Farchy in The World for Sale.
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