Glencore agriculture trading director Chris Mahoney sparked a storm of anger when he described the current grain crisis as being good for his business. The high prices, market volatility and dislocation that Mahoney expects to exploit for corporate profits spell misery, hunger and starvation in the rest of the world.
Even the British government was critical of this public display of greed. Parliamentary Under Secretary of State for International Development, Stephen O’Brien, delivered a generalised assurance that the UK government was “…investing in safety nets that deliver food and cash to the poorest.”
Earlier this month, Oxfam International executive director Jeremy Hobbs wrote that traders “…should be held accountable…” for the inordinate power that they wield over the grain prices that line their pockets. His words accompanied the NGO’s publication of Cereal Secrets: The world’s largest grain traders and global agriculture, which explains how ommodity traders (known collectively as ABCDs, after the biggest four groups) have gained a stranglehold on the market through making it a narrowly financial exercise.
When looking at the profits of Archer Daniels Midland (ADM), Bunge, Cargill in the graph pictured here, it is worth remembering that these three lines also have a combined effect. That is to say that while they are shown separately, they add up to a corporate grip on the market that even international government action will struggle to break.
