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Wheat Buy-Up Sparks Price Manipulation

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After my numerous rants on this subject at last it is getting mainstream attention.

Even the present Govt + City Regulators get it in the neck - cos they are ignoring putting proper controls on these despicable Trades in London

Evil Rich Govt shits in charge + H.R. specially 'vetted' schizoid City traders

= UK mayhem & unnecessary World suffering by societies poorest (for Trader/City Casino gains)

The series of purchases by Frontier Agriculture, described by a number of traders as "unprecedented", will reignite growing concerns among food manufacturers and campaign groups over the potential for giant trading companies and financiers with deep pockets to profit and even distort commodity markets.

Traders told the Bureau of

Investigative Journalism that Frontier bought all available May Futures contracts on the London International Financial Futures and Options Exchange (Liffe) in the period running up to the tender date in the last week of April. Feed wheat sets the benchmark price for wheat used in food.

In recent weeks, Frontier is believed to have taken physical delivery of approximately 225,000 tonnes of feed wheat now worth in the region of £40m in what has been described as an attempt to corner the market.

Frontier strongly rejected any suggestion of an attempt to manipulate the market. It did not confirm or deny it made the unusually large trades and refused to reveal its position. The company's trading director, Jon Duffy, stated that all the wheat contracts it took physical delivery for were made to secure enough grain to fulfil customers' orders.

"We are not speculators, said Duffy. "We are physical grain traders. We buy about 5m tonnes of grain. We buy it, move it, transport it and deliver it."

The spectacular grain raids, which are not illegal, were confirmed by three leading wheat traders who spoke to the Bureau.

But the move appears to have backfired. With wheat in short supply three months before harvest, an unusually dry spell combined with a Russian export ban imposed last August sent wheat futures spiralling.

Frontier's purchase sent May Futures even higher compared with other contracts. This could have created millions of pounds in profit for Frontier.

But the Russian government's announcement in May that it would lift its export ban, much-needed rain and the temporary closure of a major bio-ethanol facility on Teeside, which uses almost 100,000 tonnes of wheat each month, led to a sudden price drop. This meant Frontier could have lost between £5m and £10m on its acquisition, according to one senior grain trader.

Frontier said it sold on all wheat associated with this trade but would not confirm whether it lost money.

Wheat May futures on Liffe climbed from £153 per tonne in October last year to over £222 in April.

Deborah Doane, director of anti-poverty campaign group World Development Movement, which has been a vocal critic of what it describes as opaque commodity markets, said: "The end result of trades like this is a volatile market that often has no connection to real supply and demand, wreaking havoc on consumers in the UK and in poor nations.

"The UK Government has turned a blind eye and has aimed to block European proposals for regulating commodity markets that would bring this type of profiteering to a halt even though the light touch approach to regulation has been shown to be a complete failure."

It is currently impossible to establish the identity of those who make large commodity trades on Liffe. The identity of traders is only known by the exchange and brokers.

Huge financial players – whether they are hedge funds, index funds or giant trading houses such as Cargill or Glencore – have come under growing scrutiny in recent years as trading volumes have escalated sharply.

This has sparked concern within the G20 that speculation is feeding inflation and aggravating poverty in poor countries. And the European Commission this autumn is expected to revise its Markets in Financial Instruments Directive (MIFID), which has attracted a fierce lobbying drive from banks trying to ward off expected greater transparency in derivative markets across the EU.

Later in the year, Liffe will introduce rules in London that will analyse the proportion of soft commodities that is held by banks, index funds, hedge funds and grain traders. It is also considering whether to introduce position or delivery limits in soft commodity markets.

Frontier, meanwhile, on revenues of £980m and profits after tax of £16.8m, has grown swiftly in 10 years to become Britain's leading grain purchaser, putting it ahead of Openfield, the UK's largest farmer-owned grain business, Gleadell Agriculture and Glencore Grain.

Frontier's Duffy says its market share is 23pc and that Frontier buys 5 m tonnes of grain which also includes barley, oats and rapeseed each year.

Duffy stresses that Frontier is independent of its powerful shareholders, Cargill and Associated British Foods. Both shareholders own a number of major food processing and biofuel facilities in Britain. This, suggest farming insiders, has the potential for Frontier to exert significant control on farmers and rival grain suppliers.

- Nick Mathiason is a business reporter at The Bureau of Investigative Journalism

http://www.telegraph...e-bull-run.html

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After my numerous rants on this subject at last it is getting mainstream attention.

Even the present Govt + City Regulators get it in the neck - cos they are ignoring putting proper controls on these despicable Trades in London

Evil Rich Govt shits in charge + H.R. specially 'vetted' schizoid City traders

= UK mayhem & unnecessary World suffering by societies poorest (for Trader/City Casino gains)

[/i]

Yes, it's big business,

And the bigger you are, the more you can corner and control the 'free' market.

Edited by SHERWICK

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Yes, it's big business,

And the bigger you are, the more you can corner and control the 'free' market.

There is no shortage or bad harvests!

It's the super rich buying up productive farmland around the World which started forcing up prices for produce. They then try to manipulate and corner the markets in the City.

At their worst - they can start creating deliberate shortages by planting bad seed then betting on a bad harvest in the near future (cos they own the farms)

12 Sept 2011

Intervention may stop food price bull run

This week, the UN Food and Agriculture Organisation (FAO) revealed that food prices eased slightly in August, dropping from 231.7 to 231.1.

This puts them only 3pc below the February peak seen just before concerns about rising food prices were cited as a possible catalyst for Middle East and North African uprisings.

This means prices are still 26pc above August last year, creating worrying conditions for the world's poorest regions, with Oxfam warning the number of malnourished people may begin to rise from 925m to more than 1bn.

Although the G20's first ever farming ministers conference in Paris condemned soaring global food prices and called for concerted action, little action has been suggested. The US, Brazil and China watered down proposals on limiting agriculture for biofuels, which drives up land prices, and export restrictions stopping poorer countries from getting higher prices for their food from abroad rather than feeding domestic consumers.

http://www.telegraph...e-bull-run.html

Edited by erranta

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After my numerous rants on this subject at last it is getting mainstream attention.

Even the present Govt + City Regulators get it in the neck - cos they are ignoring putting proper controls on these despicable Trades in London

Evil Rich Govt shits in charge + H.R. specially 'vetted' schizoid City traders

= UK mayhem & unnecessary World suffering by societies poorest (for Trader/City Casino gains)

[/i]

Last year Frontier found it very difficult to buy feed wheat to fulfil their supply contracts as the the UK farmers didn't like their contracts and it cost them a lot of money...

This is therefore a reaction to last year and nothing more suspicious (no I don't work for them!)

This will be to supply the Cargill (50% owner of frontier) starch plant in Manchester (where they struggled to find wheat to suit their criteria (cheap and close by) and the Vivergo (joint venture between BP, associated British Foods - also 50% owner of frontier) Bioethanol plant in Hull than will open in a couple of months (and consume circa 110,000 tonnes per month (a truck every 10 minutes!). This is effeciively just buying the first 2 months of consumption for the new bioethanol plant.

Glencore who supply feed wheat to Ensus on Teesside (the plant noted as temporarily having shut down in the article) had issue and also stiffed Ensus (part of the reason for the shutdown) due to badly sent up and thought through futures contracts used to purchase the feed wheat.

Edited by koala_bear

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Another factor driving prices up is that Saudi Arabia is going from 100% wheat self sufficient to 100% wheat importer by 2016 because it cant continue to piss away its aquifers on irrigated wheat.

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Last year Frontier found it very difficult to buy feed wheat to fulfil their supply contracts as the the UK farmers didn't like their contracts and it cost them a lot of money...

This is therefore a reaction to last year and nothing more suspicious (no I don't work for them!)

This will be to supply the Cargill (50% owner of frontier) starch plant in Manchester (where they struggled to find wheat to suit their criteria (cheap and close by) and the Vivergo (joint venture between BP, associated British Foods - also 50% owner of frontier) Bioethanol plant in Hull than will open in a couple of months (and consume circa 110,000 tonnes per month (a truck every 10 minutes!). This is effeciively just buying the first 2 months of consumption for the new bioethanol plant.

Glencore who supply feed wheat to Ensus on Teesside (the plant noted as temporarily having shut down in the article) had issue and also stiffed Ensus (part of the reason for the shutdown) due to badly sent up and thought through futures contracts used to purchase the feed wheat.

Far too simplistic

Cargill appears to be another of the Elites massive Globalist monster companies (you never heard of) with fingers into loads of pies

esp the link with buying up/control of World food crops/produce to flog to other Big Business thru Cargill owned/partner energy companies!

Five major business segments

Cargill is an international provider of food, agricultural and risk management products and services. Our businesses are organized around five major segments: Agriculture Services, Food Ingredients and Applications, Origination and Processing, Risk Management and Financial, and Industrial. You will find short descriptions and related links to all of our businesses here:

http://www.cargill.c...esses/index.jsp

12/09/2011

http://www.independent.co.uk/news/uk/crime/seven-guilty-of-boilerroom-fraud-2353528.html

Seven men were convicted today of an £8 million boiler-room fraud, the Serious Fraud Office (SFO) said.

The Spanish-based operation targeted thousands of investors in the UK applying high pressure telesales techniques to push shares in a bio-diesel company, Worldwide Bio Refineries (WBR). In fact, the company was practically worthless.

One defendant, company director Redmond Johnson, 66, pleaded guilty to conspiring to defraud investors.

Fellow director Dennis Potter, 72, who lived in Singapore, was convicted of the conspiracy along with John Murphy, 35, and Greg Pearson, 38, both of Marbella, Daniel Murphy, 37, and Lee Homan, 37, both of Hertfordshire, and Peter Bibby, 44, of south London, who all managed share sales.

Bibby absconded before the Ipswich Crown Court trial and was convicted in his absence. There is a warrant for his arrest.

Commenting on the convictions, SFO director Richard Alderman said: "This is an excellent result. Not only do boiler-room fraudsters prey on vulnerable people, they also deprive genuine businesses of the capital they need to grow.

"Quite bluntly, they ruin lives. I am delighted that the SFO is playing its part in tracking down operations like these and bringing fraudsters to book."

WBR was set up in 2003 and had a processing plant in County Durham that was purported to produce diesel fuel from vegetable matter. It also had a plant in Singapore producing diesel intended to be marketed in the UK.

The share selling was undertaken by salesmen working from a number of boiler-rooms in Marbella and Barcelona although many of them used false names and claimed to be calling from offices Frankfurt, Stockholm or Amsterdam.

The business prospects of the company and the bio-diesel market were inflated by WBR's directors and the salesmen, who claimed that substantial international business was being done and that the business's shares were valued at £110 million.

Investors believed that their investment in a successful bio-diesel enterprise would net them significant short-term returns, bolstered by claims that WBR was to be floated on the stock market. These claims were bogus.

The SFO found that the bio-diesel plant had no output and, with only limited imports coming from the Singapore plant, WBR was not being managed with any intention of it becoming a growing commercial success.

Virtually all of WBR's revenue between 2005 and 2007 was generated by share sales.

Of the £8.2 million attracted from investors, around £4 million was transferred to accounts in Cyprus, Jersey and Spain for the benefit of the boiler-room salesmen.

The group will be sentenced at Ipswich Crown Court on September 23.

Edited by erranta

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Far too simplistic

Cargill appears to be another of the Elites massive Globalist monster companies (you never heard of) with fingers into loads of pies

esp the link with buying up/control of World food crops/produce to flog to other Big Business thru Cargill owned/partner energy companies!

Yes but probably true in this case...

The reason most people have never heard of Cargill:

1 It doesn't sell to consumers

2 It is the world largest Family ownerd firm - therfore no share holders (or anlaysis or newspapers giving it coverage)

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How many extra 100 millions of Chinese or Indians need to be fed each year? They are not just eating rice either. It's going to be very easy to see food panics long before the world actually runs short.

Perhaps we should be converting our flats into premium food production cells? Convert those hash bedsits!

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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