This fireside chat recap is from Day 3 of FreightWaves’ Global Supply Chain Week. Day 3 focuses on food and perishables and the consumer packaged goods supply chain.
FIRESIDE CHAT TOPIC: Big shifts among grain traders and how it impacts agricultural supply chains
DETAILS: Jonathan Kingsman discusses several key trends that have impacted global supply chains in agriculture over the past 40-plus years. One is the evolution of the huge grain merchants that controlled so much of the flows back in the 1970s, who have either changed their way of doing business or disappeared altogether in mergers. The second is the growing efficiency of the supply chain in agriculture, which recently has come under pressure from revived government intervention.
SPEAKER and INTERVIEWER: Kingsman is the author of “Out of the Shadows: The New Merchants of Grain” and host of the podcast “Commodity Conversations.” He is interviewed by John Kingston, FreightWaves editor at large.
BIO: Kingsman spent nearly 40 years in the commodity business as a trader, a broker, and finally, as an analyst. He also founded Kingsman SA, an analytics firm in the sugar market that was sold to what is now S&P Global in 2012. Kingsman, who lives in Lausanne, Switzerland, also is the author of “The Sugar Casino”; “Commodity Conversations – An Introduction to Trading in Agricultural Commodities”; and Crop to Cup:.
KEY QUOTES FROM KINGSMAN
On recent trade wars: “Governments were coming back into the business, not just in the U.S., which was impacting very seriously grain exports out of the U.S., but also in Russia, where the Russian government is sort of getting involved again in Russian grain exports.”
“Government intervention impacts these trade flows and makes it pretty difficult for markets to operate. If you want these markets to operate, you need to have the price signals getting through and you need governments to stay away from trying to do what they do when they set prices and fix export quotas.”
On the impact from recent trade wars: “Looking back now, it’s not that bad. Those supply chains still exist. The supply chains are working so we can see that the market is robust and those supply chains are robust.”
“Farmers are attacked for being big. But this increasing efficiency allowed for the amount of farmland to go down and allowed these areas to be reforested.”