Commodity trading firms are people or companies who speculate and trade in various commodities as diverse as metals, petroleum, agricultural items, and spices.
There are several commodity trading companies in the world, and they come in different shapes and sizes. However, for the sake of this read, we will look at the best among them that basically cast an extensive influence on the commodity markets they trade.
Here is a table of what to expect:
Table of contents
How Commodity Trading Works
Commodity fees are a characteristic of demand and supply. The call for a commodity is directly proportional to its price and the delivery of a commodity is inversely proportional to its charge.
The pricing of a commodity also fluctuates primarily based on authorities’ regulations, geopolitical tensions, the worldwide economic system, elements of production, and so forth.
Commodity trading involves different types of contracts that derive their cost from the underlying commodity. In India, commodity contracts include spot, futures, and options contracts.
- In spot contracts, buying and selling and settlement of commodities in on the spot.
- Commodity futures are traded at a standardized destiny charge. The purchaser of a futures settlement has the proper and responsibility to shop for the commodity at a predetermined fee in the future and the vendor should promote the commodity at such fees.
- In an alternative contract, the buyer has the right but not the responsibility to shop for the commodity at a predetermined future rate.
Advantages of Commodity Trading
Trading in commodities has multiple advantages which consist:
Diversification:
This is the most vital one. The returns in commodity markets are inversely proportional to fairness and debt markets as a boom in commodity costs has a tendency to negatively impact the price of production and the general business.
Hence, making an investment a positive percentage into the commodity markets can also bring about mitigating the dangers related to capital markets.
Perfect hedging device:
For instance, prices of metals consisting of bullion generally tend to increase at a better charge than inflation. Investors can experience an upward push inside the real price of their invested corpus.
Thus, the commodity exchange acts as an inflation hedge. Alternatively, organisations can restore the price of uncooked materials by transacting within the corresponding commodity contracts.
For instance, a material manufacturer can freeze the price of cotton and cast off the risk associated with rising cotton prices. As a result, cash glide management and economic planning improve.
Low margin:
Commodity buying and selling have a decreased margin as compared to stocks and bond markets.
Types of Commodities
Since there are such a lot of commodities, they’re grouped into three predominant categories: agriculture, power, and metals
How do I set up a commodity trading firm?
Here are 5 simple and effective steps that will help them to start their commodity trading.
- Getting Familiar About The Commodity Trading Exchanges
- Selecting the Efficient Stockbroker
- Opening The Commodity Trading Account
- Making An Initial Deposit
- Create A Trading Plan
15 Best Commodity Trading Firms In The World
Here are the top commodity companies in the world:
- Vitol
- Glencore
- Archer Daniels Midland
- Gunvor International
- Cargill
- Koch Industries
- Noble Group
- Louis Dreyfus
- Trafigura
- Mercuria
- Bunge
- Wilmar
- Olam
- Mabanaft
- Phibro
#1 Vitol
Founded in Rotterdam in 1966 by Henk Viëtor and Jacques Detiger, Vitol is a Dutch energy and commodity trading company.
Vitol engages in the extraction, trade, refining, storage, and transport of energy. Though physical trading, logistics, and distribution are at the core of its business, refining, shipping, terminals, exploration and production, power generation, and retail businesses complements these.
Currently, Vitol has 40 offices worldwide and its largest operations are in Geneva, Houston, London, and Singapore. Its headquarters are located in Geneva, Switzerland; Rotterdam, the Netherlands.
Vitol is the largest independent energy trader in the world and one of the best commodity trading firms in the world.
#2 Glencore
Founded in 1974 with its current company created through a merger of Glencore with Xstrata on May 2, 2013, Glencore plc is an Anglo-Swiss multinational commodity trading and mining company with headquarters in Baar, Switzerland. Its oil and gas head office is in London and its registered office is in Saint Helier, Jersey.
Glencore has worldwide activities in the production, sourcing, processing, refining, transporting, storage, financing, and supply of metals and minerals, energy products, and also, agricultural products.
Glencore International is one of the best commodity trading firms in the world and ranked the 484th-largest public company in the world in the 2020 Forbes Global 2000.
#3 Archer Daniels Midland (ADM)
Founded in 1902 and headquartered in Chicago, Illinois, the Archer-Daniels-Midland Company (ADM) is an American multinational food processing and commodities trading corporation.
The ADM Company manufactures and sells protein meals, vegetable oil, corn sweeteners, flour, biodiesel, ethanol, and other value-added food and feeds ingredients.
It operates over 270 plants and 420 crop procurement facilities worldwide, where cereal grains and oilseeds are processed into products used in food, beverage, nutraceutical, industrial, and animal feed markets worldwide.
ADM is one of the best commodity trading firms in the world and is also ranked #54 in the 2020 Fortune 500 list of the largest United States corporations.
#4 Gunvor International
Founded in 2000, Gunvor Group Ltd is a Cypriot-domiciled multinational commodity trading company registered in Cyprus, with its main trading office in Geneva, Switzerland. It also has trading offices in Singapore, the Bahamas, and Dubai, with a network of representative offices around the globe.
Gunvor International engages in the trade, transport, storage, and optimization of petroleum and other energy products, as well as having investments in oil terminal and port facilities.
Its operations comprise securing crude oil upstream and delivering it to market via pipelines and tankers.
Gunvor Group is one of the world’s largest independent commodities trading houses.
#5 Cargill
Founded in 1865, Cargill, Inc. is an American privately held global food corporation based in Minnetonka, Minnesota, and incorporated in Wilmington, Delaware.
Cargill is an international producer and marketer of food, agricultural, financial, and industrial products, and services. It also supplies about 22% of the US domestic meat market, importing more products from Argentina than any other company, and is the largest poultry producer in Thailand.
Cargill is one of the best commodity trading firms in the world and also the largest privately held corporation in the United States in terms of revenue.
#6 Koch Industries
Founded on February 8, 1940, Koch Industries, Inc. is an American multinational corporation based in Wichita, Kansas. It is one of the best commodity trading companies in the world.
Koch companies are involved in the manufacturing, refining, and distribution of petroleum, chemicals, energy, fiber, intermediates and polymers, minerals, fertilizers, pulp and paper, chemical technology equipment, ranching, finance, commodities trading, and investing.
In 2017, State featured the Koch company in the Forbes list of America’s Best Employers.
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#7 Noble Group
Founded in 1986, Noble Group Holdings Limited (commonly known as Noble) is a commodity trader based in Hong Kong.
Noble is Asia’s leading independent energy products and industrial raw materials supply chain manager. It is also one of the best commodity trading companies in the world.
#8 Louis Dreyfus
Founded in 1851, Louis Dreyfus Company B.V. (LDC) is a global merchant firm that is involved in agriculture, food processing, international shipping, and finance.
Basically, Louis Dreyfus Commodities B.V. processes and trades agricultural products, and engages in merchandising a range of commodities.
The company makes up about 10% of the world’s agricultural product trade flows. It is the world’s largest cotton and rice trade. Also, it is regarded by many as the second-largest player in the world’s sugar market.
Louis Dreyfus Company has its head office in Rotterdam in the Netherlands while the company’s parent, Louis Dreyfus Holding B.V., has its headquarters at the World Trade Center in Amsterdam.
Louis Dreyfus companies are also present in over 100 countries, with 72 offices. Major offices are located in Geneva, London, Beijing, Buenos Aires, Paris, São Paulo, Singapore, New York City, and Connecticut.
#9 Trafigura
Founded in 1993, Trafigura Group Pte. Ltd. is a Singaporean multinational commodity trading company that trades in base metals and energy. It is legally registered and headquartered in Singapore.
Basically, Trafigura Beheer B.V. engages in the sourcing and trading of crude oil, petroleum products, renewable energies, metals, metal ores, coal, and concentrates for industrial consumers worldwide.
Trafigura is the world’s second-largest private oil trader after Vitol and the world’s largest private metals trader.
#10 Mercuria
Founded in 2004, Mercuria Energy Group Ltd is a Cypriot-domiciled multinational commodity trading company active in a wide spectrum of global energy markets.
Its core business is sourcing, supplying, and trading crude oil and refined petroleum products, natural gas (including LNG), power, coal, biodiesel, carbon emissions, base metals, and agricultural products.
Mercuria is one of the world’s five largest independent energy traders and asset operators and is based in Geneva, Switzerland, with 37 additional offices worldwide.
#11 Bunge
Founded in 1818, Bunge Limited is an American agribusiness and food company, incorporated in Bermuda, and headquartered in St. Louis, Missouri, United States.
Bunge Limited basically engages in the agriculture and food businesses worldwide, with integrated operations from farming to retail.
It is currently one of the best commodity trading firms in the world with approximately 32,000 employees in 40 countries.
#12 Wilmar International
Founded in 1991, Wilmar International Limited is a Singaporean food processing and investment holding company that provides management services to its 400+ subsidiary companies.
Basically, its business activities include oil palm cultivation, edible oils refining, oilseeds crushing, consumer pack edible oils processing and merchandising, specialty fats, oleochemicals and biodiesel manufacturing, grains processing, and merchandising, and sugar milling and refining.
Wilmar International is one of Asia’s leading agribusiness groups and ranks amongst the largest listed companies by market capitalization on the Singapore Exchange (SGX). It was also ranked 3rd in the World’s Most Admired Company (Food Production) by Fortune in 2019.
#13 Olam
Founded in 1989, Olam International is a major food and agri-business company, operating in 60 countries and supplying food and industrial raw materials to over 19,800 customers worldwide.
Olam International is a global integrated supply chain manager and processor of agricultural products and food ingredients. It is currently among the world’s largest suppliers of cocoa beans and products, coffee, cotton, and rice.
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#14 Mabanaft
Founded in 1997, Mabanaft is the trading arm of Marquard & Bahls AG, a leading independent petroleum company that engages in the wholesale and import of petroleum products in Europe, North America, South America, Africa, and Asia.
Its core business includes regional trading and wholesale, retail business to end consumers, service stations, and bunkering.
#15 Phibro
Founded in 1901, Phibro is an international physical commodities trading firm with its headquarters in Stamford, Connecticut.
Phibro trades in crude oil, oil products, natural gas, precious and base metals, agricultural products, commodity-related equities, and other products.
FAQs on Commodity Trading Firms
Here are the top commodity companies in the world:
Vitol
Glencore
Archer Daniels Midland
Gunvor International
Cargill
Koch Industries
Noble Group
Louis Dreyfus
Trafigura
Mercuria
Bunge
Wilmar
Olam
Mabanaft
Phibro
The Chicago Board of Trade commodities trades agricultural goods, precious metals, energy products, and even U.S. Treasury Bonds.
The three most commonly traded commodities are oil, gold, and base metals.
Crude oil is the commodity with the highest trading volume
Investing in commodities can provide investors with diversification, a hedge against inflation, and excess positive returns.
In Conclusion
The article above the top commodity trading companies in the world. Carefully go through them and enjoy trading with them.
