Immense Commodity Trading Profits

What do the top ten commodities trading firms have in common? To start off, half of the firms listed as the top ten (2010 survey) are headquartered in Switzerland. An excerpt from Commodities – Switzerland's Most Dangerous Business says

"Because of tax privileges, a strong financial industry and weak political regulation [Switzerland] continues to attract trading and mining corporations as a dunghill attracts flies."

The top firms have a diverse business, while some specialize in oil and gas, others are focused on grains and food, and some on metals. Whatever their main area of expertise the large majority of their revenues come from physical trading and delivery. Below is the list of the top ten producing firm in 2010.

  • Vitol Switzerland
  • Glencore Switzerland
  • Cargill U.S.A. (MN)
  • Koch Industries U.S.A. (KS)
  • Trafigura Switzerland
  • Gunvor Switzerland
  • Archer Daniels Midland Co U.S.A. (IL)
  • Noble Hong Kong
  • Mercuria Switzerland
  • Bunge U.S.A. (NY)

What is particularly interesting about these firms is how lean they are run, which of course means a bigger share of profits to go around for the employees. For example Vitol and Glencore only have a staff of 2,700 people each, but their revenues were $195bn and 145bn respectively.

The Glencore IPO last year made many of its employees multi-millionaires including the top executives passing the highly coveted billion mark (Company President Ivan Glasenberg is rumored to have a worth of approximately 10 billion thanks to Glencore).

The Commodity and Energy trading industry will always be around as everyone in the world needs both to survive. Recently potential laws that have been proposed in the United States to curb certain types of commodity trading, primarily speculation etc. (although "speculation" in itself is a very gray area), but it is hard to imagine how they will come to fruition and how effective they will be.

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