Reuters / Top oil trader Vitol is building a global grains desk and has taken advantage of Glencore’s takeover of Canadian grains giant Viterra to hire a team of its traders, trading sources said Feb. 20.
Vitol, which has an annual turnover of nearly $300 billion, will vie for market share along with rival trading firms Gunvor and Mercuria, which have also expanded in agricultural commodity markets as they seek to expand across new markets.
The Swiss firm’s advance into agriculture could help it spot niche opportunities in both energy and soft commodity markets, which are seen as increasingly connected due partly to the growth in crop-based biofuels.
“Markets are now linked in ways that they never were before. Ten years ago an oil trader could lead a happy existence without ever knowing what was happening to the corn price. Those days are gone,” said Robert Piller, director of Aupres Consult and commodities lecturer at the Geneva Business School.
Vitol, already present in the sugar market, is hiring around 15 staff as part of the expansion, one of the sources said.
The trading sources said it had hired at least five traders from Viterra’s Geneva, Hamburg and Singapore offices following Glencore’s $6-billion takeover last year.
The first grain-trading staff are expected to join next month, two of the industry sources said.
Vitol declined comment. Glencore officials could not immediately be reached for comment.
Vitol’s expansion in the agriculture market follows an upturn in the fortunes of dominant companies in the global grains markets.
In the Glencore-Viterra tie-up — one of the largest deals in the global agriculture business for years — many Viterra traders discovered that Glencore traders had similar roles to their own, the industry sources said.
“A lot of the main grains people at Viterra are not being taken on by Glencore because of direct overlaps,” said a trader who formerly worked for Viterra.