For sale: One multibillion-dollar agricultural trader. Slightly used. All reasonable offers considered.
Okay, that’s not exactly how Ivan Glasenberg, chief executive officer of embattled Glencore PLC, put things during his conference call with investors on Thursday. But it does capture the flavour of some of his remarks.
Like every other miner, Glencore is taking it on the chin as the great global commodity collapse continues to send prices spiralling lower. Shares in the Anglo-Swiss company are down 68 per cent this year.
But what may come as a shock is that the company is also suffering from a downturn in commodity trading – the stable core business that was supposed to buffer it against the wild ups and downs of the mining cycle.
Glencore began life two decades ago as a trader and still derives nearly a quarter of its profits from trading products ranging from oil to coal to wheat.
It’s not just Glencore that is suffering from trading trauma. Archer-Daniels-Midland Co., the huge U.S. trader of agricultural commodities, has seen its stock price shrivel by 31 per cent this year, while Bunge Ltd., which also trades farm products, has suffered a 30-per-cent decline in share price.
In Asia, Olam International Ltd., which trades “soft” commoditiessuch as cocoa, cotton and cashews, has lost 12 per cent of its value, while shares in Noble Group Ltd., which focuses on energy, power and gas products, are down by 66 per cent.
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