The murky world of global food trade is too important to ignore

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It is the biggest reshuffle of the top tier of agricultural commodities since Cargill, long the group's largest, bought Continental's grain assets in 1999. The deal will catapult Bunge to second place among the four global traders, which they are abbreviated. ABCD, to include Archer-Daniels-Midland and Louis Dreyfus. And although the alphabetical label is outdated and the market has changed dramatically since the 1970s, concerns remain about a concentrated system of global food production. Despite some appearance on public markets and social media, it is still difficult to get good numbers on companies that, whether in agriculture or food, are impossible to avoid. An oft-used statistic is that the quartet controls between 70 and 90 percent of the world's grain trade, a figure that is probably too high. After food shortages and price spikes from 2008 to 2012, China aggressively boosted agricultural trade through state-owned company Cofco, which has entered the Big Four.

Whose 2019 book updated Morgan's classic, estimated that Singapore's five plus Viterra and Wilmar handle half the international trade in grains and oilseeds. Such dominance is worrying. The classic “hourglass” model Russia Mobile Number List of market power in food involves a large number of producers supplying an equally large number of consumers, through a small group of processors and traders. Negotiators emphasize their complementary strengths, but regulators will rightly watch them closely. Argentina and Canada have already committed to reviewing the overlaps. Brazil, Australia, the US and China are likely to follow suit, with some asset sales almost inevitable. Traders is a bit of a misnomer: this group doesn't make money by simply shifting products from A to B. In recent years, they have expanded upstream into agricultural sourcing, warehousing, transportation and port infrastructure, and downstream into processing, ingredients and final products. , while moving towards a broader range of food products.



The big problem here is that when you have this vertical integration it creates enormous intermediation power from farmers to consumers,” says Jennifer Clapp, a food safety professor. A business with more assets means higher barriers to entry and can help transfer dominance from one part of the chain to another. Bunge's strengths in processing and downstream plus Viterra's in marketing and handling create a more integrated global company. Still, negotiators are not wrong that this combination appears to be a good fit. The concern may reflect that regulators and governments should ask themselves who is monitoring the global food system, beyond the narrow prism of antitrust laws. “No one” is the blunt assessment of Abdolreza Abbassian, former senior economist at the Food and Agriculture Organization of the United Nations. Disruption, thanks to a changing climate, is becoming the rule rather than the exception.