If your an ‘average Joe’ you probably aren’t to familiar with the juggernauts that are commodity trading firms. To keep this lesson short, the commodity market trades in primary rather than manufactured products. For example, soft commodities are agricultural products such as wheat, coffee, cocoa and sugar. It gets much more complicated, but you’ll understand more as we go along. The most important lesson to be learned here is that the top 10 commodity trading firms brought in a whopping $1.3 trillion in revenues last year. The number was large enough to draw the attention of just about everyone and now there is pressure to increase regulation of such firms as if they were banks. That’s neither here nor there, we’re here today to uncover the Top 5 Commodity Trading Firms in the World.
Be prepared because it’s probably going to surprise you….
5. Koch Industries – $115 billion (2011 Revenue)
Fred Koch founded Koch Industries in 1925. The firm is now run by Chairman and CEO David Koch and drove an eye opening $115 billion in revenue three years ago. We apologize for the dated revenue numbers, but this game is a little trickier than public corporations. Koch focuses largely on coal, oil refining and transportation, petrochemicals, forestry and paper. For those keeping score at home, Koch got into some trouble for allegedly selling into Iran during a trade ban. Either way, they’re still making some serious paper.
4. Trafigura – $120.4 billion (2012 Revenue)
Splitting from a group of companies run by Marc Rich, Trafigura was founded by Claude Dauphin, Eric de Turkheim and Graham Sharp in 1993. Trafigura calls Geneva, Switzerland it’s home. The company trades largely in energy-based commodities, but also dabbles in ferous-metals and shipping.
3. Cargill – $133.9 billion (2012 Revenue)
If you’re a fan of the movie Braveheart than Cargill is probably your firm. Founded in 1865 by William Wallace, Cargill started as a one grain storage silo in Iowa. Now headquartered in Minneapolis, Minnesota, privately held Cargill is famous for its agribusiness, but is also a huge player in energy, foodstuffs and biofuels production. If you’re a fan of saving the environment, you’re probably not going to go with Cargill. The firm has faced heavy criticism for destroying the rain forests in Brazil.
2. Glencore Internation – $236 billion (2012 Revenue)
Notice the aggressive jump from #3 to #2 in terms of revenue. We’ve now reached the Evil Empire of Commodity Trading Firms. Glencore Internation was founded in 1974 by Marc Rich as Marc Rich and Co. Glencore has always been attached to troubling rumors, but there’s no denying it’s driving serious revenues. The firm has significant coal, metal and oil assets, but major revenue is attributed to trading activities in energy, metals, minerals and agriculture. When Glencore went public most were shocked to see the percentage of control they possessed over oil and grain export.
1. Vitol Group – $303 billion (2012 Revenue)
The king of the commodity market is Vitol Group. Founded in 1966 by Ian Taylor, Vitol is now housed in Geneva, Switzerland and Rotterdam, Netherlands. As the world’s largest oil and gas trader, Vitol sold approximately 2.4 million barrels a day in 2011. They dabble a bit in sugar, metals and grains, but oil is king and Vitol wears the crown.
Photo by John Moore/Getty Images
