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Daan Vriens, CEO Cefetra and his devotion for Commodity Trade
Whether it concerns our supply of energy, metals and minerals, or our food 'commodities' - they are essential in our daily lives. Rotterdam plays an important role in the global trade of commodites. The CEO of the Rotterdam commodity trader Cefetra talks about his devotion for commodity trade and his passion for Rotterdam.
Rotterdam has traditionally been an important hub in the global trading of grains and other agricultural products. Worldwide more than 1.6 billion tons in agricultural commodities are traded every year, which roughly equates to a value of 1.2 trillion dollars. The port of Rotterdam is an important storage, transhipment and processing point in various global agricultural supply chains. According to the Port of Rotterdam arround 10.3 million tons of the port's throughpout is agricultural goods, mostly shipped in bulk.
Commodity trading is more than simply just shipping goods from A to B. It’s about managing complex risks, in the physical supply chain, but also in price developments as a function of supply and demand. And these prices differ in time and geographical location. This is exactly why financial derivative markets have emerged at commodity exchanges, in which future delivery contracts are traded, price discovery takes place and price risks can be hedged. The main futures or terminal markets for agricultural commodities are currently in Chicago and Dalian in China.
There was a ‘grains exchange’ in Rotterdam too, located in the large hall below the World Trade Centre. The Rotterdam grains exchange as a physical trading place has been shut down many years ago, with trading nowadays taking place on digital platforms The traders are however still present in town. They bring global supply and demand together and arrange financing and logistics from offices in the city, and whereby the physical flow doesn’t necessarily have to go through Rotterdam. Would it be better to buy Argentine or Brazilian soybean meal now, or possibly wait another week, and should we ship it to Rotterdam or to another port?
Cefetra is a trading house which specialises in supplying agricultural commodities to the feed-, food- and fuel industry. It was founded in 1899 as the ‘Central Bureau’, supporting the Dutch farmer cooperatives in purchasing fertilizers. The company was known as Cebeco after a merger in 1972, at which point it set up a trading division for animal nutrition, from which Cefetra was eventually created in 2002. It annually trades around 21 million tons of soy bean meal, grain, sunflower meal and Canadian rapeseed, mainly from the Americas and the Black Sea Region into Europe and has an annual turnover of around 5 to 6 billion euros. It is located in the iconic Willemswerf.
Daan Vriens talks about the dynamics of the commodity trade, what characterises a trader and how the demand for commodities and therefore trading is transforming and how Rotterdam is responding to this.
Commodity Trading Hub Rotterdam
Commodities are critical for the global economy as they literally power the world, feed the planet and provide the essential inputs in all the devices (e.g. smartphones) and household appliances (e.g. shampoo) that make our lives easy. These commodities are traded all over the world. The value is estimated at 5 trillion dollars a year, with an estimated value of around 6 trillion dollars a year. The commodity traders are the essential spiders in the web; they make sure these commodities are delivered to the right place, at the right time and in the right form and they cover the complex risks for their customers.
Yet very little is known among the general public about these commodity traders, what role they play in global supply chains and what role Rotterdam plays as the Maritime Capital of Europe, in the past, today and in tomorrow’s world.
In a portrait triptych business leaders show their devotion for commodity trade and Rotterdam.
