Drought = Good for Business?
In a show of tact and diplomacy rivalling that of UK spin doctor Jo Moore’s memo that 9/11 was a good day to bury bad news, Glencore’s Director of Agricultural Products has said that the current drought is good for business.
Reported in the Guardian (Full article here):
“The head of Glencore’s food trading business has said the worst drought to hit the US since the 1930s will be “good for Glencore” because it will lead to opportunities to exploit soaring prices.
Chris Mahoney, the trader’s director of agricultural products, who owns about £500m of Glencore shares, said the devastating US drought had created an opportunity for the company to make much more money.
“In terms of the outlook for the balance of the year, the environment is a good one. High prices, lots of volatility, a lot of dislocation, tightness, a lot of arbitrage opportunities [the purchase and sale of an asset in order to profit from price differences in different markets],” he said on a conference call .
Mahoney said Glencore, which reported pre-tax profits of $2.2bn (£1.4bn), would be able to exploit the drought to its advantage, especially after its takeover of Canadian grain trader Viterra. “I think we will both be able to provide the world with solutions, getting stuff to where it’s needed quickly and timely, and that should be good for Glencore.”“
- foodramblings posted this
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