With the reflation trade suddenly ripping through the exchanges, a $1.9tn stimulus bill steaming through the US Congress, and “Dr Copper” bursting through $9,000 a tonne to prices not seen since the heady days of 2011, the commodity markets are headline news again. Could there be a better moment for Javier Blas and Jack Farchy’s rollicking new account of those markets’ recent history to land on investors’ desks?
It’s as if the Bloomberg News reporters (and former FT journalists) have picked up not just a rich archive of ripping yarns from their years interviewing the industry’s leading traders — but some of their uncanny sense of timing too.
Commodities have not always been a hot topic. In 1998, I landed my first proper job, as bag-carrier to the head of the energy and mining department at the World Bank. Back then, commodity markets seemed in terminal decline. The oil price had plummeted by 45 per cent over the previous 18 months. The mood in commodity-producing developing countries was apocalyptic.
The Bank was on a mission to convince its clients that the good old days were not coming back: privatisation and reform were the only ways forward. At every meeting, we would pull out a chart of the real-terms price of oil over the previous nine decades. The boom times of the last two decades were a historical aberration, we would explain. Oil at $10 a barrel was here to stay.
We were of course spectacularly wrong. In December 1998, the oil price bounced, and then more than doubled in the next 12 months. It was just getting started. The 2000s witnessed a supercycle the like of which the world had never seen before — with the oil price topping out at $145 a barrel in June 2008. We had bottom-ticked the biggest commodity bull market in history.
At the core of The World For Sale: Money, Power, and The Traders Who Barter The Earth’s Resources is the story of how this historic boom catapulted a group of previously low-key international commodity trading houses — the likes of Cargill, Vitol, Trafigura, and Glencore — to extraordinary financial wealth and political power.
My review of the book was published in the Financial Times on March 2, 2021. If you have a subscription, you can read it here.
