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A new era of commodity trading: Czarnikow predicts changes to come

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A new era of commodity trading: Czarnikow predicts changes to come

June 26
20:24 2020

Robin Cave, CEO of Czarnikow, a leading supply chain, pricing and financing services company has warned that the trading industry is going through a period of structural change.

Recent supply chain disruption due to Covid-19 has demonstrated the importance of flexibility and the dangers of physical assets driving business. Just as retail has had to embrace online retail or risk closure, the world of soft commodities will have to innovate to ensure food security.

Furthermore, increased global market transparency – brought about by the rapid rise of technology and liberation of market information – has changed the hands in which market power sits. In the commodity agri-markets, the traditional brokerage house has been side-lined.

The company foresees the trading of additional services becoming as valuable as the raw goods themselves.  It is predicted that in the longer term, these service-and-goods bundles may even fuse and become re-commoditised. 

Robin Cave said, “By diversifying our services we are able to stay true to our core values of embracing change and entrepreneurship, established in the early days of our business. And by combining our founder’s legacy of information transparency with our approach to trade flow optimisation, we are able to provide the best sustainable value for our clients. Now we can share exactly where their product comes from, where it is going and, more importantly, the price paid or achieved.”

To stay relevant in the evolving marketplace (alongside managing the lowest sugar price in years), Czarnikow have repurposed its resources to build a portfolio of services that support trade and participants along the supply chain – from warehousing, logistics and risk management to financial solutions, an app and a sustainable sourcing programme. Czarnikow has used its deficiency in physical assets advantageously: it has freed the company of a traditional trading approach and enabled diversification.

Czarnikow is also continuing its founder’s legacy of information transparency through its approach to trade flow optimisation – creating the best sustainable value for its clients by sharing exactly where their product comes from, where it is going and, more importantly, the price paid or achieved. This is fiercely at odds with opaque trading models where either the cheapest or highest price is sought – to the benefit of the brokers’ trading books but not the clients’ bottom line.

As Czarnikow’s open-book approach disrupts standard practice – as they believe it will – Robin Cave foresees the trading of additional services becoming as valuable as the raw goods themselves. And that will signal the time for trading houses to reinvent their business models – yet again.

Notes to editors:

Czarnikow Group is a leading supply chain, pricing and financing services company for food ingredients and packaging. In 2019, it launched Czapp, a mobile app, which tailors and disseminates market information.

The Group is headquartered in London, operates from offices in ten different countries and has a local presence in a further four countries.

The Group employs around 190 people and has an annual turnover of GBP1.68 billion (year end 2018). The Group’s range of supply chain services includes: physical trading, logistics and stock management, price risk management, market analysis, corporate finance and financial solutions. It also runs a successful sustainable supply programme, VIVE. Czarnikow Group has a reputation for innovation and integrity and uses its unique network and cutting-edge services to deliver effective services for its clients across its targeted supply chains.

Media Contact
Company Name: Czarnikow Group Limited
Contact Person: Rebecca Spencer
Email: Send Email
Phone: 0207 972 6600
Country: United Kingdom
Website: http://www.czarnikow.com