In recent years, commodities markets have undergone significant changes, rising from relative obscurity to a subject of intense scrutiny by policy-makers and supervisors. In a more global market structure, trading houses play a pivotal role in the supply chain that brings commodities from producers to billions of consumers around the world. As a key part of the infrastructure that performs transformation services, commodities trading houses allow worldwide physical trade of commodities by managing complex risks. Their recent growth in size and reach – now comparable to oil majors and big mining companies – has raised questions about the soundness of risk management procedures involved in complex operations across diverse commodities physical and paper markets. Despite their growing importance in the commodity value chain, however, the business model of trading houses has been relatively unexplored by the academic literature and policy-makers, as their linkages with financial markets.
This half-day conference organised by the European Capital Markets Institute and the Centre for European Policy Studies aims at contributing to a more informed policy debate about the functioning of global commodities markets and the role of trading houses. Following up onto last year publication of a major ECMI/CEPS contribution to the academic and policy debates (available here), aimed at raising awareness about the functioning of price formation in commodities markets and about the interaction between physical and futures/financial markets, the event will host the presentation of an extensive report drafted by Professor Craig Pirrong (University of Houston) and titled “The Economics of Commodity Trading Firms”. The report, commissioned by Trafigura, explains how trading houses manage commodities risks. A panel discussion on the evolution of commodities market structure and its impact on commodities risk management and trade will follow.
Participation in ECMI-CEPS meetings is a benefit of ECMI and CEPS membership. ECMI and CEPS members register free of charge. EU and national officials, academics (including PhD students), NGOs (not representing a commercial interest) as well as press are also admitted free of charge.
Other participants may be admitted for €175 (21% VAT included, payable via online registration secure platform). If you have questions regarding membership or participation please contact firstname.lastname@example.org before registering.