The major global commodity traders posted mega profits last year due to rising food prices, more expensive energy, and disrupted exports. The global food supply has been disturbed not only by the Russian war in Ukraine but also by failed harvests caused by drought in other parts of the world.
According to experts from the United Nations and the international aid organization Oxfam, 'our food system is broken. The system does not help the vulnerable and concentrates power and profits in the hands of a few,' they told the British newspaper The Guardian.
According to the UN, food prices have already increased by 20 percent this year. "The food system is dominated by a small number of large multinationals. It is no surprise that these companies have made huge profits simultaneously."
The financial reports of major traders in grain and other food commodities have risen amid these crises. In industry jargon, the large companies are nicknamed ABCD, after their initials: Archer-Daniels-Midland, Bunge, Cargill, and Louis Dreyfus. Together they control 70-90 percent of international grain trade.
Archer-Daniels-Midland posted record profits in the second quarter of this year. Louis Dreyfus reported that its profit in 2021 increased by more than 80 percent compared to the previous year.
"The fact that the commodity trading giants are making record profits while the hunger crisis looms is unfair," says UN expert Olivier De Schutter. "Worse, these large companies could have done more to prevent the crisis." The international grain market is even more concentrated and less transparent than the energy market, De Schutter says.
There are also concerns about the concentration in the trade of seeds and chemicals used in agriculture. Three large multinationals, Bayer-Monsanto, Dupont-Dow, and Chem-China Syngenta, account for about 60 percent of the trade.