Tuesday, March 28, 2017

Mudaballa Deputy CEO Waleed Al Mokarrab Al Muhairi and US Billionaire Thomas Kaplan publicly endorsed the Low family's Jynwel

by Ganesh Sahathevan
                                  Jynwel Capital: Rooted in the Past, Invested in the Future




Waleed Al Mokarrab Al Muhairi

Investment Committee, Deputy Group CEO & Chief Executive Officer, Emerging SectorsWaleed Al Mokarrab Al Muhairi

Waleed serves as Mubadala’s Deputy Group CEO and Chief Executive Officer, Emerging Sectors. He has oversight of Mubadala’s operational and business development activities as well as its healthcare, real estate, infrastructure and capital investment portfolios and its Enterprise Technology & Services unit.

Board Positions: Chairman of Cleveland Clinic Abu Dhabi and Tabreed. Vice Chairman of Aldar Properties and Board Member of Mubadala Petroleum, Abu Dhabi Future Energy Company (Masdar) and Investcorp Bank B.S.C. Waleed is also a member of the Board of Trustees of Cleveland Clinic.


Billionaire player in the Middle East - Thomas Kaplan of Electrum Group
Billionaire player in the Middle East – Thomas Kaplan
 of Electrum Group


Reference

Top UK Politician Held Interests In A Group Funded By Jho Low - EXCLUSIVE

Top UK Politician Held Interests In A Group Funded By Jho Low - EXCLUSIVE

Billionaire player in the Middle East - Thomas Kaplan of Electrum Group
Billionaire player in the Middle East – Thomas Kaplan of Electrum Group
Sarawak Report has learnt that a senior UK politician who holds strong connections with the Middle East was linked to a company that received a $150,000,000 injection of money from Jho Low.
In late 2012, Jho Low’s Jynwel Capital invested $150 million into the newly formed Electrum Group run by Anglo-American billionaire Thomas Kaplan – money now suspected as having emanated from the looting of 1MDB.
The investment formed 7% of the fund’s total worth of over $1 billion, which is mainly owned by Kaplan’s private family trust, according to filings in the United States and it earned Jho Low a place on the board of Electrum.
Two other major institutions also invested in Electrum at the same time: Abu Dhabi’s Mubadala Sovereign Wealth Fund and the Kuwait Investment Fund together added a further $300 million of investment, the company has said.
However, Sarawak Report has learnt from inside sources that a senior British political figure also held an interest in the company and therefore stood to benefit from these injections of hundreds of millions of dollars from Malaysia and the Middle East.

Top connections – How Jho Low used his partners as referees

Jho Low was soon utilising his connections with Kaplan and also Mubadala to promote Jynwel’s credentials as a global investor and his own image as a man of vision and integrity. A corporate video commissioned by Jynwel in 2014 features Kaplan, extensively praising his new business partner:
“What do we look for in a partner? Someone first and foremost whose word is their bond, that when they say they’re going to do something, you can bank it.” [Jynwel promotional video]
Jho Low also joined the Board of Kaplan’s wild cat charity Panthera, contributing $20 million to the fund and promoting his ‘philanthropy’ in the process.

Abu Dhabi connection

The same promotional video also features Mubadala’s Deputy Group CEO, Waleed al Muhairi again praising Jho Low. By late 2012 Jho Low had already stolen hundreds of millions of dollars from 1MDB, according to the DOJ, in connivance with another Abu Dhabi sovereign wealth fund manager, Aabar’s Khadem al Qubaisi:
“In Jynwel we have found a partner that not only shares the same passion for investing that we do, but also is a match for our values… we have worked hand in hand with Jynwel across multiple projects, multiple investments, across multiple geographies” explains Waleed Al Muhairi 
These joint investments have included, according to the Department of Justice seizure filing of 20th July, the purchase of EMI Publishing and also New York’s Park Lane Hotel Group, both of which Jho Low funded through money stolen from 1MDB.
The DOJ has already identified a record $1 billion in assets, now under seizure in the United States, as products of money laundering from 1MDB. However, it has stated that at least $3.5 billion was stolen in total from the Malaysian fund, leaving major question-marks over Jho Low’s other investments.
There is therefore considerable speculation over whether the money which flowed into Kaplan’s funds will also eventually be traced to 1MDB.
Spokesmen for Electrum (from which Low recently resigned his post) informed the Wall Street Journal that they are working with the US authorities and have ‘safeguarded and sequestered‘ any potentially tainted funds.

Potential for embarrassment

Jonathan Powell's memoir of his years working for Tony Blair
Jonathan Powell’s memoir of his years working for Tony Blair
Whether or not this turns out to be the case, Sarawak Report has been informed that the matter could cause  embarrassment for a senior UK political figure, whose involvement in the Kaplan fund was not previously known.
This is particularly so, given the added investments made by the sovereign funds from the Middle East.
Kaplan, who studied at Oxford University, but is based in the United States, already has extensive links with well-known politically connected figures in the British establishment.
His former fellow undergraduate friend, Jonathan Powell, took up a position as a ‘Senior Advisor’ to Kaplan’s multi-billion dollar Tigris Financial Group in 2011. Powell has also acted as a member of Kaplan’s wild cat charity, Panthera’s Conservation Council.
At the front of his most recent book, ‘The New Machiavelli – How to Wield Power in the Modern World’, regarded as an anecdotal memoir of his 13 years serving under former UK premier Tony Blair, Jonathan Powell acknowledges the support and assistance of his ‘colleagues’ Thomas Kaplan, Ali Erfan and Aamer Sarfraz, who are all associated with Tigris Financial Group, in the writing of the book.
Jonathan Powell - Kaplan already has close business associations with the British establishement
Jonathan Powell – Kaplan already has close business associations with the British establishment
It is well known that after Tony Blair left office Powell continued to play a senior role within his former boss’s private commercial operations, acting as a consultant to his private company Tony Blair Associates and working also with various linked PR and lobbying groups.
Blair was simultaneously Middle East envoy for the United Nations, European Union, United States, and Russia from 2007 until last year.
Considered a player, Powell was himself appointed as David Cameron’s personal Libyan Special Envoy in 2014, on the basis of his earlier diplomatic career and peace negotiations in Northern Ireland. His brother has long been close to the Conservative Party.

Billionaire businessman who stuck his nose into the Middle East

These links have now raised controversy, given Kaplan’s own interests and connections in the Middle East.
After years of non-disclosure, the billionaire has been revealed as the main funder of the campaigning organisation known as UANI (United Against Nuclear Iran), which has been the most vocal opponent of Obama’s recent peace initiatives with Iran, bitterly opposed by the Gulf States and also Israel, where Kaplan has strong ties.
For example, it has been pointed out that the Chief Executive of UANI, a former American Ambassador Mark Wallace, receives no current income from the non-profit group, yet has simultaneously acted as the CEO of Tigris Financial Group and also Chief Operating Officer of Electrum Group, both owned by Kaplan.
Investigative journalists have further identified at least three other staff connections between Kaplan companies and the UANI campaign group, which he funded to the tune of $843,,000 in 2013.
In this context, according to court filings against Kaplan (he was sued for defamation by a Greek businessman, Victor Restis) Jonathan Powell also featured as a board member for UANI in recent years:
“Jonathan Powell, an Advisory Board member of UANI and The Institute for Strategic Dialogue was a college classmate of Kaplan’s and serves as a Senior Advisor to Tigris Financial Group.” [How much money can these two Iran hawks make out of the Middle East?]
Powell's Powerbase resume includes Senior Advisor to Tigris and Advisory Board Member of UANI
Powell’s Powerbase resume includes Senior Advisor to Tigris and Advisory Board Member of UANI
Powell appears to have now resigned from this position, but archives show the link:
Screen Shot 2016-09-07 at 19.11.44

Politics or the business of instability?

Kaplan has himself claimed that his activities in the Middle East through UANI have made his organisation one of the most effective actors on the political stage and a combat force against Iran:
” “Hard to know what the outcome will be but I do know that as much as United Against Nuclear Iran may not have had Tomahawk missiles and aircraft carriers at its disposal, we’ve done more to bring Iran to heel than any other private sector initiative and most public ones.” [Video of Kaplan speaking on UANI]
However, critics have suggested that his driving motivation is financial.  His billion dollar business, mining precious metals, openly trades on the profitability of instability and conflict in places like the Middle East, they say.
One investigator, who exposed Kaplan as the primary funder of UANI, says there is ample evidence that Kaplan seeks investors in his gold and silver mining ventures by directly pointing to conflicts that threaten economic stability:
The 2002 annual report for Kaplan’s Apex Silver Mines, Ltd., which has since gone bankrupt, contained an insight into his thinking. The report, issued by Kaplan and Apex’s CEO, Keith R. Hulley, asks investors to “consider the following factors: destabilization in the Middle East and Persian Gulf, tensions between India and Pakistan, the potential for nuclear confrontation with North Korea and Iran, […] religious extremism and terrorism on a global scale and corporate hooliganism.”
The solution, explained Kaplan, is that the “trend to invest in companies with real assets and exposure to the non-correlated commodities sector is likely to prove to be long-term and secular rather than cyclical.”
In other words, if you believe political instability is likely, invest in assets like those mined by Apex.
And Wallace, as CEO of Tigris, oversaw similar language in a 2011 prospectus — after his stint with UANI commenced — for the Sunshine Silver Mine Corp., an Idaho mine owned by the group, which he played an active role in acquiring. “Investment demand for silver exposure remains strong,” said the prospectus, which was filed with the SEC, “driven in part by continued U.S. dollar weakness, ongoing economic uncertainty in Europe and political unrest in the Middle East.” [Eli Clifton, Document Reveals Billionaire Backers Behind United Against Nuclear Iran]
The message must surely be that politically connected people with links to the Middle East should shun business with Thomas Kaplan, if they want to avoid embarrassment, because his business benefits from further conflict and his organisation meddles actively in the politics of the region.





Monday, March 27, 2017

Canada's whole of government anit-Islamophobia law may have consequences for investment in Canada,and have extra-territorial effect

by Ganesh Sahathevan 




As reported by Al-Jazeera:



Canadian politicians have passed a motion that condemns Islamophobia and requests that the government recognise the need to "quell the public climate of fear and hate". 
The non-binding motion, which condemns "Islamophobia and all forms of systemic racism and religious discrimination", passed on Thursday among a divided parliament.
It asks a parliamentary committee to launch a study on how the government could address the issue, with recommendations due in mid-November.   
The study should look at how to "develop a whole-of-government approach to reducing or eliminating systemic racism and religious discrimination, including Islamophobia," the motion says.  

Islamophobia, as defined, means an undefined "irrational fear" of Islam. While normally thought of as acts of non-Muslims towards Muslims, it should arguably include , for example, the fear of Shias that Sunnis have. This is quite evident in Malaysia, where the Malaysian Government has strict policies against Shia activities. 
The Malaysian Government is also a big investor in Canada, via its wholly-owned national oil company, Petronas: 
Petronas Eyes New Island for $27 Billion Canada LNG Plan

Profits from the project will flow to the Malaysian Government to finance its activities, including those against its Shia population.
A  whole of government anit-Islamophobia law cannot simply ignore these facts.
END 



RAPID refinery " needs a specific type of crude oil "-Petronas executive VP Md Arif Mahmood explains why RAPID refinery will not be as advanced as public were led to believe

RAPID refinery " needs a specific type of crude oil "-Petronas executive VP Md Arif Mahmood explains why RAPID refinery will not be as advanced as public were led to believe

by Ganesh Sahathevan





The RAPID refinery is meant to be a very modern refinery  capable of turning virtually any crude oil into  high end products (the technical term is high complexity).

Modern refineries are not supposed to rely on any particular crude for it makes them beholden to a particular supplier or suppliers; but here we have Petronas executive VP Md Arif Mahmood (photo above) insisting :

"This refinery (Rapid) needs a specific type of crude oil that will allow us to make the necessary cut to supply to the petrochemical plants".


END 


Petronas defends RM31b joint venture with Saudi Aramco



In the wake of concerns raised over alleged attempts to sabotage the nation's economy, Petronas has defended its decision to pursue a RM31 billion deal with Saudi Aramco for the Refinery and Petrochemical Integrated Development (Rapid) in Pengerang, Johor.

English-daily The Malay Mail quoted Petronas group executive vice-president Md Arif Mahmood as saying that it was "never forced into the joint venture" and had always been eyeing a partner like Aramco.

"How can we be forced to do this deal? We were looking for a partner that would complement the project.

"We are not selling Rapid as reported. It’s a 50-50 partnership," Md Arif is reported as saying in an interview.

The Rapid project is part of Petronas’ Pengerang Integrated Complex (PIC), estimated to cost as much as US$27 billion.

"We are looking for partners to invest and co-invest. And selling and co-investing are very different," he pointed out.

Md Arif also said not many people were aware that discussions between Petronas and Aramco have been ongoing since 2014.

"The discussions with the Saudis took more than two-and-a-half years. They looked at the due diligence of the investment opportunities.

"It is not like it is only yesterday we decided to partner Aramco," he said in describing the partnership as being "an obvious and perfect" one.

The deal signing was formally witnessed by Prime Minister Najib Abdul Razak and Saudi King Salman on Feb 28 as part of the king's agenda while on a state visit to Malaysia.

Md Arif dismissed as "not credible" reports that said senior Petronas officials were against the joint-venture with Aramco and had to be forced into it.

"I am going to make this very clear. It had to be within the terms agreeable, not only for us but agreeable to both parties before we could actually get to the stage where we are now," he stressed.

Among others, Md Arif said, Rapid would be supplying at least 50 percent of the 300,000 barrels of crude oil to be refined a day at its facilities.

On reasons for partnering with Aramco, he said Petronas needed a partner that would be able to leverage its strength and manage the risks at the same time.

"Why Aramco? It is the biggest crude supplier in the world with a supply capacity of 10 million barrels a day," he said.

"This refinery (Rapid) needs a specific type of crude oil that will allow us to make the necessary cut to supply to the petrochemical plants.

"To have a crude supplier as a partner, for long-term crude security, that itself is a good reason why Aramco," Md Arif added.


Najib last week accused a former leader of spreading lies about Malaysia, which he said had nearly scuttled the deal between Petronas and Saudi Aramco.

In the veiled attack apparently aimed at Parti Pribumi Bersatu Malaysia chairperson Dr Mahathir Mohamad, Najib lamented that the opposition would rather create false propaganda than to engage on facts.

END 
References

Crude oils have different quality characteristics
graph of Density and sulfur content of selected crude oils, as described in the article text
Source: U.S. Energy Information Administration, based on Energy Intelligence Group—International Crude Oil Market Handbook.
Notes: Points on the graph are labeled by country and benchmark name and are color coded to correspond with regions in the map below. The graph does not indicate price or volume output values. United States-Mars is an offshore drilling site in the Gulf of Mexico. WTI = West Texas Intermediate; LLS = Louisiana Light Sweet; FSU = Former Soviet Union; UAE = United Arab Emirates. 

Republished: June 26, 2013: Map was corrected.
Many types of crude oil are produced around the world. The market value of an individual crude stream reflects its quality characteristics. Two of the most important quality characteristics are density and sulfur content. Density ranges from light to heavy, while sulfur content is characterized as sweet or sour. The crude oils represented in the chart are a selection of some of the crude oils marketed in various parts of the world. There are some crude oils both below and above the API gravity range shown in the chart.

Crude oils that are light (higher degrees of API gravity, or lower density) and sweet (low sulfur content) are usually priced higher than heavy, sour crude oils. This is partly because gasoline and diesel fuel, which typically sell at a significant premium to residual fuel oil and other "bottom of the barrel" products, can usually be more easily and cheaply produced using light, sweet crude oil. The light sweet grades are desirable because they can be processed with far less sophisticated and energy-intensive processes/refineries. The figure shows select crude types from around the world with their corresponding sulfur content and density characteristics.



References-Wikipedia

Jump up^ "Nelson Complexity Index" (PDF). pakpas.org. Retrieved 3 November 2016.
Jump up^ "Nelson Index". investopedia.com. Investopedia. Retrieved 3 November 2016.
Jump up^ David C. Johnston; Daniel Johnston (2006). Introduction to Oil Company Financial Analysis. PennWell Books. p. 199. ISBN 9781593700447. Retrieved 3 November 2016.
Jump up^ Johnston, Daniel (March 18, 1996). "Refining Report Complexity index indicates refinery capability, value". ogj.com. Oil and Gas Journal. Retrieved 3 November 2016.
Jump up^ "PMI-Oman 2014". pmioman14.wordpress.com. Retrieved 3 November 2016.
Jump up^ Nelson's Complexity Factor (PDF), Reliance Industries Ltd, retrieved 2009-02-28

Sunday, March 26, 2017

RAPID refinery " needs a specific type of crude oil "-Petronas executive VP Md Arif Mahmood explains why RAPID refinery will not be as advanced as public were led to believe

by Ganesh Sahathevan





The RAPID refinery is meant to be a very modern refinery  capable of turning virtually any crude oil into  high end products (the technical term is high complexity).

Modern refineries are not supposed to rely on any particular crude for it makes them beholden to a particular supplier or suppliers; but here we have Petronas executive VP Md Arif Mahmood (photo above) insisting :

"This refinery (Rapid) needs a specific type of crude oil that will allow us to make the necessary cut to supply to the petrochemical plants".


END 


Petronas defends RM31b joint venture with Saudi Aramco



In the wake of concerns raised over alleged attempts to sabotage the nation's economy, Petronas has defended its decision to pursue a RM31 billion deal with Saudi Aramco for the Refinery and Petrochemical Integrated Development (Rapid) in Pengerang, Johor.

English-daily The Malay Mail quoted Petronas group executive vice-president Md Arif Mahmood as saying that it was "never forced into the joint venture" and had always been eyeing a partner like Aramco.

"How can we be forced to do this deal? We were looking for a partner that would complement the project.

"We are not selling Rapid as reported. It’s a 50-50 partnership," Md Arif is reported as saying in an interview.

The Rapid project is part of Petronas’ Pengerang Integrated Complex (PIC), estimated to cost as much as US$27 billion.

"We are looking for partners to invest and co-invest. And selling and co-investing are very different," he pointed out.

Md Arif also said not many people were aware that discussions between Petronas and Aramco have been ongoing since 2014.

"The discussions with the Saudis took more than two-and-a-half years. They looked at the due diligence of the investment opportunities.

"It is not like it is only yesterday we decided to partner Aramco," he said in describing the partnership as being "an obvious and perfect" one.

The deal signing was formally witnessed by Prime Minister Najib Abdul Razak and Saudi King Salman on Feb 28 as part of the king's agenda while on a state visit to Malaysia.

Md Arif dismissed as "not credible" reports that said senior Petronas officials were against the joint-venture with Aramco and had to be forced into it.

"I am going to make this very clear. It had to be within the terms agreeable, not only for us but agreeable to both parties before we could actually get to the stage where we are now," he stressed.

Among others, Md Arif said, Rapid would be supplying at least 50 percent of the 300,000 barrels of crude oil to be refined a day at its facilities.

On reasons for partnering with Aramco, he said Petronas needed a partner that would be able to leverage its strength and manage the risks at the same time.

"Why Aramco? It is the biggest crude supplier in the world with a supply capacity of 10 million barrels a day," he said.

"This refinery (Rapid) needs a specific type of crude oil that will allow us to make the necessary cut to supply to the petrochemical plants.

"To have a crude supplier as a partner, for long-term crude security, that itself is a good reason why Aramco," Md Arif added.


Najib last week accused a former leader of spreading lies about Malaysia, which he said had nearly scuttled the deal between Petronas and Saudi Aramco.

In the veiled attack apparently aimed at Parti Pribumi Bersatu Malaysia chairperson Dr Mahathir Mohamad, Najib lamented that the opposition would rather create false propaganda than to engage on facts.

END 
References

Crude oils have different quality characteristics
graph of Density and sulfur content of selected crude oils, as described in the article text
Source: U.S. Energy Information Administration, based on Energy Intelligence Group—International Crude Oil Market Handbook.
Notes: Points on the graph are labeled by country and benchmark name and are color coded to correspond with regions in the map below. The graph does not indicate price or volume output values. United States-Mars is an offshore drilling site in the Gulf of Mexico. WTI = West Texas Intermediate; LLS = Louisiana Light Sweet; FSU = Former Soviet Union; UAE = United Arab Emirates. 

Republished: June 26, 2013: Map was corrected.
Many types of crude oil are produced around the world. The market value of an individual crude stream reflects its quality characteristics. Two of the most important quality characteristics are density and sulfur content. Density ranges from light to heavy, while sulfur content is characterized as sweet or sour. The crude oils represented in the chart are a selection of some of the crude oils marketed in various parts of the world. There are some crude oils both below and above the API gravity range shown in the chart.

Crude oils that are light (higher degrees of API gravity, or lower density) and sweet (low sulfur content) are usually priced higher than heavy, sour crude oils. This is partly because gasoline and diesel fuel, which typically sell at a significant premium to residual fuel oil and other "bottom of the barrel" products, can usually be more easily and cheaply produced using light, sweet crude oil. The light sweet grades are desirable because they can be processed with far less sophisticated and energy-intensive processes/refineries. The figure shows select crude types from around the world with their corresponding sulfur content and density characteristics.



References-Wikipedia

Jump up^ "Nelson Complexity Index" (PDF). pakpas.org. Retrieved 3 November 2016.
Jump up^ "Nelson Index". investopedia.com. Investopedia. Retrieved 3 November 2016.
Jump up^ David C. Johnston; Daniel Johnston (2006). Introduction to Oil Company Financial Analysis. PennWell Books. p. 199. ISBN 9781593700447. Retrieved 3 November 2016.
Jump up^ Johnston, Daniel (March 18, 1996). "Refining Report Complexity index indicates refinery capability, value". ogj.com. Oil and Gas Journal. Retrieved 3 November 2016.
Jump up^ "PMI-Oman 2014". pmioman14.wordpress.com. Retrieved 3 November 2016.
Jump up^ Nelson's Complexity Factor (PDF), Reliance Industries Ltd, retrieved 2009-02-28

Saturday, March 25, 2017

Malaysian MP Tony Pua provides a likely explanation for Kuok's Wilmar building market moving positions in sugar-Sugar King Kuok seems to still have a captive market in Malaysia


Despite the changes to the Malaysian sugar market that Pua describes, it is understood that Kuok and Wilmar continue via long term supply contracts to be the major supplier of raw sugar to Malaysia.

On 1st March, the price of white sugar was increased by 11 sen to RM2.95/kg.

The BN Minister Datuk Hamzah Zainuddin tells Malaysians to thank him because it was raised by only 3.8% and not more.  He said that's because the price of raw sugar has increased drastically.

Such cocky statements from a BN Minister always deserve a "fact check".  Let's have a look at the sugar prices chart.

Between 2009 to 2014, the Malaysian govt purchases raw sugar on behalf of manufacturers at fixed 3-year prices. From 2012-2014, it was US$26 per 100lbs.  During this period, the sugar manufacturers were happily selling process sugar for RM2.84 and making decent profits from it.

Since 2015, manufacturers purchase raw sugar from the global markets directly.

Today, the raw sugar market price is US$18.16 per 100lbs - which is lower than US$26 in 2014 even after the exchange rate differences.  However, the BN govt still increased the processed sugar price, when it should have reduced it instead.

Worse, if you look at charts, despite raw sugar price dropping to as low as US$10 per 100lbs in 2015 (from US$26 in 2014), the BN govt never once adjusted the processed sugar price lower.  This allowed the sugar manufacturing duopoly - owned by Tan Sri Syed Mokhtar and FGV Ventures - to make astronomical profits through out 2015 and 2016.

Now after making astronomical profits at the expense of ordinary Malaysians for 2 years, just because the raw sugar price has indeed increase over the past year (but still lower than 2012-2014), the sugar duopoly asked for higher ceiling prices and the stupid BN govt agreed to the hike.

So, should you "thank" the BN Minister for the "miniscule price hike"?  Or should you curse and swear at him for allowing the sugar cronies to make mega "laughing all the way to the bank" profits?




Traders question Wilmar International’s sugar rush
A new power in sugar trading is buying unprecedented amounts of the sweetener on the US futures exchange, creating confusion in one of the world’s most volatile commodity markets. 
The power is Wilmar International, a Singapore-based agribusiness whose major shareholders include the family of Malaysian billionaire Robert Kuok and Chicago-based Archer Daniels Midland. Wilmar, founded 26 years ago, is one of the world’s largest palm-oil producers but a relative newcomer in the sugar business.
A subsidiary, Wilmar Sugar Australia, is Australia’s largest raw sugar producer.
Last week, Wilmar agreed to buy $US512 million in raw sugar at the expiration of a popular futures contract on the ICE Futures US exchange.
Wilmar has been scooping up sugar by physically settling tens of thousands of futures contracts and collecting the commodity from ports across South America and elsewhere. The company has bought more than 6 million tonnes of sugar in this manner since 2015, enough to fill roughly 3000 Olympic-size swimming pools at a cost of some $US2.3 billion.
The effects of Wilmar’s moves have been the subject of debate among traders. At one point in 2015, when sugar prices were at multiyear lows because of a worldwide glut, Wilmar bought so much that traders say the company in effect mopped up that year’s global oversupply. In the rally that followed, sugar prices more than doubled.
Then, as prices peaked in September last year, Wilmar changed course and delivered excess sugar it owned to other traders on the exchange. Sugar prices fell 24 per cent in the ensuing months.
“Everybody was looking at them,” said Bruno Lima, head of sugar and ethanol at brokerage INTL FCStone in Brazil. Last week, traders and analysts ruminated on Wilmar’s latest purchase and whether it was a positive sign for sugar demand. Prices have edged higher since.
Wilmar, which entered the sugar business in 2010, owns sugar cane plantations, mills and refineries, mostly in Asia. It also trades sugar, buying raw sugar and selling it to refineries all over the world. Last year, the company handled 13.5 million tonnes of sugar, representing roughly 8 per cent of the world’s production. Some analysts say Wilmar is now possibly the world’s biggest sugar trader.
The company’s size and scale, however, are sowing concerns among some traders that it could control a large amount of the world’s tradeable sugar and influence prices.
“They are a market mover,” Nick Gentile, head trader of New York commodities trading firm Nickjen Capital, said of Wilmar. Around two-thirds of the world’s sugar production is consumed in the countries that produce it, and the rest is traded internationally.
Jean-Luc Bohbot, the 48-year-old Frenchman who runs Wilmar’s sugar business, said there is no evidence that the company’s trades affect market prices. That is “very much an incorrect view,” he said in a recent interview. “Sugar is an extremely fragmented commodity, with a very large number of players around the globe.”
While Wilmar’s sugar purchases and sales appear in some cases to have preceded rising and falling prices, Mr Bohbot said, “There is no clear correlation” between the two. Over the past few decades, sugar prices have gone in both directions when there were large physical deliveries, he added.

Freshly harvested sugarcane at a Wilmar plant near Ayr.
Freshly harvested sugarcane at a Wilmar plant near Ayr.
Many producers, end-users and speculators use commodity futures contracts to hedge price risks or make directional bets on prices. Futures are often used as a guide for pricing in the physical markets where actual commodities are exchanged.
Physical settlements of futures trades, however, are rare. Exchange operator Intercontinental Exchange estimates that fewer than 0.5 per cent of trades result in the actual delivery of commodities. The vast majority of futures contracts are unwound by traders before they expire because most firms want to avoid the hassle of transporting commodities to or from inconvenient locations. With sugar futures, buyers don’t know where in the world they will have to pick up the sweetener until after the contracts expire.
That hasn’t deterred Wilmar. Mr Bohbot said the company has found it economical to purchase sugar in bulk using futures contracts, because the exchange’s rules require sellers to deliver the sugar on board buyers’ ships, which facilitates international trading. In other commodity markets, such as grains or metals, the handover usually happens inside warehouses in locations that often might not be easily accessible.
Mr Bohbot said Wilmar ships and sells most of the raw sugar it buys to refineries in Asia and the Middle East, where consumption is growing. This sort of trading, however, is often barely profitable when shipping and other costs are factored in, he said, noting, “There is very little margin, and sometimes no margin.”
In 2016, Wilmar’s sugar division posted a 33 per cent year-over-year increase in revenue to $US5.9 billion, “an outstanding set of results,” according to the company, partly because of higher sugar prices. It earned $US125 million from the sugar business last year, for a profit margin of 2.1 per cent.
Wilmar entered the sugar market in 2010 through a $US1.5 billion takeover of Australia’s largest sugar producer Sucrogen Ltd, now known as Wilmar Sugar Australia, which owns eight sugar mills in Queensland and which says it is Australia’s largest raw sugar producer, according to its website.
It then hired Mr Bohbot, who has a long career in sugar trading, from a rival and tasked him with expanding the sugar business internationally. Wilmar made many acquisitions and entered into joint ventures with sugar producers and refineries in countries including Indonesia, Myanmar, India and Morocco. Last year the company formed a new venture with a major Brazilian sugar producer — a move likely to increase the volume of sugar it handles.
Frank Jenkins, president of Jenkins Sugar Group, a trading firm in Connecticut, said Wilmar’s large-scale buying of sugar from the futures market “is a symptom of the growth of their business.”
Dow Jones Newswires