Commodities, Geneva and the Swiss franc

Emiko Terazono Bunge, the international agricultural trader, is closing its sugar and ethanol operations in London and moving them to Geneva, the home of its grain trading hub. Its decision is counterintuitive, especially at a time when the jump in the currency after the Swiss ditched their franc cap has pushed costs up dramatically. Bunge says the move will “improve efficiency and further integrate with our core trading businesses”, and there are worse places in the world to work. Commodities traders have a long history in Switzerland, especially in Geneva. Easy access to finance, low taxes and relatively light regulation have made it a good place to do business. According to the Swiss Trading and Shipping Association, the country’s commodity sector consists of about 500 companies which account for SFr20bn, or 3.5 per cent, of the country’s GDP. The industry employs between 10,000 and 12,000 people. As such, few expect trading houses to up sticks and move from Switzerland because of the soaring currency. The country still has a lot going for it: It’s a good timezone for trading, straddling the business day in the east and west, it is politically stable and boasts access to a skilled labour pool … continue reading

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