Interview

Sweet talking

Robin Cave, Chief Executive of the sugar broker Czarnikow, discusses food, fuel and the future with Stefan Stern, Visiting Professor at Cass.

Mary Poppins was right: a spoonful of sugar helps the medicine go down. The nanny's timeless wisdom is a reminder that some commodities will always be in demand. So it is not surprising that Robin Cave, the 48-year-old Chief Executive of the sugar broker and consultant Czarnikow, has a confident air as we settle down to talk.
Not that everything in the sometimes volatile world of sugar trading is always sweet. When Cave was brought in to run Czarnikow three and half years ago the firm was wrestling with the great financial crisis. Cave was a 20-year veteran of derivatives trading at City houses such as Smith New Court, Merrill Lynch and HSBC. He had worked mainly in equity derivatives, not commodities, and knew nothing about sugar. He had also never been a chief executive before. "People here knew a lot more about sugar than I did, and for a while I was allowed to ask some basic questions," he says. "Even now I learn something new about sugar almost every day."
Czarnikow started trading all sorts of exotic commodities in London in 1861. It became a pure-play sugar trader 20 years ago when it was heavily dependent on the Australian market. It diversified to trade in the growing sugar markets such as Brazil and India. But when the credit crunch hit, trade (and cash) flows were disrupted. Cave was brought in from outside the industry to help right the ship.


Global preferences
There are many basic facts about sugar that the outsider may not appreciate. In India, for example, the preference is for larger sugar crystals, whereas in Japan the stress is more on achieving the greatest purity.
The juice from sugarcane is highly versatile. Boil it and let it crystallise and you have sugar. Ferment it and you have alcohol. And the fibrous residue called bagasse, left after the sugarcane has been crushed to extract the juice, can be burnt to produce electricity and power the sugar processing machinery.
The use of bio-ethanol as a possible replacement for fossil fuels is another area to explore. But here, Cave says, the price of crude oil is key. If it falls, the incentive to find alternatives reduces. But were we to head back to $150 a barrel or higher, research would be stepped up again.
Improved technology is changing everything in the sugar industry, Cave says. Efficiency has improved and the development of large areas of land in Brazil and India has changed the dynamics of the market. Satellite images can help to predict surpluses or shortfalls by identifying the size of sugar cane crops around the world.


Improved crops
But misreading these images can also skew markets. In equity markets, volatility increases when economic times are bad, but life in commodities is rather different. Indeed, says Cave, the challenge in the industry can be to persuade farmers to improve their crops when prices are steady and reasonably high.
The crucial thing for Czarnikow is to maintain the best possible market intelligence by understanding how farmers are operating worldwide and what this will mean for levels of supply. The value of the crop in the ground can rise or fall long before sugar is actually delivered to customers. Skilful use of hedging is thus vital - which is where a derivatives expert such as Cave can offer experience and insight.
Czarnikow's London offices are literally just round the corner from Cass and the company has been a corporate partner since May 2010, supporting Cass students through placements and internships. Cass's masters degree in trade finance and shipping turns out a ready supply of potential recruits - people who already have an affinity for the business of international trade. "We're spoilt," says Cave.


Renewable fuels
Czarnikow is also working with Cass on a white paper to be published this year which will explore future demand for transport fuel and the role that renewable fuels will play in meeting it.
The demand for energy is growing in much the same way as the demand for sugar and food. Czarnikow hopes that Cass's expertise will help the company to better understand how that market is growing, and the type of fuels that will be required. Czarnikow is an expert in bio-ethanol, based on its market knowledge of sugarcane. Bio-ethanol already accounts for about 6 per cent of global transport fuel consumption, and this could rise.
Czarnikow is positive about the potential for technological innovation to increase the volume of ethanol that can be produced from existing feed-stocks and to enhance the compatibility of ethanol with petrol.
In the meantime, we will all continue to need a few spoonfuls of sugar in our tea, cakes, fizzy drinks, alcoholic beverages and a thousand and one other consumer products. This is one commodity that remains constantly in demand.


Stefan Stern is Director of Strategy at Edelman and also Visiting Professor of Management Practice at Cass. He can be contacted at stefan.stern@edelman.com

The way you convey is brilliant. An obligation of appreciation is in place in regards to bestowing this important information! antivirus test

I found that site very usefull and this survey is very cirious, I ' ve never seen a blog that demand a survey for this actions, very curious...
https://www.archive.org/details/girlfriend-activation-system-review/

I am just also been searching for subjects seeing that useful seeing that this specific. Looking forward to up coming write-up.sugar daddy dating sites free for sugar babies

Wonderful illustrated information. I thank you about that. No doubt it will be very useful for my future projects. Would like to see some other posts on the same subject!
verhuur garage box

Nice to read your article! I am looking forward to sharing your adventures and experiences.
heated ice cream scoop

Great write-up, I am a big believer in commenting on blogs to inform the blog writers know that they've added something worthwhile to the world wide web!..
www.textyourexbackmichaelfiore.com

This is very educational content and written well for a change. It's nice to see that some people still understand how to write a quality post!
https://archive.org/details/girlfriend-activation-system-review

This is such a great resource that you are providing and you give it away for free. I love seeing blog that understand the value. Im glad to have found this post as its such an interesting one! I am always on the lookout for quality posts and articles so i suppose im lucky to have found this! I hope you will be adding more in the future...
bail bonds in costa mesa

Most of the time I don't make comments on websites, but I'd like to say that this article really forced me to do so. Really nice post!
can you improve eyesight naturally

Thank you for some other informative website. The place else may just I get that kind of information written in such a perfect method? I have a venture that I am simply now running on, and I've been at the glance out for such info.
fentermina

An interesting dialogue is price comment. I feel that it is best to write more on this matter, it may not be a taboo topic however usually individuals are not enough to talk on such topics. To the next. Cheers.
watch movies online free movie2k

Great job for publishing such a beneficial web site. Your web log isn't only useful but it is additionally really creative too. There tend to be not many people who can certainly write not so simple posts that artistically. Continue the nice writing
https://www.rebelmouse.com/thedesiresystemreview/

Thanks for posting this info. I just want to let you know that I just check out your site and I find it very interesting and informative. I can't wait to read lots of your posts.
balo du lịch

I just want to let you know that I just check out your site and I find it very interesting and informative..
Click here

I think this is an informative post and it is very useful and knowledgeable. therefore, I would like to thank you for the efforts you have made in writing this article.
https://www.rebelmouse.com/vitiligomiracle/

Thanks for the blog loaded with so many information. Stopping by your blog helped me to get what I was looking for.
his explanation

Its a great pleasure reading your post.Its full of information I am looking for and I love to post a comment that "The content of your post is awesome" Great work.
megashare

I recently found many useful information in your website especially this blog page. Among the lots of comments on your articles. Thanks for sharing.
rebelmouse

That is the excellent mindset, nonetheless is just not help to make every sence whatsoever preaching about that mather. Virtually any method many thanks in addition to i had endeavor to promote your own article in to delicius nevertheless it is apparently a dilemma using your information sites can you please recheck the idea. thanks once more.
lasbarcias

I am glad that it turned out so well and I hope it will continue in the future because it is so worthwhile and meaningful to the community.
cirurgia plastica no nariz

Hey what a brilliant post I have come across and believe me I have been searching out for this similar kind of post for past a week and hardly came across this. Thank you very much and will look for more postings from you.
iphone best news reader

I read a article under the same title some time ago, but this articles quality is much, much better. How you do this..
balo giá rẻ

I havent any word to appreciate this post.....Really i am impressed from this post....the person who create this post it was a great human..thanks for shared this with us.
hướng dẫn vps

I admit, I have not been on this web page in a long time... however it was another joy to see It is such an important topic and ignored by so many, even professionals. professionals. I thank you to help making people more aware of possible issues.
argumentative examples

This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information. Keep it up. Keep blogging. Looking to reading your next post.
rebelmouse

I learn some new stuff from it too, thanks for sharing your information.
cormar carpet reviews

Your website is really cool and this is a great inspiring article. Thank you so much.
decoracao

Excellent article. Very interesting to read. I really love to read such a nice article. Thanks! keep rocking.
http://ebookreviews.ning.com/pdf/girlfriend-activation-system-review

I would like to thank you for the efforts you have made in writing this article. I am hoping the same best work from you in the future as well. Thanks...
best bitcoin hosting

I think this is an informative post and it is very useful and knowledgeable. therefore, I would like to thank you for the efforts you have made in writing this article.
hotel discount code

Thanks for the valuable information and insights you have so provided here...
ebookers discount code

I like this web blog very much so much superb info .

http://www.rebelmouse.com

Hey what a brilliant post I have come across and believe me I have been searching out for this similar kind of post for past a week and hardly came across this. Thank you very much and will look for more postings from you. stress verminderen

Yes i am totally agreed with this article and i just want say that this article is very nice and very informative article.I will make sure to be reading your blog more. You made a good point but I can't help but wonder, what about the other side? !!!!!!THANKS!!!!!! domain-keywords

I am definitely enjoying your website. You definitely have some great insight and great stories. https://www.rebelmouse.com/venusfactorsystemreview/

I was looking at some of your posts on this website and I conceive this web site is really instructive! Keep putting up.. metal garden trellis

Thanks a lot for sharing us about this update. Hope you will not get tired on making posts as informative as this.
megashare

Great post, you have pointed out some great points , I also think this s a very excellent website.
concordia

Thanks for providing recent updates regarding the concern, I look forward to read more.
Baumpflege