The Hidden Plumbing of Commodity Finance
6/1/202646 min
We talk about the commodity supply chain all the time. We talk about the ports and the trucks and the ships and all of that. But there's another dimension to moving commodities all around the world, which is actually paying for it. Who funds the oil tanker and what happens when that tanker is, say, stuck in the Strait of Hormuz? Commodity finance underpins production, transportation and storage of a wide variety of the things that make the modern world, but you tend to only hear about it when things go wrong. Today we speak with Lewis Hart, head of corporate advisory and banking at Brown Brothers Harriman. We discuss how the business of commodity finance actually works, how risk is priced, what makes for a good or bad warehouse, and the difference between financing a commodity you can hedge (like oil) versus one where's there's no futures market (like cashews).
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First 90 secondsJoe Weisenthal· Host0:00
Odd Lots is brought to you by VanEck. For years, investors basically forgot about real assets, energy, gold, and infrastructure. But look what's driving markets now. Central banks loading up on gold, massive CapEx cycles, currencies doing weird things. These assets are at the center of it. RAAX, the VanEck Real Asset ETF, is an actively managed one-stop shop for real assets, spanning gold, commodities, natural resource equities, and more. Go to vaneck.com/raaxpod to learn more. Fund disclosures later in this episode.
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