World Perspectives
wheat

Imperfect Fungibility

In the world of global grain trading, commodities are deemed fungible, or mutually interchangeable. However, fungibility is a relative term since grain prices can vary geographically for various reasons including transportation costs, local supply/demand differences, small qualitative differences, information gaps, etc. The following example of wheat prices this year is illustrative. In the graphs below, spot wheat prices in the Black Sea region, including Ukraine, experienced an “M” shaped volatility early this calendar year followed by a sharp spike upwards in the fall. However, spot wheat prices in Argentina did not reflect the earlier volatility and instead made a steady year-long, less steep climb toward today’s curr...

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From WPI Consulting

Weighing in on strategic realignment

WPI’s team was retained by the governing board of a U.S. industry organization to review a decision, reached by vote, to invest significant assets into the development and management of an export trading company. WPI’s team conducted a formal review of this decision and concluded that the current level of market saturation would limit the benefits of the investment. Based on WPI’s analysis and recommended actions, the board subsequently reversed its decision and undertook a strategic planning effort to identify more impactful investments. On behalf of numerous clients, WPI has not only assisted in identifying strategic paths but also advised their implementation.

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