Chapter 332 Wave (II)
The iron ore war is head-on.
This has put BHP Billiton, Rio Tinto and Vale in a situation of internal and external difficulties.
And the other side.
The four major international grain traders ABCD also suffered heavy losses at this time.
After Tianzhu reached an agreement with Zhiren Company, Zhiren Company dumped 37.5 million tons of grain into Tianzhu in less than a month, instantly breaking the trend of skyrocketing international grain prices.
Next, Egypt imported 5 million tons of prepared flour (non-wheat) from Homo Sapiens in exchange for 50 years of operating rights to a railway at a port on the Red Sea.
A number of oil giants in West Asia also imported 17 million tons of grain from the Homo Sapiens company.
Faced with the massive money printing by Homo Sapiens and the huge supply of low-priced food, the global food crisis seemed to disappear all of a sudden.
ABCD rejects low-priced food.
After all, their soybean and corn production cuts were very severe, and they had originally planned to make up for the losses by relying on high prices.
Now, the Intelligent Company has directly crashed the market, not even giving them a chance to recover their losses. It is simply leaving them no way to survive.
Bunge's office in Sydney, Australia.
An emergency meeting is being held at this time.
Helen Sachs, the branch manager, Lawrence, the head of the marketing department, Jack Smith, the head of the warehousing department and others all looked very unhappy when they saw the data list on the projection screen.
Lawrence pointed to the inventory sector chart and said, "We currently have 7.5 million tons of wheat in stock and 2.43 million tons of barley. The sales of barley are not a big problem. Many breweries in Germany, Britain, and Italy have sent us inquiry letters."
But this so-called good news did not make Manager Helen happy. She gritted her teeth and said:
"The international wheat price has fallen to US$330 per ton. We have lost at least US$4 billion. Damn Homo Sapiens!"
As the head of the marketing department, Lawrence understands the current situation of their company even better: "We only have two choices now. One is to wait until next year to see if the price will go up. The other is to sell at a lower price."
"No! I am against waiting for the price to rise next year." Jack Smith said seriously: "Do you think the Sapiens company will reduce production next year? No, they will continue to increase production next year, and the price of wheat will only be lower next year."
Helen thought for a while and asked, "Jack, why do you think Homo sapiens will increase production next year?"
"Haven't you noticed? Mada Island has been controlled by the Homo Sapiens Company. The tropical grassland area in the west of Mada Island and the plateau area in the middle are more suitable for growing wheat."
As he spoke, Jack Smith found a natural topographic map of Mada Island on his laptop.
"Look, with the technology and development speed of Homo sapiens, it is estimated that Mada Island can cultivate tens of millions of hectares of wheat fields. This means that next year, Homo sapiens' wheat production will most likely increase by hundreds of millions of tons."
Hearing this number, Helen couldn't sit still: "Hundreds of millions of tons?"
This number seems a bit far-fetched, but Helen has to believe it because Sapiens produced 47 million tons of wheat in just two tropical plateau areas, Medan and Shan Plateau.
Mada Island is also a tropical region, with plateau areas and dry grasslands. The area of arable land that can be developed is even larger, and its agricultural production potential cannot be underestimated.
What's more, the agricultural technology of the Sapiens company is also very powerful.
When Helen thought of this, she bit the tip of her pen anxiously.
"Manager Helen, we should sell these wheat stocks as soon as possible! We can make at least $30 at $330 per ton. If the price continues to fall..." Jack Smith quickly suggested.
But Lawrence smiled bitterly: "Jack, your idea is too naive. If we take action now, the price of wheat will fall further."
The price of wheat in the international market can now be maintained at US$330 per ton. That's because ABCD were reluctant to sell before, hoping to drive up the price. They didn't expect that Homo sapiens would be so cruel and drive the price down in one go.
If ABCD also follow suit and sell off now, it will definitely lead to a further drop in international food prices.
At that time, as long as the price falls below US$300 per ton, it means that their wheat cost price has been broken through.
This is also the reason why Helen found it difficult to make up her mind. She estimated that the headquarters was also having a headache about this issue at this time.
The price of grain compared to that of Homo sapiens would mean a chain reaction in the market, and they might even lose money when selling grain .
If they do not follow the prices of Homo sapiens, other food importing countries will turn to Homo sapiens, and their food will then have to continue to be stored in warehouses.
Jack Smith also had something to say about continuing to store.
The grain storage warehouses in Australia are divided into different levels. There are strategic storage warehouses that can store grain for about 5 years, medium-term warehouses that can store grain for about 3 years, and short-term warehouses that can only store grain for 1 year.
Since Australia produces a lot of grain, it naturally does not need a large number of strategic warehouses for long-term storage. After all, the construction and maintenance costs of long-term warehouses are relatively high, and capital will certainly not be used to build a large number of long-term warehouses.
Therefore, most of the warehouses in Australia are simple short-term warehouses that can only store goods for about one year.
This situation was not a problem in the past, after all, Australia's high-quality wheat was often in short supply.
But now it became a big problem.
7.5 million tons of wheat is not a small number. If it cannot be sold as soon as possible, there are only two options: either store it in a rotten warehouse, or upgrade and renovate the warehouse to increase the grain storage period to two to three years.
Bunge is now caught in a dilemma.
Selling will cause the market price to fall further and eventually become a losing business.
If you don’t sell it, it will rot, or you have to spend money to upgrade and renovate the warehouse.
Neither option is a good one.
Jack Smith, who had no other options, asked with a troubled look in his eyes: "Lawrence, what can you do?"
Lawrence spread his hands, looking very helpless: "I have no choice. The key now is that Homo sapiens are dumping food at low prices, and we are forced into a corner."
Jack Smith racked his brains, and suddenly he came up with an idea: "Can we go to the WTO and ask Homo sapiens to stop dumping at low prices?"
Lawrence shook his head helplessly. "Sapiens is not a member of the WTO. They don't need to abide by the WTO's trade rules. What's more, Sapiens has always been overbearing. They don't care about the WTO's opinion."
Helen bit the pen tip to make a tooth mark and sighed: "Huh... Let the headquarters decide! There is nothing we can do."
Lawrence nodded: "This kind of thing should really be handed over to the headquarters. We have no way of making a decision right now."
Helen finished writing the report soon.
ADM, Cargill and Louis Dreyfus, which were also suppressed by Sapiens, also have high food inventories due to their previous reluctance to sell.
Looking around the world, there are few buyers who can consume their food stocks.
Of course, if they sold it at a low price, the Far East would certainly import a lot of it.
The problem is that ABCD is unwilling to accept this now!
Once they sell their stockpiled grain at a low price, they will suffer a lot of losses, which will be more painful than killing them.
They could have made tens of billions of dollars in profit from it, but now not only can they not make any money, they are also very likely to suffer losses. Not only ABCD can't accept it, no one can accept it.
But time was not on their side.
The longer the time is delayed, the more disadvantageous it will be for ABCD.
