UPDATE 1-Vitol plans grain market debut, hires Viterra traders

Wed Feb 20, 2013 2:24pm EST
 
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* Trading houses expanding into new commodities markets

* Agriculture, oil markets more connected due to biofuels

* Grains margins seen as much higher than oil returns

By Emma Farge and Sarah McFarlane

LONDON, Feb 20(Reuters) - Top oil trader Vitol is building a global grains desk and has taken advantage of Glencore's takeover of Canadian grains giant Viterra to hire a team of its traders, trading sources said on Wednesday.

Vitol, which has an annual turnover of nearly $300 billion, will vie for market share along with rival trading firms Gunvor and Mercuria, which have also expanded in agricultural commodity markets as they seek to expand across new markets.

The Swiss firm's advance into agriculture could help it spot niche opportunities in both energy and soft commodity markets, which are seen as increasingly connected due partly to the growth in crop-based biofuels.

"Markets are now linked in ways that they never were before. Ten years ago an oil trader could lead a happy existence without ever knowing what was happening to the corn price. Those days are gone," said Robert Piller, director of Aupres Consult and commodities lecturer at the Geneva Business School.

Vitol, already present in the sugar market, is hiring around 15 staff as part of the expansion, one of the sources said.   Continued...