ZURICH, SWITZERLAND — Credit Suisse Group AG announced on July 22 plans to exit the commodities trading business, following a $779 million net loss for the second quarter, the largest since 2008.
The loss was mainly due to the group’s $2.6 billion settlement with U.S. authorities after admitting it helped clients evade taxes.
The group said exiting commodities trading would further enhance capital and operating efficiencies with $200 million in expense savings, $8 billion in risk-weighted asset reduction and $25 billion in leverage exposure reduction. Credit Suisse cited low volatility and client volumes in its decision to exit.
Global investment banks are pulling back from commodities trading as regulations tighten and revenue slides, news agency Bloomberg said. Deutsche Bank AG said in December that it would exit dedicated energy, agriculture, dry bulk and base metals trading. Barclays Plc said in April it would withdraw from most of its commodities activities. JPMorgan Chase & Co. agreed to sell its physical commodities unit to Mercuria Energy Group Ltd. for $3.5 billion in March.
Since Russia’s invasion of Ukraine in February, the world’s wheat supply has been thrown into question, with poorer nations facing scarcity and a potential food crisis, according to the United Nations.
Following are countries among the world’s least developed that are the most dependent on Russia and Ukraine for their annual wheat supply (2020), according to the UN Conference on Trade and Development. Nations in Africa import 44% of their wheat from Russia and Ukraine, according to the UN.
In marketing year 2022-23, the world is projected by the US Department of Agriculture (USDA) to produce 779.03 million tonnes of wheat and provide 204.89 million tonnes for export.
These are the eight major wheat importing nations/regions as listed in the monthly USDA World Agricultural Supply and Demand Estimates (WASDE) report and their annual tonnes with production.
Russia’s invasion of Ukraine in February and the persistent La Niña climate phenomenon have combined to create some of the most volatile market conditions in recent memory, sending prices skyrocketing as nations that depend on wheat to feed their populations scramble to secure supplies.
Each month, the WASDE releases new projections to reflect the most recent global market and production conditions, and this slideshow will be updated with those changes.