Anger over buy up of all UK feed wheat by grain company

Britain’s most powerful grain company, jointly owned by Cargill and Associated British Foods, bought and took delivery of all the available UK feed wheat last month.

The series of purchases by Frontier Agriculture, described by a number of traders as “unprecedented”, will reignite growing concerns among food manufacturers and campaign groups over the potential for giant trading companies and financiers with deep pockets to profit and even distort commodity markets, reported The Telegraph.

Traders told the Bureau of Investigative Journalism that Frontier bought all available May Futures contracts on the London International Financial Futures and Options Exchange (Liffe) in the period running up to the tender date in the last week of April. Feed wheat sets the benchmark price for wheat used in food.

In recent weeks, Frontier is believed to have taken physical delivery of approximately 225,000 tonnes of feed wheat now worth in the region of £40m in what has been described as an attempt to corner the market.

Frontier strongly rejected any suggestion of an attempt to manipulate the market. It did not confirm or deny it made the unusually large trades and refused to reveal its position. The company’s trading director, Jon Duffy, stated that all the wheat contracts it took physical delivery for were made to secure enough grain to fulfil customers’ orders.