isirst I’m going to start with the assumption that you have already download and read my 5 actionable pieces of advice on how to break into the physical commodity trading,  If not, I highly recommend you to click here,  download it and read it.  

As you may know, I’m a former physical commodity with a deep network in the most prominent commodity trading companies. Therefore, I had the leisure to observe and analyze their recruiting pattern.

The candidate they like the most often looks like that 

  • Business degree from a reputed place
  • Summer internship in commodity buyer and/or seller
  • Speak three languages
  • Work experience alongside your study
  • Proven sales ability
  • Comes from a wealthy family

Regarding the hiring process, here I’m going to be controversial. But I deeply believe it would tremendously help you:  

  • Always try to bypass the recruiter and call directly to your future boss.
  • If you are applying to a job that needs relocation, hide it.

I know it’s against everything you’ve ever been taught. But you need to understand that this industry does not reward transparency and honesty. It rewards effectiveness and boldness. Never forget it. 

Ok, got it! But now… What is the SECRET edge to become a physical commodity trader ??? 

You know that starting a career in physical commodity trading is HARD. Being in Geneva and having a healthy network, I can tell you that the big ones receive between 500 to 800 CV per opening for junior level job. Hard to stand out ! You’d better sharpen your saw as soon as possible.

How is it possible to stand out???  

1st the languages, but I’ve already explained that here !

Once it’s done….  You need to acquire a skill in relation with the physical side of a commodity.

 

But… wait what does it means ?

Physical commodity trading/merchandising is about moving raw material from the area of production to an area of consumption. Even if the paper side is the one under the light, the backbone remains the physical side. The producers use the future markets to hedge their production, while the end-user use to hedge their purchase. Nestle will hedge their purchase 24 to 18 months in advance! So you can trade exotic OTC products, but at the end of the day everything is based on hard commodities. This is why it’s a true advantage to develop a skill within the field you want to break in.

 

Ok, ok I see what you mean, but i don’t understand why being an impressive Barista will make of me more likely to get a job in a coffee trading house?

Yes of course! to stick to the coffee example, it would show

1. You know the final consumer of your client, though you have a better understanding of your client needs.

2. You have put more hour than the other showing a higher motivation level

3. Less training required as you already know a part of the business.

4. You may even teach something to the team!

All right, I understand your point, but let’s be honest how being A BARISTA would make me a better coffee trader?

In short, not necessarily. But don’t forget that commodity trading is a matter of tiny advantage, even a minuscule edge in comparison to your competitor can make a big difference at the end.  

Here a quick overview :

Metal : Learn everything about smelting, go and push to visit smelter. If you apply for an entry level job in a metal trading company, how many people do you think visited an industrial smelter ?

Scrap metal : Learn the composition of every alloy ! Go and visit scrapyard !

Coffee : Learn how to roast beans ! Go visit an industrial roaster !

Cocoa : Learn how to make chocolate and be a unbeatable on chocolate and the different type of cocoa powder and cocoa butter.

Oil : Learn how a refinery works ! Go and visit a refinery !

Grain : Become an agronomist ! Growth wheat in your garden and write down each steps. Again who do you think does that ?

You’ve got the point ? Learn a skill to make you stand out of the crowd ! 🙂 

You want proof?

Look at our teacher Grabiel Epars ( I recommend to check his interview there), he is one of the leading trader COFCO and before becoming this eminent professional, he worked in a mill during the summer!

Or Florian Cioccia our bank specialist ( also the interview here) his passion for sailing and vessels helped him getting his first job!

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Damien W.