This commodities analyst gets by with a little help from his friends

“The only information you can use is on your phone or your WhatsApp messages,” says the trader.

How do commodities analysts know what they are talking about?

There are all sorts of data and reports out there but for Sanjay Sethi, the managing director and chief executive of Signature Agri Ventures in Dubai, those are telling you what happened yesterday; instead he wants to know what is happening today.

So where do you go?

Friends, he says.

“The critical information comes from your friends in the industry,” he said after his session at this week’s Richcomm commodities conference in Dubai. “The only information you can use is on your phone or your WhatsApp messages.”

Where are these friends?

“In government, the private sector, at the ports, in the logistic business.”

Speak to them often enough, he says, and “you can feel that this is going to be short, that that is going to be long.”

Do his friends ever contradict the consensus view?

“Of course,” he says.

And in what area are they doing so now?

He declines to give away a specific example – after all, in the food trade, this is his bread and butter.

Mr Sethi was one of five panellists for the session on agricultural commodities, which came right after the energy session. Food is clearly not as front of mind as energy is in this part of the world – about a third of the people left the conference ballroom between the two sessions, and you could hear their growing buzz from the foyer outside as lunchtime approached.

But for people such as Mr Sethi, food is easily the most important commodity.

“It’s more important than people realise,” he states. “If we have no wars [in a region] in the past so many years, it is because there is food in the stomach.”

Mr Sethi keeps an eye on Africa, which has become an important farming ground for Middle East investors.

During his panel session, he noted that while Africa remains a food powerhouse, one recent challenge is armyworms. Africa has always had them, he said, but now their more aggressive relatives from South America have moved in, destroying crops and even eating their African cousins.

In the end, he says that only two things really matter to him in assessing whether to go long or short on a trade: is there enough of this food to go around; and is the farmer getting a good enough price?

It is food for thought, from a man who thinks about food a lot.

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