The Hidden Plumbing of Commodity Finance | Odd Lots

We talk about the commodity supply chain all the time. We talk about the ports and the trucks and the ships and all of that. But there's another dimension to moving commodities all around the world, which is actually paying for it. Who funds the oil tanker and what happens when that tanker is, say, stuck in the Strait of Hormuz? Commodity finance underpins production, transportation and storage of a wide variety of the things that make the modern world, but you tend to only hear about it when things go wrong. Today we speak with Lewis Hart, head of corporate advisory and banking at Brown Brothers Harriman. We discuss how the business of commodity finance actually works, how risk is priced, what makes for a good or bad warehouse, and the difference between financing a commodity you can hedge (like oil) versus one where there's no futures market (like cashews). Chapters: 00:00:00 - Cold Open 00:04:04 - Guest Introduction: Lewis Hart 00:08:43 - Price Risk and Hedging Mechanisms 00:12:42 - Due Diligence and Risk Assessment 00:14:29 - Market Structure and Bank Participation 00:17:30 - Collateral Tracking and Documentation 00:19:26 - Strait of Hormuz Crisis Impact 00:25:03 - Crisis Management and Contract Terms 00:28:18 - Non-Hedgeable Commodities 00:33:42 - Futures Market Development 00:36:10 - Market Intelligence and Trends 00:40:50 - New Trade Routes and Adaptations 00:42:10 - Final Thoughts Watch Bloomberg Vodcasts:    • Bloomberg Video Podcasts | Interviews & More   Watch more Odd Lots episodes:    • Odd Lots   Bloomberg's Joe Weisenthal and Tracy Alloway analyze the weird patterns, the complex issues and the newest market crazes. Join the conversation every Monday and Thursday for interviews with the most interesting minds in finance, economics and markets. Join the conversation: discord.gg/oddlots Subscribe to Bloomberg Podcasts: https://bit.ly/BloombergPodcasts Check out more Odd Lots:    • Odd Lots (Audio)   Get the Odd Lots newsletter: https://www.bloomberg.com/account/new... And for all things Odd Lots, visit https://www.bloomberg.com/oddlots #Investing #Markets #Finance #Bloomberg #Podcast #OddLots Visit us: https://www.bloomberg.com/podcasts For coverage on news, markets and more: http://www.bloomberg.com/video Visit our other YouTube channels: Bloomberg Television:    / @markets   Bloomberg Originals:    / bloomberg