Risk of Fraud "commodity"

Business Losses bored and Time
Operations with commodities of various kinds

It is important to say that operations with commodities (trading and futures) happen every day between traders and professional traders and bags (especially the BMF in the case of Brazil).

However, there is a whole series of transactions involving commodities that have no support or simply, even seeming plausible, does not happen when not outright fraud. These operations often involve soy or sugar, but I have seen also with coffee and other types of commodities (wood, meat, leather, minerals, metals, oil and orange juice ...).

The classic scheme is you receive an offer to sell or purchase by a large amount of a commodity.
Sometimes the offer is written (as LOI - Letter of Intent) and up accompanied by bank references of foreign banks (mostly false). From here there are numerous variants.
In some cases the negotiation will end up with signing contracts and issuing letters of credit, etc. ... and then does not show the goods at the time of delivery or any surveys.
In other cases the supposed buyer requires the payment of a "performance bond" (amount deposited by the vendor to ensure delivery) before issuing the letter of credit ... the seller deposits the performance bond, letter of credit can not deposit and performance bond is used improperly or as ballast for other picaretagens the supposed buyer.
There are, in short, the real blatant fraud, false letters of credit (but apparently perfect) delivered to the seller for the goods that this release, which disappears soon after. In the latter case the seller cries at the time of withdrawal of the letter of credit.
In another variant, this time to damage the buyer, the seller requires a transferable letter of credit after the deadline for delivery of the goods, he goes out trying to cash a small portion of the letter along with a bank (usually foreign), usually with the excuse of having to finance the performance bond. If you succeed he will have achieved its goal which was to pocket some money upfront and disappear. If you can not just end there but the seller will never deliver the goods because it does not.

Usually these operations, when consistent and good, are conducted by professional traders who know the market.
The advice, if you really want to get into this kind of business, is personally verify independently, and each word, information, reference and document submitted by counterparties. If there are discrepancies or omissions without a valid justification, fall off immediately.

Another important advice is not to believe in miracles. Almost all commodities have prices determined on exchanges that exist just for this purpose.
The stock price is, in practice, the price at that time can be achieved by selling the product through its own stock. It makes sense that someone offer discounts absurd for the same product for sale outside of the bag. It would be crazy if he did, because it is the same as working more to earn less ... but that is what is often falsely proposed in these "business" in commodities.

Finally, it is important to note that often these proposals who does not have a minimum of logical consistency (not to say sense of the ridiculous) to check what are the actual numbers of availability of such commodity.
I've seen, for example, proposals for vendors who said they had supposed ready and available 8 million tons of Brazilian sugar for export. In Brazil in 2005 were produced about 27 million tons of sugar and these were exported 17.5 million tons. In other words, these gentlemen claimed to have hands on "ready and available" almost half of Brazilian sugar exports of the year or if you prefer, almost 30% of annual production in the country!

It is worth visiting the company website F.O. Licht ( www.fo-licht.com ) that conducts and publishes research studies and statistics on world trade in commodities.