The negligible risk of default - and the fact that the credit is backed by the merchandise itself - is what makes this crisis so strange.
Yup. This is the reason I'm breaking out the old tinfoil hat and thinking it's an International Plot to achieve some dastardly end.
Just because you're paranoid that doesn't mean they aren't out to get you!
On a more 'normal' level, the rapid price fluctuations in the commodities markets will create uncertainties and increased risk wrt the value of the goods being shipped. Against that is the low cost of moving the goods from port A to port B and the fact nobody is going to load a shipload of wheat until they have a buyer already lined-up.
And, realistically, the players in these markets have long standing relationships.
A puzzlement.
