Crop trader Olam to pay US$3mil fine for delayed sales reports


NEW YORK: Crop trader Olam Group Ltd will pay a US$3.3mil fine for delayed reporting of cotton sales to the US Department of Agriculture (Usda) and the Commodity Futures Trading Commission (CFTC), a move that could have impacted cotton prices.

Olam delayed reporting five cotton sales to an Asian buyer in 2021, the CFTC said last Friday. The sales, which were reported as much as five weeks late, amounted to more than 375,000 bales of cotton with a value of over US$190mil, according to the CFTC.

Companies like Olam report cotton sales to the Usda, which then releases weekly and monthly export reports that are often used as an indicator of cotton demand.

The delay “resulted in the publication of inaccurate and misleading information regarding cotton sales, undermining faith in a key indicator of supply and demand, and potentially impacting the integrity of commodities pricing,” Ian McGinley, the CFTC’s director of enforcement, said in a statement.

The CFTC said Olam knew “that information indicating Olam’s counterparty might be purchasing large quantities of US cotton is a significant market indicator that affects or tends to affect the price of cotton.”

The Asian buyer, who was not named, is “typically one of the largest global purchasers of cotton,” the CFTC said.

Olam Group, based in Singapore, said in a statement that it cooperated fully with the CFTC’s investigation and had agreed to pay the fine without admitting or denying the findings. — Bloomberg

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

Olam , cotton , Usda , CFTC

   

Next In Business News

Metal markets rush to adjust to clampdown
Apple’s US$1bil outlay may be a fleeting win
MKHOP’s plantation land deals in the pipeline
Google offers to loosen search agreements
Tether sees US$10bil in net profits for 2024
Qualcomm wins key chips trial against Arm
Higher gold prices expected to boost Malaysia’s exports
Evolving strategies for US market growth
Painting a brighter future
China property flare-ups resurface as crisis enters its fifth year

Others Also Read