Chapter 687: Sugar Francs Go Live
All sugar merchants, and even speculators who previously had no dealings with sugar, immediately swarmed in like sharks smelling blood.
Soon, on the three-meter-tall wooden board on the west side of the exchange hall, an exchange employee posted the first contract.
It was a sugarcane contract expiring in one month, priced at 1 franc 8 sous per pound.
According to the exchange's regulations, the "trading unit" for sugarcane was 10,000 pounds. This meant that the contract represented a buyer acquiring 10,000 pounds of spot sugarcane for 18,000 francs one month later.
Since the Dutch had long ago developed futures trading for selling tulips, and later Britain and the Netherlands saw many smaller-scale futures markets emerge, people were quite familiar with futures transactions.
Consequently, all the merchants present immediately widened their eyes.
After France's currency reform, 1 franc was equivalent to 10 sous. Thus, the price of 1 franc 8 sous represented a nearly 30% increase over the current sugarcane market rate! R9Ňβ$ novel.
However, a small-eyed middle-aged man wearing a felt hat immediately stepped up to the trading counter, pointed to the 1 franc 8 sous contract, and declared in broken French that he wished to buy it.
The surrounding crowd immediately let out a gasp of astonishment:
"Is he mad? Sugarcane only rose 40% over the last six months; does he think it'll jump another 28% in just one month?!"
"Oh, the poor man, he'll lose everything..."
Soon after, the second contract was posted.
Before the small-eyed man could even place his bid, an elderly man who had been waiting at the adjacent counter swiftly snatched it up.
The third was posted.
Instantly bought.
The fourth, instantly bought.
The fifth, instantly bought...
The merchants in the hall began to sink into shock.
Could it be that even with a 28% premium, they couldn't get any sugar?
Finally, the small-eyed middle-aged man desperately managed to grab the eighth contract. By then, the contract price had already risen to 1 franc 8 sous 1 denier.
He tucked the contract away with satisfaction and squeezed out of the crowd.
A young man with blue eyes and a broad nose hurried over, bowed slightly, and spoke in Dutch:
"Mr. Van Scheik, long time no see. You've also come to Paris?"
Van Scheik quickly returned the smile and greeting:
"It's good to see you, Mr. Wiegel. This is the future for all sugar merchants; naturally, I had to come."
Wiegel glanced at the newly posted contract that had instantly been snatched up, then leaned closer and whispered:
"To be honest, I think the price is a bit too high. Why did you—"
Van Scheik hesitated for a moment, then pulled him behind a stone pillar in the hall and spoke in an even lower voice:
"The Caribbean Sea plantations are all ruined. Aside from here, you'll find it difficult to buy sugar anywhere else."
Wiegel shook his head:
"Output in the Caribbean Sea was merely reduced; it shouldn't be this severe, should it?"
Van Scheik looked around, then said:
"You probably don't know the contents of the London Company's procurement report from last week, do you?"
The London Company was the British firm responsible for trade in the Caribbean Sea.
Every year, before the sugarcane ripened, trade companies would first travel to the producing regions to survey the market and determine purchasing prices. This information simply couldn't be kept from those with connections.
"No, I certainly haven't heard that."
"I can tell you, it's only 35% of last year's procurement volume. And most plantation owners have indicated they might not even be able to deliver."
Wiegel's expression immediately shifted.
He hadn't realized the sugarcane shortage was already so severe.
"What about the situation in Egypt?"
"Reportedly, a mysterious buyer pre-ordered all of it at a high price."
Wiegel gasped in alarm: "You mean, from now on, we can only buy French sugar beet sugar?!"
The matter of France producing sugar from sugar beets had been widely publicized months ago; after all, for large-scale sales, the source couldn't possibly be concealed.
Van Scheik spread his hands. "That's very likely the case. If I weren't short on funds, I would definitely buy more contracts today. I estimate sugarcane will reach 2 francs per pound in a month."
Wiegel frantically looked up at the wooden board displaying the contracts, only to see that the latest contract price had already soared to 1 franc 8 sous 2 deniers.
He had thought others were fools, but in reality, they were laughing at him for not recognizing a golden opportunity!
He hastily bid farewell to Van Scheik and desperately pushed his way towards the trading counter.
The trading hall quickly became like a battlefield, with shouts and curses erupting in a chaotic din, and some even resorted to fighting to snatch contracts.
Wiegel's clothes were torn, and he took a heavy punch to the face, but he finally managed to grab a contract.
He excitedly stuffed the contract into his pocket, and just as he was about to continue vying for more, he suddenly heard someone shouting from behind:
"Breaking news! The Netherlands government has announced its official recognition of the Republic of Santo Domingo!"
The crowd fell silent for a moment. The next instant, they surged towards the trading counter with even wilder fervor; no one even looked at the prices—they just bought any contract available!
Clearly, the San Domingo Parliament must have implemented a sugarcane embargo, making it so that only countries recognizing its government could purchase sugarcane.
And the Netherlands government, in order to secure sugar, had directly bowed to the Black insurgents!
In truth, for the Netherlands, Santo Domingo was a French colony, so recognizing its independence was a straightforward move, especially since Franco-Dutch relations were merely average, and the French Expeditionary Force had already suffered two defeats there.
But currently, British forces were locked in fierce combat with the Black government there. The Netherlands' action essentially sold out its British ally.
However, whoever could acquire sugarcane now stood to gain enormous profits.
So, allies and such were temporarily disregarded.
New contracts were posted, and the price had astonishingly reached 2 francs per pound!
Almost simultaneously, several counters on the west side of the exchange were toppled by the crush, and the traders seated behind them were injured, letting out piercing screams...
"A bloody incident at the exchange? Twenty-seven gravely injured?" Joseph had not yet returned to Versailles when he received the report from Besancon, the Director of the Police Bureau, in his carriage.
The latter nodded nervously. "Yes, Your Highness. Over sixty others sustained minor injuries. This is all due to my subordinate's improper handling..."
After inquiring about the specific details, Joseph merely reprimanded him briefly and instructed him to coordinate with the exchange personnel to manage the aftermath as quickly as possible. After all, he had seen for himself that the exchange's police presence was not insignificant.
Once Besancon had departed, Joseph narrowed his eyes and mused aloud:
'I didn't expect the Dutch to be so greedy. They jumped the gun before I even acknowledged the Black government.'
'But this isn't bad either. With such a commotion, sugarcane will become even more sought after.'
'Let's just implement that plan ahead of schedule.'
The next day.
The Paris Agricultural Futures Exchange reopened after trading had been suspended due to the mass brawl.
As the crowd surged into the hall, they first noticed that the number of police officers had more than tripled. Then, they saw the exchange manager standing atop a newly repaired counter, proclaiming loudly:
"Effective immediately, to facilitate settlement, those purchasing contracts with francs will be granted priority trading rights!"
People were instantly stunned.
Given the current frenzy of trading, what good was 'priority trading'?
Those without priority simply wouldn't be able to buy contracts at all!
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