Robert Kuok on Vintage 1963

 

         All the passages below are taken from the book “Robert Kuok---A Memoir” written by Robert Kuok with Andrew Tanzer. It was published in November 2017.

 

I had been making one or two trips a year to London, and sometimes on to New York from 1960. If I was going to run a sugar refinery, I needed to know how to manage our raw sugar costs. I was taking things in, and learning how to trade in sugar futures. Nobody spoon-fed me. I went to London and watched how the British firms traded, and asked questions about the mechanics. To test the wind, I might put down five or ten lots (each lot is fifty metric tons). If I lost money it wouldn't hurt me; if I made money it was no big deal. That's how I learned. By experimenting, I began to get a feel for the market.

In 1963, however, I started trading like a house on fire. I made four trips to London that year - spring, summer, autumn and winter - and on each trip I made a fair bit of money simply by trading from my briefcase out of one of the hotels. I made good money in the spring and slightly less in summer. In the autumn, I made a killing, after staring disaster in the face for four weeks. In December, I made almost as much as in the spring, until, at the last minute, a couple of traders sobbed on my shoulders and I forked over part of my profit in sympathy.

Overall, I made a net cash profit for the year equivalent to 14 million Malaysian-Singapore dollars (the equivalent of just under US$5 million). It was a lot of money: Before that, Kuok Brothers' entire capital was about five million Malaysian-Singapore dollars at the very most.

After years of remaining stagnant, with sugar prices stuck in a range of £22-28 a ton, 1963 brought a rising market. But the market did not only go one way.

In the summer, I had been buying, and the market had gone up in my favour. I found myself sitting on a profit of £50,000; then £100,000. At the end of the summer, I got very bullish. I told my manager in Singapore, "Buy, buy, buy." So we were long in Singapore, with about 20,000 tons of physical sugar. I was also long on futures. My average price was something like £35 a ton. The market was around £40. Suddenly, the price collapsed to £33 and looked like going lower. I could have been wiped out if it had gone down much more. Every trader in London was caught wrong footed; nobody wore a smile.

I sweated another ten to twelve days. Meanwhile, the market had descended to about £30 before moving sideways, marking time until, in September, Hurricane Flora started to move across the Caribbean. One of the deadliest storms on record, it hit Cuba (then the world's largest sugar exporter) and severely damaged the sugar crop. The wires were buzzing, the telex machines were going, and sugar took off. For ten or more trading days sugar prices soared, all the way up to over £60 a ton. Of course, when it went up to £48, £49, £50, I was taking my profit. That trip, I ended up making the most money in any short period of my life.

I also made very good money in London during the first two weeks in December. The markets were up because another hurricane was about to hit Cuba. On a Friday, I cleaned up my book and made a reservation to return to Singapore at noon the next day. At 4 pm on Friday, I got a call from one of Woodhouse Drake's senior traders. "Robert, I'm stuck. I wonder whether you can bail me out."

I said, "What's up?"

He replied, "I fulfilled an order for a client who has now reneged on me. I'm only an employee, so I have to cough up the money from my own pocket. Do you think you could take this position from me?" They make up stories to stoke your sympathy. I agreed to take it off him - big-hearted Kuok.

On Saturday morning, when I was about to leave for the airport, another broker called me for help. It was not my wish to leave London with an open position, but Chinese are sentimental people. I had done well in spring, summer, autumn and December. I did the deal.

I should have liquidated then, taking a chunky loss. Instead, I stubbornly held on and the loss swelled by two to three times. I must have lost about £150,000 in those two deals. So, I forfeited a goodportion of my profit from the December trip by helping two friends

My success in the sugar market in 1963 was due, firstly, to my grasp of the English language and English culture. I adapt like a chameleon to the particular society in which I am at the moment operating. I had grown up in a British colony, with English schoolteachers. When Father received army contracts after the war, I met many army officers - British, Australians and New Zealanders - with whom I became friendly. When in England, I could blend in quite well - except, of course, for the colour of my skin, eyes and hair.

I further won favour through the public-relations skills I inherited from Father. Even as a young immigrant from China, he was extremely popular with the Malays and the ruling circle of Johor. Good social skills are a necessary part of life, but it must emanate from good will in your heart. There I was in England, making friends and, as Dale Carnegie would say, influencing people. Having made friends with all the major sugar brokers in the City, I was wining, dining and spending money like water on them. It was good public relations as only a Chinese knows how, practicing thrift on yourself, but generosity toward your friends.

To be a successful businessman, you really need to brush all your senses every morning, just as you brush your teeth. I call it "honing your senses" in business: Your vision, hearing, sense of smell, touch and taste. All these senses come in very useful. I would go into a room and spot everything in the twinkling of an eye. If there were more than twenty people, then maybe it took me a few moments to size everyone up. But if there were only six, I would immediately know what was going on. I could sense tension or camaraderie.

Success in futures depends on your feel for the market, your instincts and rhythm. I would talk to different brokers. Each company had bright, young English traders. One or two would be a little cunning, but, by and large, the British are straightforward. I felt every man had his lucky hour or day, and his unlucky hour or day. I would go and chat with all of them.

I would go to Woodhouse Drake for about twenty minutes, then say, "See you," and hop across to Golodetz. Then I'd visit ED&F Man, before calling on one or two more firms. I would think, "Today is Keith Talbot's lucky day or Roy Taylor's lucky day." I would ask a question or two, "How would you trade today?" If Roy Taylor said, "I'd go long," I'd follow him. Three times out of four it worked. I just backed the man I felt had a good hunch - the best judgment - that day.

I never read charts. I don't believe in them. To me, charts are post-mortems, like dissecting a corpse. No chart can tell the future. Charts are another weapon in the brokers' armoury, luring more cannon fodder into the trade.

I kept statistical facts at the back of my head, and constantly updated my knowledge. When Hurricane Flora hit Cuba, I made my own intelligent guesses as to how the market would react. You must not be buying when everybody is buying, and you must not wait to sell until everybody is about to sell. You have to be two or three jumps ahead; one jump may not be enough.

I also benefited from the British class system: they didn't talk to one another. These were full-fledged brokers, full members of the Sugar Terminal Association, while I was just an associate member. Every top trader in these five or six firms was fully abreast of the market - I could be two hours late. If they really communicated well with each other, they would have taken me to the cleaners. Luckily, they didn't talk much. If you came from such-and-such college in Oxford, and the other guy came from an inferior college at Oxford, or Cambridge or Nottingham, they weren't going to talk with you. I could talk with all of them, since I was not part of the system. Once, when visiting Golodetz, I heard them say they couldn't sell a cargo of Polish sugar. I took the lift down, rushed across the street to Woodhouse Drake, and sold the sugar to them for £1 a ton profit. Everybody was happy.

That's why there will always be business on earth. Be humble; be straight; don't be crooked; don't take advantage of people. Even with all the information I had, I never took the market for a ride. I was a principled trader and they all liked me. If our margins went wrong, we coughed up the money straight away. We never argued.

There were other Asian traders in London in 1963, but I don't think anybody worked as hard as I did. The big Japanese sogo shosha were all there, but their traders were little cogs in wheels and their overlords in London or in Tokyo treated them as such. Japan is, of course, a large trading nation; but the individuals at the big companies are not skilled commodities traders. They give a deal to a Japanese firm that is related to their company, or to someone who can take them out to a nice dinner that evening. That's how they trade.

In commodity trading, the pain of a loss must hit you straight away. Conversely, the exhilaration from a big, profitable trade must be like champagne to your brain. Therefore, it must be your own capital at risk. The owners of the money in Japan are the banks; it's all a big bureaucracy conducting the trading. Of course, I am making a broad generalization; I am sure that there are brilliant individual Japanese traders. But, in my own experience, I've never met one.

Back in the 1960s and 1970s, the oceans were teeming with fish. In those days, there was only the odd shark or two, and it was fairly easy for me to fish in those waters. While volatility has not changed that much since then, there are many more sharks now. Sometimes, it seems like there are no fish in the sea - only sharks. Honours graduates in science and engineering are being recruited. PhDs are hard at work refining algorithms, and I don't even know what that means. If today's technology and speed of information had existed in the 1960s and 1970s, I would have been like a fish out of water.

I didn't depend on technology for success. People are still making money and people are still losing money, but the floor has gotten much more slippery. You have to be born at the right time.

I went to England four times for sugar trading in 1963, then two or three times in 1964, and in each year after that. Every year from 1958 until 1999, we made good money from sugar due to hard work and a bit of shrewdness. The only time that I stood at the brink of disaster was September 1963, the time that Hurricane Flora saved my hide.

One day - I think it was in December 1964 - one of the London evening papers called me "The Sugar King from the East". The nickname caught on. It came from the fact that I was one of a very few totally integrated sugar-trader industrialists in the world. We are involved in all aspects of sugar operations. But I have always felt that "Sugar King" was a misnomer.

Every time I left London and flew home to Singapore, I realized that I was like a man 8,000 miles away from the fireplace. In London, where they sat in front of the fire with the logs crackling away, they could read how many more logs they needed to add to the fire. From afar, there was no way I could out-trade any of them.

I felt the only way to trade from such a distance was through rhythm trading, a phrase I coined. If you learn to dance the tango or samba, then you know it's all about rhythm. The teacher can tell you it's left leg backwards, backwards, forwards and then sideways. But once you miss your rhythm, you've got to concentrate on the music and regain your poise. Never let anybody - not even your loved ones sitting there - say, "Robert, put your right foot out." The more any bystander interrupts or interferes, the more confused you are likely to become. Even if you make a mistake through poor timing, just by concentrating on the rhythm, you can get back into it. If I felt my rhythm was askew, I would cut back on the volume of trading so that my risk was small. Rhythm became a vital concept for me in my business career.

As a group, the British sugar traders were always the smartest and the shrewdest. The first one I met was Roy Fisher, who came out to Malaysia in 1959. I recall taking Roy, who became a very close personal friend, to a pseudo-French restaurant in Kuala Lumpur called Le Coq d'Or. Roy worked for JV Drake Ltd, which shortly afterwards merged with a coffee and cocoa firm and was renamed Woodhouse Drake and Carey. The chairman of JV Drake was Colonel Tom Drake, a direct descendant of Sir Francis Drake. Roy Fisher was number two in the white sugar department; the director in charge was Allan Arthur, a former senior British colonial civil servant whose wife, Dawn, was a member of the Drake family.

Another excellent trader who became a very close personal friend is Michael Stone of ED&F Man, a venerable broking firm dating from the 18th century. Our first meeting was in 1961, when he popped in out of the blue one day to see me in Singapore. Roy and Michael were two of the outstanding sugar traders of their day.

In around 1958, I recruited Piet Yap who traded sugar in Singapore for Internazio (previously Rotterdam Trading), a Dutch trading house. A Sumatran of Chinese origin, Yap spoke Dutch, Bahasa Indonesia and English. One day, I said to him on the phone, "Yap, why don't you quit this colonial Dutch firm. You know the sun is setting on the Dutch. Sukarno is going to drive them out. Come and join us. We are a young firm, and I could use you."

Yap could secure offers from Indonesia because he was born there. He cultivated the friendship of Sudarso, the aristocratic Javanese director of Gula Negara, the Indonesian National Sugar Board (this was before the Indonesian Bureau of Logistics, Bulog, came into existence). The country was poor and needed foreign exchange, so the government mandated that sugar be made from native plants such as coconut and sago. Gula Negara was then able to export a fair bit of centrifugal sugar from the factories in the early 1960s. Sometimes Sudarso would make offers to us.

We did our first few Indonesian deals jointly with JV Drake. I remember the first one vividly. It was a public holiday in 1962. Yap and I were working in the office when he said, "I have just spoken with Bapak (Father, an Indonesian term of respect) Sudarso of Gula Negara. He has given me a 30,000-ton offer of sugar valid for one week at a fixed price. I am calling up JV Drake on the telex now to make an offer to them. What do you say if we make five shillings a ton?" Yap was already seated in front of the telex machine and had summoned Allan Arthur to the telex in London. He was about to type the offer from Gula Negara when I interrupted, "Yap, Yap; hold on, hold on!"

I started to dictate, "We are holding an offer from the Indonesian Sugar Board of 30,000 tons sugar (we didn't disclose the price). Would you be willing to do this on a joint account with us, sharing it 50:50? If you are willing to consider this, we will disclose the whole deal to you."

Allan Arthur replied, "Delighted."

We did a few joint accounts (deal-by-deal partnerships with unwritten arrangements) with JV Drake. Drake was an established international trader; we were just learning the ropes. By running joint accounts, instead of acting as an agent, we became a principal. We get the offer; we buy, you sell, and we share the profits. Through this strategy, we strengthened the bond between ourselves - an emerging Southeast Asian Chinese firm based in Singapore - and one of the leading sugar brokers in the City of London.

These joint ventures were for export from Indonesia to Europe, the Middle East or Japan. We received the offers; Drake did the marketing. We didn't charge overheads to each other, so we both made tidy profits. If we had served as an agent and merely put across the offer, we could only have added a commission of five shillings a ton. In other words, on a 10,000-ton deal, we would earn £2,500. By operating a joint account, if we bought the sugar for, say, £20 a ton and sold it for £24 a ton, we would equally share a profit of £40,000.

One day in 1963, a request came from Indonesia to amend the terms of a sugar trade. The result would have been to reduce our profit on an offer of 10,000 tons of Java raw sugar from £20,000 to £15,000. Legally, we could have said no, a contract is a contract. But, in Asia, you don't trade only on the basis of legal documents; you trade on give and take and you place great value on friendship.

During the first one or two decades of Indonesian Independence, a lot of the trade between Singapore Chinese merchants and Indonesian Government trading bodies or Indonesian pribumi merchants was conducted on this basis. Most of the Indonesian Government officials who were in charge of their trading organisations in the early years after independence were fairly inexperienced, and they often relied on their Singapore businessmen friends to help them tailor the terms and conditions of their trade. In my chats with Allan, I remembered explaining the whole background to him. Unfortunately, on this particular occasion, he turned stiff and unyielding

When I called Allan Arthur in London, he quickly became very hot under the collar. "We don't trade like this. A deal is a deal. A word is a word."

Gula Negara had trusted us to buy sugar from them, sometimes giving us offers well over and above normal commercial terms, treating us as friends and almost as partners. Now they had got into a jam back home and were asking us for a bit of relief. We could have given way graciously, but Allan was saying, "Hey, this is not done!" In other words, when we make money it's fine; when we're asked to give up a bit, it's not fine.

I tried to make him see sense. "We share the same values as you do. But we are now talking as partners, and Sudarso has given us a helping hand all along with special offers. Can't we just give in to this request? It only involves a tiny bit of money."

Not being born a businessman, Allan went on haranguing me. I lost my temper with him. I told him, "Forget it, Allan! This is my last deal with you!" I felt I could not go on doing joint ventures with him on this basis. Every time something came up, I would feel as if I were a criminal to broach it. So I made a deliberate decision to switch future deals to ED&F Man and Michael Stone, who happily embraced me with both arms. I may have been brutal in my actions, but I have always acted based on fair play.

Allan was a lovely gentleman, a very straight, upright, honourable ex-colonial senior civil servant. Although I chose to no longer use Drake as my London partner for my Indonesian sugar deals, nevertheless, I continued to have a very friendly relationship with Allan and his wife Dawn. Allan was truly a perfect gentleman.

So, 1963 was really the year that I became an international sugar trader, literally trading out of my suitcase from hotel rooms in London. And from 1963, Michael Stone and I became very close friends. A major reason we became close was that most of the other important sugar traders were commuters, meaning that they lived 30-60 miles from the City of London. As soon as trading closed, they very quickly finished off their paper work, shut their desks and headed for the railway station.

Michael was a bachelor. His parents resided in Surrey, but he lived in a flat in Empire House, not far from Harrods. Two or three times a week, he would come to my hotel room after work and we would go out to dine together. We talked endlessly and our friendship quickly flowered. We would talk about everything from sugar, to English politics to Chinese culture.

The only sad part for me was that I could not enjoy his company on weekends, as he would always go back to Surrey. My trips to London averaged about three weeks each, and weekend evenings were particularly hard for me. I'm not one of those lone wolves who enjoy going by myself to nightclubs, and you can do just so much walking in the park, reading in the hotel room or watching TV It was a great relief for me when, in later years, I often joined Michael in Surrey. I would motor out and he would take me to play golf in St Georges Hill in the beautiful English countryside.

I can honestly say that much of the goodness in Michael, much of his knowledge, his skill in sugar trading and his views on the sugar market - and mine - rubbed off onto each other. There was a tremendous two-way flow, a cross-fertilization, which we both enjoyed immensely. For example, we both did our homework in analysing sugar production and consumption figures. We discussed the different ranges in statistical studies, and analysed the clues as to whether the market would go up or down over, say, a three-month period.

We shared, I think, an amazing ability to spot the important, relevant information. The information is all there; it pours out. The key is your ability to wade through thousands of words very quickly to spot the important points. If he missed something, I would pick it up; what I missed he would pick up. I would give him a call from Singapore or from my hotel room in London and say, "What do you think of this bit of news, Michael?" He'd give his interpretation and ask for mine. Quite often we held the same views.

I realized that in the trading world, if you meet a good sparring partner - and I had met one - the ideas that can flow from the relationship are amazing. It's highly creative. Michael Stone was, more than anyone else in his office, like me. He had the same fast reaction time, impatience and sense of speed and urgency.

Over time, Michael developed in style, forcefulness and temperament. But there was one key difference between us: Michael did not have the authority to trade at the speed and volume that I had. At ED&F Man, he was part of a team; I operated very much as a single trader, taking much bigger risks.

Of course, I didn't know what their book was; neither did they pry into mine. A book means what I call the OP, the Open Position. Are you net short or net long? You may have a long position here and a short position there, but at the end of each day you must know whether you are net long or net short. If you were net long and that day the market rose, you were smiling; the market was running with you. But if you were net long and the market fell, then you were a bit gloomy. If the market went much further down, you would be asked for margin calls. If you had an overweight position and the margin was a big one, you could even be bankrupted.

By the mid-1960s, Michael and I had developed a regular routine. After my plane landed in London in the morning, I headed straight for the public phones in the carousel area to call him while I waited for my check-in luggage to arrive. Once, he said, "There's a lot of activity today, Robert. Can you drop your bag at the hotel and come straight in? We've just sold 66,000 tons to Chile. If you come in fast enough, I may be able to persuade the other partner, Tate & Lyle, to cut you in on the deal."

I put the phone down, grabbed my bag, and hailed a cab, "Dorchester, please." I dumped my bag at the hotel - the concierges all knew me - and continued in the same taxi to the City. The trip from the airport took an hour and a half. I entered Man's office and Mike said, "Come, come, come. We'll go into the conference room now Alan [Clatworthy], Tim [Dumas], here's Robert. What do you say we cut him in one-third?"

One of them said, "Well, but we ought to get Gordon Shemilt's or Mike Attfield's agreement in Tate & Lyle."

So they called them up and they said, "If it's Robert, okay; one third each."

I recall that this 66,000-ton trade made about £30 profit a ton, as they had sold it at about £60, while they covered it at about £30. It was for delivery many months forward. When sugar is short in the market, people panic and buy, just like in the stock market. So we made a lot of money. If we earned £30 a ton, then we jointly made nearly £2 million from the deal. My share alone was more than £660,000, in excess of $5 million Singapore dollars, just because I arrived at the right time.

With Michael, I never had to say, "Aren't you taking too much of the cake?" Nor did he have to ask the same of me. We had a common understanding; there was no difference in nuance. Nobody could hide and say, "I thought you meant this or that."

The give-and-take spirit between Kuoks in Southeast Asia and Mans in London was simply amazing. We were people of similar character: Traders who trusted each other and never harboured treachery, selfishness or greed. In fact, it was a virtual partnership. They ran their firm, we ran ours; but in those joint-venture deals we prospered together.

That's the way you keep people happy. If you have a selfish or greedy streak - or a mean streak - and you try to fool your partner, everybody can smell it. A dog that senses hostility in you will go for your heel straight away.

Of course, I was very generous as well. When I had a good deal, I shared it with them. Say somebody gives you a lovely plate of food. Instead of gobbling it all down you say, "Come on, take half of this." Then he, in a similar vein, repays the act of generosity, and that goes on and on. You now have a fusion of real, genuine strength versus the rest of the market. You needn't fear a hidden sword stabbing you in the back. We even got to the stage of forming reversible cable addresses with our three British partners: MANKUOK, GOLOKUOK and KUOKDRAK (Man and Kuok, Golodetz and Kuok, Woodhouse, Drake and Kuok).

The non-British partner we became closest to was Maurice Varsano, by far the ablest of the French sugar traders. I met Maurice a Bulgarian Jew who ended up in France by way of Morocco - in London or Paris in the mid-Sixties. We hit it off and, from the late 1960s, we entered into joint accounts with his Sucres & Denrees (Sucden), along with Man, Tate & Lyle and others.

Our trading strength in sugar was physical buying and selling in East Asia. Our European partners were stronger in the West. Our greatest strength was the Malaysian market. When I started trading sugar, the Malaysian market was 400,000 tons a year. Malaysian consumption by year 2000 had tripled to 1,200,000 tons.

I travelled alone on most of my sugar trips to London. But, starting in about 1969, I began taking my colleague Richard Liu on virtually every trip. I wanted his company partly to help me, and partly as I felt that it was time to clone someone who could take over from me one day. My brother Philip recruited Richard for MSM in 1964, upon Richard's graduation from the University of Malaya. When I became involved in some of the day-to-day work at MSM, I got to know Richard better. As he was brighter than most of the other young men on the trading side of the refinery, I realized that his talents would be wasted sitting in Prai on the remote northwest corner of the Malay Peninsula. He relocated to Kuok (Singapore) Ltd and soon began covering the London end. Richard was like a mirror image of me, and was fully acceptable to the London brokers.

In the early 1970s, I could have moved to London and become a full-time trader if I had wanted to. I was in Man's office one day with Tim Dumas, the most senior partner, Alan and David Clatworthy and Michael Stone. They said, "Please, can you come into the conference room. We have something serious to discuss with you." Their body language was very warm and open. They made an offer. "Robert, we've had some serious talks here. We have decided that we would very much like you to become a partner. Today, we are offering you one-quarter of ED&F Man." I think the price was £5 million.

I had the feeling that the average English partner only wanted to work until age 55 or 58, so Tim Dumas was getting close to retirement. I figured that when one partner sold shares - and it would always be in a rising market - the others would not always be willing buyers. I might end up being the only one buying, and very soon I would be in control of the firm. That would necessitate my moving to London. My reply to them was, "Let me think it over. It's very kind of you to make me this offer. However, I want to consult my fellow directors back home."

I talked to one or two of the directors, and they responded, "Nien, you do what you think is right." I then communicated with Michael and Alan. I told them, "Thank you all for the offer. You know, businessmen are regarded as rats in a rat race. Therefore, if I am a rat then my sewer is in Singapore." Those were my exact words. For better or for worse, Singapore was still my home.

In the early 1970s, I had a phone call from Hong Kong asking me to go there urgently. The market was abuzz with speculation that the Chinese sugar crop had failed and that China needed to import a large block of sugar. The Cultural Revolution had been raging since 1966. They asked me to go alone, implying that I should not even bring Lim Kai, who had accompanied me on all previous trips to China.

I met two senior officers of Wufenghang: The older man was Pu Jinxin and the younger one, Lin Zhongming, the future Chairman and CEO of COFCO. By then, I had been trading with Wufenghang for about ten years. We chatted on the phone quite a bit. They said they couldn't see me in my Hong Kong office; they wanted to meet in a more discreet place. I suggested we rendezvous at my Hong Kong apartment in Repulse Bay Towers, which I had bought in 1967 when many Chinese had fled Hong Kong following the riots that year.

The three of us sat down together. They first looked at each other. I later realized why: in opening their mouths, they were putting themselves at my mercy. They first spoke a lot of platitudes, "We've worked together for 10 years. We know you; we trust you fully. We don't know who else to trust."

Then they got to the point. "China is desperately short of sugar. In a few months we will run out. You must buy for us. We have cleared it. We have a mandate to request you to be the sole supplier." However, they had a problem. Being in the midst of the Cultural Revolution, China had little foreign exchange to pay for imports.

"We have also learned in our dealings with you that you are very active in the futures market," they continued. "We don't fully understand that market. Can you help us earn foreign exchange for the nation from the futures market?"

I answered, "Everything you have told me and requested of me is logical. But you must know that the minute you told me that China is short of sugar, I could betray you and go out and make a lot of money for myself in the market. However, since you have been honourable and confided in me, I will return the honour by now announcing to you that I will stop trading for three months. I will freeze my positions and devise a scheme to buy the sugar." I added, "The world is heading into a period of shortage. I believe that the only nation that has sufficient surplus to supply you today - and where we can hit the market while it is a bit asleep - is Brazil." We chatted for another hour, had dinner and I flew back to Singapore.

That same night, I started to accumulate futures positions on the London and New York markets on behalf of China, but all in my books. All the trading was conducted at night: London traded with us from about 5 pm to midnight Singapore time, and then New York would trade from 10 pm to about 3 am. I couldn't show my hand too much and place huge orders, so I gradually accumulated positions every day for three weeks. We placed the trades through different brokers whom I knew scarcely compared notes.

Every morning, one of my assistants or I would call up Hong Kong and report to Wufenghang in coded language: say, 20 at what level, meaning we had bought so many lots at what level during the previous night's trading. So they had a record, but we kept nothing in writing. I told them I wanted total secrecy.

Meanwhile, my people flew to London because we didn't want it to look like a Hong Kong/Singapore operation. From London, they contacted the sugar-export monopoly of Brazil, Institute of Sugar and Alcohol, headed by a Senor Watson. We had an agent in Brazil who was of mixed Brazilian and Scottish blood. We told our agent to ask Senor Watson if he was prepared to trade with us directly, not through a London or New York broker. Because of the futures involved, I sensed that there was a risk that London brokers would open up a separate front to trade for themselves. The answer came back positive, so one hurdle was crossed. Piet Yap, James Lim and one other assistant from our firm went to Rio de Janeiro to negotiate.

At this same time, a major international sugar conference was taking place in Geneva. I decided to attend as a decoy. I landed in Geneva and, on my second day, a sugar trader came up to me at the conference. He said, "Oh, Robert, have you heard? There are some mysterious Japanese in Watson's office."

"Oh, that's interesting," I said. "You know, there are lots of Japanese companies and I suppose some of them have made good money and are moving up."

Scarier still, the next day, I was paged through the intercom while I was in the conference hall listening to some discussion: "International call" - luckily they did not say from Brazil - "for Monsieur Robert Kuok."

I went to the phone booth and an operator in Rio de Janeiro connected me. My team wanted guidance on price. I said, "I don't think the secret can be kept very much longer. They're getting very close to the scent here. Close it! Don't bargain for shillings!"

China had given me a mandate up to such-and-such a price. I bettered it for them. I think the tonnage involved was 300,000 tons, which at that time was a large block (today you have to buy a million tons to be a big block). Then, our people gave the Sugar Institute the true picture: the sugar was for China. They were delighted, as they saw the opportunity for large-scale trade between Brazil and China.

We told the Brazilians that we wanted to use Ban Thong, my Hong Kong trading company, rather than Kuok Brothers. They agreed and offered Ban Thong a half-percent commission. Once the deal was signed and announced, the market went through the roof. Over the next three days, I sold all the futures that I had accumulated and kept the profits with the Bank of China (London). I think I handed China about £2,500,000 on a plate, just from the futures. Why? I love China. What do you want money for in life? If you can help a nation, surely it's more satisfying for your heart and soul than just making money for yourself. Our Brazil-China deal was a market coup. The next day, everybody was knocking on China's door.

Not long after this, COFCO gave me a firm bid to buy raw sugar from the Philippines. The bid was valid for three or four days, which was an unusually long period in the trade. China had never before approached anyone and given them a direct bid like this. I felt it was in part a reward for me, demonstrating their gratitude for my role in engineering the Brazilian sugar deal.

But this took place during the reign of Ferdinand Marcos in the Philippines. I detested the Marcos regime. In the early days of his rule, I had met Singapore and Malaysian-Chinese businessmen who kept telling me that Marcos was extremely corrupt. I didn't believe them. I had swallowed some of the stories churned out by gullible foreign journalists who had been wined and dined by Marcos and his cronies.

We tried to do business with the Philippines and soon learned that for every pound of sugar you wanted to sell to or buy from the Philippines, one and a half US cents a pound had to be added on for Marcos and his cronies. One and half cents a pound! To put this in context, an efficient producer such as Brazil or Australia was producing sugar at about seven to eight cents a pound. Prices sometimes went as low as two and a half cents a pound. It stank to high heaven!

When the Chinese extended me their offer, I contacted the Philippine sugar-selling authority. We were told to contact Roberto Benedicto - Marcos' front man on all sugar deals - in Tokyo, where he was serving as Philippine Ambassador to Japan.

Richard Liu contacted Ambassador Benedicto and chatted with him on the phone. Benedicto invited us to visit him in Tokyo. All this was on a very urgent basis, so Richard and I caught the next flight and had a good meeting with him in a hotel on the outskirts of Tokyo. He contacted his boss, Marcos, and we waited a day or two without making any headway. I felt quite deflated and disappointed. We flew back to Hong Kong, and the Ambassador promised to phone or cable us.

Within a day or two his answer came: "Sorry, we have nothing to offer you." A few days after that, we heard that the Philippines had traded sugar with someone else. So it was pretty apparent to me that although they were sellers, the Philippines was picking and of choosing whom they wanted to sell to. I felt very badly let down by Marcos and Benedicto.

In the early 1960s, we were also buying sugar from the Soviet Union. Then, from the late 1960s, the Russians turned to become net annual buyers of sugar. They have remained big buyers ever since, and Russian buying is the largest single event in the sugar world every year.

I went to Moscow for the first time in 1972 with Charles Kralj, a senior trader at ED&F Man. Kralj was originally from Yugoslavia. He told me that one day during World War II, the German Gestapo came to his home. He jumped through a window at the back of his house and started running. He walked, hitchhiked and rode on trains and boats until he made his way to England. After the war he joined Man.

I got to know Charles Kralj in 1960 on one of my early trips to London. I was taken ill one night and Charles, who was visiting me in my hotel, cared for me. My friendship with Charles blossomed, and later he arranged to take me to Russia to meet with Prodintorg (the Soviet equivalent of COFCO in China), which held monopolies on imports and exports of commodities like sugar and horsemeat.

The chairman of Prodintorg was a man named Alexeenko; his right-hand assistant was Madame Gaidamoscka. As a very young woman, she had been sent by the Stalin regime as part of the Lend-Lease team of Soviet officers to be stationed in the United States, where she had picked up some English. Alexeenko and Gaidamoscka were both lovely people. They were trustworthy almost to the point of being naive - not stupid, but just very solid people of high integrity. In none of our trades with them was there ever a whisper of a shady deal.

The Russian trades always involved gigantic quantities that created huge waves, rocking the market. Thus, there was a natural tendency to syndicate the deals, and our joint accounts with ED&F Man, Tate & Lyle and Sucres & Denrees came in useful. We would sell and then buy big blocks of physical sugar or sugar futures to cover our sales to the Soviet Union. We bought futures to cover our risk or ran an open position. Man handled most of the trading, and within Man the chief players were Michael Stone, Alan Clatworthy, David Clatworthy and Charles Kralj.

I remember one funny encounter with the Russians in London in the early 1970s. I had taken an overnight flight from Singapore. After showering, shaving and freshening up, I decided to eat an early lunch. I went to Chuen Cheng Ku, a Chinese restaurant in Chinatown, with two or three of my colleagues. We ordered the food and started to eat.

As I dipped into my meal, I looked up and, at a small table about 15 paces away, I saw Madame Gaidamoscka and her boss, Alexeenko. I thought, "It cannot be them" - even though I had taken Madame Gaidamoscka to this restaurant before.

I would always call ahead and have a chat with my London friends, especially Michael Stone, before getting on the plane to London. There hadn't been a word from Mike about the presence of the Russian buyers. I felt very confused.

Madame Gaidamoscka looked up and our eyes met. She made a sign of recognition. I said, "Madame," got up and quickly strode across the room and shook their hands very warmly. "How are you?" I asked.

The way she behaved gave the show away. She said, "Don't tell anybody I am here. We are just here on a short visit." Everything they volunteered indicated that it was a secret trip. They appeared very embarrassed even to see me.

I finished my meal and went immediately to the City to see Michael Stone at Man. I confronted him. "Mike, why are you keeping all this from me?"

He was genuinely perplexed: "What do you mean, Robert?"

"Surely you know Madame is in town."

"Madame, which Madame?" "Madame Gaidamoscka."

"What? Surely you are mistaken, Robert."

"What do you mean by mistaken? I just shook her hand and Aleexenko's."

Then I saw all kinds of question marks on Michael's forehead.

Michael very soon traced them to where they were staying. They were creatures of habit. You knew where they usually stayed and, in those days, hotel staff could be quite unguarded. Alexeenko and Gaidamoscka were both very frank and upright people, and Michael got it all out of them quite easily: Russia was badly in need of sugar so the Russians were in town to buy. They had contacted Czarnikow first on the telephone. Czarnikow enjoined them to secrecy, warning that otherwise they might not be able to get a proper offer out of Australia for them. The Russians were to come straight to the Czarnikow office on arrival in London. Unfortunately, they just liked Chinese food too much.

The Soviets were honourable in their sugar dealings; but not so the North Koreans. We had a very nasty experience with North Korea. They had opened a kind of consular office-cum-residence building in Singapore. Every so often, they would invite us for a simple dinner and then show us North Korean military propaganda films. Once, the day after one of these encounters, they suddenly appeared at our office and said that they had 7,500 tons of sugar to sell us. I think that they had received aid sugar from Poland or somewhere else in the Communist bloc, and they were very short of foreign exchange.

We sold the North Korean sugar to Maurice Varsano of Sucres & Denrees. But when it came time to open our letter of credit, North Korea asked for an extension: "Sorry, our goods have not yet arrived at the port of shipment. Please grant one month's extension." So we negotiated with Maurice. He agreed to a short extension. We went back and extended the letter of credit. Later the Koreans said, "Sorry, we still don't have the sugar; some more extension."

Then Maurice balked. He said, "No, I am not dealing with the North Koreans. I am dealing with you. You are my principal, so you honour." We had to cover the trade. By that time, the sugar price had gone up £15 to £20 a ton higher than what we'd paid the Koreans. We had to buy in the open market and deliver the sugar to Maurice at a large loss - he'd cleverly bought from us at cost and freight. The North Koreans never delivered and they refused to pay demurrage, though theoretically they were required to by contract. We took a great risk hoping to make one or two dollars a ton, and ended up losing quite a large sum of money.

I remember the North Koreans' last cable to us: "We agree that we have been unable to deliver. We will explain our reasons in arbitration court. Please come to Pyongyang to pursue your claims." I kissed everything goodbye and threw that cable into the wastepaper basket.

I made half a dozen trips to Cuba, the first in 1970 with my friend Roy Fisher of Woodhouse, Drake. My experience with Cuba was bittersweet. I met a Cuban named Emiliano Lescano for the first time in London in the late 1960s, and we took an immediate liking to each other. He was then number two man in Cubazucar, the government body in charge of marketing sugar. Cubazucar reported directly to the Minister of Foreign Trade, a Senor Cabrisas, a senior man close to Castro. Soon after I met Lescano, he was appointed President of Cubazucar.

Emiliano Lescano made his mark on every sugar trader from the 1970s to the early 1980s. In Japan he was known as Mr Sugar. He bargained and negotiated with all the figures and statistics of his nation at his fingertips. He never referred to notes. For a young man of about 26, he was a genius of a trader. He never lost his cool.

Lescano was a handsome, graceful, charming man with twinkling eyes. In addition, he was very well built. I remember taking him to the Copacabana Nightclub in Tokyo. At the Copacabana, Lescano was just liquid flowing all over the floor, whether it was a tango or a rumba. The Cubans really have music in their blood.

Then Lescano started to hit the bottle. I could always sense he was under a lot of stress. The American embargo on trade with Cuba made it very difficult for the country to make any sort of progress. Cuba's sugar mills had been established mainly by American interests. When the supply of American machinery and spare parts was cut off, the Cubans went to Eastern Europe and the Soviet Union for equipment, but it was inferior. The Cuban mills were inefficient and often in disrepair, and their sugar industry went into a long, downward spiral. At one time, they produced six million tons of sugar annually, but it later became an almighty struggle for Cuba to make even two million tons. Countries such as Brazil, Thailand and Australia stepped up sugar production while Cuba's production shrank.

Given the circumstances, the man entrusted with marketing the nation's sugar was naturally under a lot of pressure. I think he was expected to do wonders, to create miracles. But he was not a magician. He also had marital problems. Either his wife, a major in the Cuban Army, or the woman he fell in love with, a colonel in Cuban Army Intelligence, fixed him. The Cuban Government lost trust in him.

Lescano hit the bottle harder and harder. My sugar friends who frequented Cuba, including Michael Stone, relayed the news. We heard that he was no longer head of Cubazucar; then we heard that he was jobless; that he was punch drunk, brain sodden; that he had fallen to the level of a beggar. And then he was dead.

When I think back to that lively young Cuban, I am filled with great sadness. This was a tragic story of a man who was just born at the wrong time in the wrong country. He was an upright, honest young man. In his job, he could have made a fortune and run away from the country, claiming political refuge. But there was never a breath of disloyalty to his leader or to his country. He loved his Cuba.

I finally met Fidel Castro in 1990. One evening, I was with a group of sugar traders at a beachside bungalow in Havana. We were casually attired in short-sleeved shirts and slacks. Suddenly, a car drove up and a couple of men jumped out. They shouted, "El Comandante is waiting to see you all. Please get ready." There was no time for us to change our clothes. The eight or nine of us were bundled into two or three cars.

Castro rambled on from about 10.45 pm until 4 am or so. He told us about his cattle-raising and biochemistry and all sorts of things. He had all the air-conditioners going full blast. I think the temperature must have been lowered to 13°C. He wore about three thick cotton tunics while we shivered. It was terrible! At about 3.30 am he sent for brandy. Did I down it in a hurry! It was an awful experience.

Sugar gave me the busiest time in my working life. It started in 1958, and it didn't really ease up for 35 years. From 1963, every year I made at least two or three trips to Europe and America, trips to Japan, the odd trips to Australia, and shorter hops around Southeast Asia. I was seldom home for more than a week, and I hardly saw my five eldest children grow up. I employed trustworthy people who could look after the shop while I was off like a kite, flying here, flying there. I recall that, at one stage, I never slept in the same bed for two straight nights over 20 consecutive nights. I certainly was not doing it for heroics or fun. The business was just such that I had to keep on the move.

When I was young, I used to go to acrobatics shows. It always amused me to see the man juggling balls. From the mid-1960s, I felt as though I was a juggler in the business world. I would look in the mirror and say, "Today you've added another ball and you're now tossing eight balls in the air." By 1964, you might say I was juggling three sugar balls: Refining, imports into Malaysia, and international trading. By the mid-1960s, even before sugar had hardened, I was already juggling new balls in plywood, flour milling, shipping, aviation and steel. [pg 142-168]