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Buying truffles at Richerenches, France’s largest black truffle market

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Much has been written about black truffle hunting in the French countryside, where Perigord truffles, or tuber melanosporum, thrive below oak and hazelnut trees.

But little is discussed about how these “black diamonds” are traded before they reach the hands of fine dining chefs around the world.

The interior of a black truffle is lined with white veins which darken with age.

Courtesy of Plantin

If the very thought conjures up images of tightly organized auctions — the likes of bluefin tuna in Japan’s Toyosu Market, for instance — a trip to the village of Richerenches with Christopher Poron proves otherwise.

Truffle hunts and trades

But first, how are truffles found?

These black diamonds in France are often found using dogs that are trained to locate the pungent fungi under the ground.

Poron is the president of Plantin, one of Europe’s largest traders of black truffles. The company supplies black diamonds to award-winning restaurants in Europe and Asia, including Odette in Singapore, named No. 18 on San Pellegrino’s World’s 50 Best Restaurants List in 2019.

“Richerenches is the biggest market for trading black truffles in France,” said Poron, who added that the southeast of France — where Richerenches is located — has been the largest producer of truffles in France since the 1940s.

A golf-ball sized nugget weighs just one ounce but can easily retail for $60.

During a “good harvest,” more than a ton of truffles can be traded on a single Saturday morning, said Poron, though a normal harvest is estimated to be slightly more than half this amount.

Truffles vary by size, but to get an idea of the price, a golf-ball sized nugget weighs just one ounce but can easily retail for $60.

“In the past, most of the buying of truffles was done through brokers,” said Poron. “These brokers would mostly meet the truffle farmers in markets like Richerenches.”

France’s largest truffle market

Indeed, since the first truffle market took place at Richerenches in 1923, the medieval village has evolved to become the country’s biggest annual truffle market. Ten to 12 tons of truffles are traded here every year.

Held every Saturday morning from November to March, the annual truffle market is an organized mess of mom-and-pop sellers (the farmers) proffering their goods to professional buyers (brokerage houses and truffle houses like Plantin) as well as the general public.

Richerenches truffle market.

Courtesy of Plantin

The Richerenches market is held on two streets: the main street, which is lined with stands selling truffles and truffle products to consumers, and a second street reserved strictly for professional buyers.

Trading on the professional street takes place from parked cars and vans. Buyers open their trunks to indicate they are ready to buy, and sellers walk from car to car showing off their weekly harvest. Truffles are weighed and purchased directly at the car and placed in the buyers’ trunks for safekeeping.

An open car trunk signals that a buyer is ready to purchase truffles from local farmers.

Courtesy of Plantin

“The farmers come with their harvest. The price is set according to quality and what the buyer is ready to pay,” said Poron. “Once agreed, the farmers get paid mostly in cash.”

The truffle farmers

While Plantin has a history of buying from brokers and farmers, Poron confesses that 90% of the company’s purchases today are directly sourced from farmers.

A line forms at an open car trunk at the Richerenches truffle market.

Courtesy of Plantin

The French farmers who sell their black diamonds to Poron at the Richerenches market are mostly vineyard owners, not professional truffle farmers as in Spain or Australia, since revenue from planting grapes for winemaking in France is perceived to be “more certain” than that of truffles.

Truffles are fragile, and climate dictates the health of each harvest.

“Black truffles need rain and a milder weather that’s not too cold,” said Poron.

‘No such thing’ as discounts

Unlike commercial transactions — where bigger volumes tend to attract lower prices — economies of scale don’t exist in the truffle trade.

“There is no such thing as getting a better price if I buy all the truffles or more quantities from each farmer,” he said. “In our business, we have to take care of our customers — not just the chefs, but also the farmers. If we don’t, they will sell their harvests to someone else.”

Truffle weighing and payment is done at the car trunk.

Courtesy of Plantin

Plantin started planting black truffles in a 50-hectare truffle farm in another region of France several years ago. The farm is starting to bear fruit, but in minute quantities. With a harvest that averages 33 pounds a week so far this year, the truffle house can hardly be considered self-sufficient.

“We will never be able to depend solely on our own farm production because of the huge volumes we trade,” Poron said.

This is what makes the local farming community, and hence the Richerenches market, so important.

Thanks be to truffles

One of the most vaunted truffle events of the year — the “la messe de la truffe” or “the truffle mass” — is held in Richerenches on the third Sunday of every January. Held at the village church, the special mass is devoted to Saint Antoine, the patron saint of truffle farmers.

First held in 1952 by Richerenches priest Henri Michel-Reyne, the truffle mass was a way to restore the town’s church, which was in “bad shape,” said Poron.

Truffles on the alter in Richerenches.

Courtesy of Plantin

In 1982, a black truffle brotherhood — made up mostly of truffle brokers and farmers — was created. Every year since, the brotherhood, in full ceremonial garb, comes together to pray for a good harvest.

The annual truffle mass, where black truffles are donated to the local church.

Courtesy of Plantin

The highlight of the truffle mass is when the offering basket is passed around. Instead of cash, nuggets of black diamonds are donated and auctioned off in honor of the church.

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Father of Wall Street’s ‘fear gauge’ sees wild volatility continuing until coronavirus cases peak

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The Cboe Volatility Index (VIX), has become one of the most widely watched indicators of market sentiment in the world. 

In theory, it works on a simple principle: It is a measure of the stock market’s expectation of volatility over the following 30 days based on near-term S&P 500 index options, both puts and calls.  The higher the number, the greater the expectation that market volatility will be higher over the next 30 days. 

This week, despite a massive rally that saw the S&P rise nearly 20% from its Monday low to its Thursday high, the VIX remained stubbornly high, in the 60s, all week. These are levels that have been rarely since its inception in 1993.

Robert Whaley is often referred to as “the father of the fear index.” He is the director of the Financial Markets Research Center at Vanderbilt University.  He spoke to me by phone from his home in Nashville.

 What is the VIX telling us now?

“The VIX measures expectations of volatility 30 days out.  Right now, with the VIX near 70, the index is saying that the intraday swings on the S&P 500 will be 4% to 5% on a daily basis, which is an awful lot of volatility.”

What would it take to bring it down, let’s say to the 30s?

“We need to reduce the uncertainty level.  The S&P has been swinging in daily prices swings of 4%, 5%, 6% or more for several weeks.  The VIX is just an estimate of future volatility, so traders look at the actual volatility that is through the roof and they are naturally assuming some of this volatility will continue.”

 If the intraday swings went down to something lower, say 2% or 3%, would that calm down the VIX?

“Possibly, but the most important thing is to resolve the uncertainty, which may be determining a peak in coronavirus cases.  If you get any good news on that front, the VIX will drop very quickly.”

VIX futures are in backwardation — the near term prices, particularly the cash price, are far higher than contracts farther out.  What is this telling us?

“It tells me the volatility will be lower several months out.  For example, the April contract expects the VIX to be below 55, in May it is 45, and in June it is below 40.  A week ago, the price of that insurance on the June contract was 50.  It’s dropped 10 points.  It’s come down very quickly. The VIX is saying it will be in the 30s by August.”

Robert Whaley, Vanderbilt professor, “father of the VIX”

Source: Vanderbilt University

 So this is not going to continue indefinitely?

“No, it gets like this when you get crisis, like 1987 or 2008.  You said last week that people are not going to pay this high a price for insurance indefinitely, and you are right.  The VIX contracts are predicting the prices will drop.”

 Is it accurate to call the VIX a “fear index?”

“Yes, that’s all it is. The S&P 500 option market is driven by the purchase of put options, which institutions are using as portfolio insurance.”

 But the VIX is also moved by call options as well?

“Yes, but my research indicates that it is primarily driven by put options.  The volume of put option open interest is greater than call option open interest, and the formula that the VIX is derived from weights puts more than calls.”

 What was your role in the creation of the VIX?

“I created the original VIX in 1992.  The CBOE hired me to create a volatility index.  They wanted a product to differentiate them from an ordinary index like the S&P 500, and they wanted to create a new asset category that might be a long-term investment.” 

 It certainly seems like they succeeded.

“They sure did.”

 

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Plane explosion in Philippines kills eight, including two foreigners

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A medical evacuation plane caught fire before taking off from runway 24 of the Ninoy Aquino International Airport, killing eight passengers in Manila, Philippines on Sunday night March 29, 2020.

Photo by Dante Diosina JR/Anadolu Agency via Getty Images)

A medical evacuation plane exploded during take-off in the Philippine capital on Sunday, killing all eight passengers and crew, including an American and a Canadian, officials said.

The plane, owned by a Philippines-registered charter service Lionair, had been bound for Haneda, Japan, but burst into flames at the end of the runway around 8 p.m. (1200 GMT), Manila’s main airport said.

Indonesian carrier Lion Air issued a statement making clear that it is unrelated to Manila-based Lionair.

Video footage showed a huge plume of smoke rising into the night sky as fire crews doused the fuselage with foam.

The twin-jet West Wind 24 plane was carrying three medical personnel, three flight crew, a patient and a companion, Richard Gordon, a senator and head of the Philippine Red Cross, said on Twitter.

“Unfortunately, no passenger survived the accident,” the Manila International Airport Authority (MIAA) said in a statement.

An investigation by the Civil Aeronautics Authority of the Philippines was under way, MIAA said.

The runway has been closed temporarily, affecting an arriving Korean Air flight that was diverted to Clark airport in northern Philippines, said MIAA General Manager Eddie Monreal.

The aim is to reopen the runway about two hours after midnight, he said in a press briefing.

Monreal confirmed that an American national and a Canadian citizen were among those killed, but could not provide further detail. The six others were all Filipinos, he said.

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Moscow tightens coronavirus rules to contain spread

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People in medical masks in Red Square in central Moscow amid the COVID-19 coronavirus pandemic. Russian President Vladimir Putin has declared a week off work and urged people to stay home to prevent the spread of the COVID-19 coronavirus. Cafes, restaurants, shopping malls and parks are closed in Moscow.

Sergei Bobylev

Moscow authorities will on Monday impose tighter restrictions on residents in an attempt to contain the spread of the new coronavirus, Mayor Sergei Sobyanin said.

Muscovites will only be allowed to go out to buy food or medicines at their nearest shop, get urgent medical treatment, walk the dog or take out the bins.

Those needing to go to work will also be allowed to leave their flats, and authorities will introduce a system of passes in the coming days.

“Gradually but steadily, we will keep tightening control as needed in this situation,” Sobyanin said on his website.

Russia has been relatively lightly hit so far, with nine deaths and 1,534 cases, but it recorded 270 new infections in the past day.

Earlier on Sunday, Sobyanin said the coronavirus outbreak had entered a new phase as the number of cases exceeded 1,000 in the capital and complained that many residents took recommendations to stay home very lightly.

The head of Russia’s Orthodox Church exhorted believers to pray at home and urged people to adhere strictly to authorities’ instructions “before someone dies in our families”.

“Refrain from visiting churches,” Russian news agency RIA cited Patriarch Kirill as saying, even though Orthodox services went ahead, including one led by him.

About 60% of Russia’s 144 million people consider themselves Orthodox Christians, but fewer were worshipping in churches on Sunday and some were wearing masks, according to media reports.

Russia has halted international flights, closed borders, announced a non-working week from this weekend, and closed shops and entertainment venues in Moscow and some other regions.

Sobyanin said many Muscovites were still going out. At least 52,000 people took walks in city parks on Saturday, and many elderly people made long trips on public transport, Sobyanin said.

“The situation with the spread of coronavirus has entered a new phase,” Sobyanin wrote. “An example of miserable Italian and Spanish cities, even New York, where tens and hundreds of people die every day, is in front of everyone’s eyes.”

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