The Singapore Role as a Hub for Global Commodity Trades
Singapore has become the largest hub in the entirety of the Asian continent when it comes to global commodity trading. This is largely due to the many painstaking and dedicated hours put in by various authorities over the past two decades. The country’s trading facilities are world-class and tough to compete with. A multitude of trading companies and trading commodities has subsequently been birthed in the country, with many of the largest companies taking over the market.
Commodity Traders and Incorporation of Companies in Singapore
The physical trading of commodities in Singapore is unprecedented around the world. The main commodities that are traded in the country, widely recognized as the central trading hub of Asia, are oil, gas, Agri-commodities, metals, and minerals. These commodities are not in shortage in Singapore and, in fact, are quite prominent. Unsurprisingly, investors and entrepreneurs alike have a vested interest in the country because of the business potential that lies there.
20% of new companies in Singapore are made up of wholesale and large-volume traders who are particularly attracted to the opportunities and potential of the country’s trading exploits. This means that if someone wants to start their own business, Singapore is a great location to do so!
Benefits of New Singapore Company Formations to Wholesale Traders
Asia Becomes a Growth Engine
According to the estimates, the continent of Asia is going to become the growth engine of global trade until the near future, at least. It’s going to contribute approximately sixty percent of its average annual growth. This growth is mainly driven by the powerhouse economies of countries like India and China.
Singapore, with its world-class warehousing, logistics, and terminal facilities, is strategically and beneficially placed to fulfill it.
Tap into the Trade Route
Singapore’s specific geographical location is also crucial from the perspective of commodity trading and its traders. It hugs the sea route that’s responsible for a large amount of trade that equates to roughly five trillion dollars in total between the East and the West. All one would need to do is set up their company in Singapore and carve out a share of the current flourishing trade.
Benefit from the Strongest US Dollar Liquidity in the Asian Continent
Singapore has also gained a reputation as the third-largest foreign exchange market in the world and offers the strongest US dollar liquidity in Asia. It definitely comes in handy to the commodity traders in the value chain. Such as the big miners to the independent brokers and traders who have opted to open a company in Singapore at the seemingly right time.
High Concentration of Traders
The physical presence of a large number of traders plays a crucial role in the supply and demand chain. It drives the costs of commodities down as well as increases the supply. It gives traders and commodity players much better security and hedging opportunities.
Dilute the Risk
Singapore also offers commodity traders a much-less risky and unstable commodity price. The Singapore Exchange allows traders to hedge positions and holdings with commodity derivatives swaps.
A Qualified, Motivated, and Encouraged Workforce
The rise of Singapore as a popular global commodity trading hub has also been at the forefront of the new demand for more professionals in this domain. As it continues to attract professionals from all walks of life, commodity traders find it easy to recruit highly qualified English-speaking professionals. Singapore, in 2013, employed approximately 14,600 professionals.
A Valued Commodity Trading Hub
The businesses place a high value on Singapore’s political stability and neutrality. In 2015, it was ranked at the very top of the Ease of Doing Business indicator. The country’s ability to retain a triple-A credit rating even in the most sluggish global economy has also been appreciated. That rating is important for volume traders because it brings the cost of inventory down.
According to IE Singapore, in 2014, the country managed to post a total commodities trade turnover of over one trillion dollars. That is three times the turnover Singapore posted in 2009. Global commodity trading has yet to reach its ceiling, and the chances are that it will keep on growing. There is still time for die-hard business traders and investors to incorporate a business in Singapore and outshine the competitors.
Conclusion
While there are many centralized trading hubs around the world that serve as commodity centers for physical trading, Singapore is right up there with the largest and most developed countries around the world when it comes to global commodity trading. The future, while not always certain, is quite bright and optimistic for the country of Singapore and barring a catastrophic economic meltdown, it will continue to serve as a beacon of light and hope for the rest of the world, especially the West, in terms of the possibilities of trading and economic stimulation.