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Singapore: The Top Commodities Trading Hub in Asia

Last modified: November 12, 2020
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SingaporeThe Singapore authorities have led the country to a unique position of being the largest commodity trading hub in Asia. Their efforts, taken during the last 2 decades, have realized world-class trading facilities. It has also resulted in numerous Singapore company setups by the world’s largest trading companies in Singapore.


Commodity Traders and Incorporation of Company in Singapore

Singapore is perfectly suitable for physical trading across all commodities. It is a prominent trading hub for Oil and Gas, agri-commodities, metals, and minerals. Singapore is a multifaceted business hub that acts as a magnet to the investors and entrepreneurs.

It especially attracts the large volume or the wholesale traders that accounts for as much as 20% of new Singapore company registrations. The conditions are ripe for an ambitious individual to indulge in a singapore company setup.


Benefits of a Singapore Company Formation to the Wholesale Traders

Asia as a Growth Engine

According to the estimates, Asia is going be the growth engine of the global trade until 2020. It is going to contribute approximately 60% of its average annual growth. This growth is mainly driven by the economies such as India and China. Singapore, with its world-class warehousing, logistics, and terminal facilities, is strategically placed fulfill it.

Tap the Trade Route

Singapore’s geographical location is also important from the perspective of commodity trading. It straddles the sea route responsible for the enormous amount of trade equaling $5 trillion in the amount between the East and West. All you need to do is set up a company Singapore and carve your share of the trade.

Benefit from the Best US dollar liquidity in Asia

Singapore has also gained the reputation as the 3rd largest foreign exchange market and offers the best US dollar liquidity in Asia. It comes handy to the commodity players in the value chain such as the large miners to the independent brokers and traders who opted to open a company in Singapore at the right time.

High Concentration of Traders

The presence of a large number of the traders plays a vital role in the demand and supply chain. It drives the costs of commodities down and increases the supply. It gives them better security and hedging opportunities.

Dilute Your Risk

Singapore also offers the commodity traders to dilute the risk of unstable commodity prices. The Singapore Exchange allows them to hedge their positions with commodity derivatives swaps.

Qualified and Motivated Workforce

The rise of Singapore as a commodity trading hub has also been responsible for the generation of demand for the professionals from this domain. As it continues to attract professionals from all walks of life, the 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 the Singapore’s political stability and neutrality. In 2015, it is ranked at the top in the Ease of Doing Business indicator. Its ability to retain AAA credit rating even in the sluggish global economy is also appreciated. The 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 the total commodities trade turnover of US$1.3 trillion. It is 3 times the turnover Singapore posted in 2009. The commodity trading has yet not reached the ceiling and the chances are that it will keep on growing. There is still time for the die-hard business persons to incorporate a business in Singapore and outshone the others.

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