Opening Address By Minister S Iswaran At The Global Trader Dialogue

​OPENING ADDRESS BY MR S ISWARAN, MINISTER FOR TRADE AND INDUSTRY (INDUSTRY), AT THE GLOBAL TRADER DIALOGUE, NATIONAL GALLERY, THURSDAY, 18 MAY 2017, 6:50PM

“What’s Next for Commodity Trading: Drivers, Disruptors and Opportunities”

Distinguished Guests,

Ladies and Gentlemen,

Introduction

1.                  Good evening, and welcome to the Global Trader Dialogue.  I am pleased to see many global players from the commodities sector here with us tonight.  Thank you for taking the time to join us at this flagship event for the sector.

Our commodities trading sector remains resilient

2.                  Over the past few years, the commodities sector has faced a challenging operating environment. Oil prices have seen a sharp decrease from the heydays trading at more than US$140 per barrel.  Oversupply in the agri-commodities sector has created pressure on margins for growers, traders and processors, while volatility appears to be the new normal in the metals and minerals markets.

3.                  Despite such market uncertainties, Singapore’s commodities trading sector remains resilient. In 2016, the sector generated approximately US$900 billion in turnover.  We also saw the entry of new Chinese independent refineries, non-ferrous traders, and agriculture cooperatives, which further strengthens Singapore’s value proposition in the trading sector.

4.                  Looking ahead, Singapore is committed to ensure the strength of our position as a global trading hub. We are developing Industry Transformation Maps (ITMs) for 23 sectors, and the trading sector is one of these sectors where we want to ensure Singapore maintains its lean and competitive position. Geographically located at the crossroads of major Asian producers and consumers, Singapore has the unique opportunity to tap on rising Asian trade flows. This shift in trade flows towards Asia, coupled with our strong supporting ecosystem and active participant network, puts Singapore in good stead to achieve this outcome.

5.                  Nonetheless, while we are already home to 80% of the world’s leading commodities trading companies, we recognise the need to strengthen our ecosystem to continue being the place where companies develop the latest tools and capabilities to succeed.

Creating New Value through Innovation

6.                  The commodities trading sector is expected to enter a new stage of development given the rising importance of the digital economy.  Companies will need to leverage disruptive technologies and innovate to create new value and new markets for themselves.  That is why the theme of today’s Dialogue “What’s Next for Commodity Trading: Drivers, Disruptors and Opportunities” is not only relevant, but also serves as a call to action.

7.                  Today, we are already beginning to see the trading sector engaging in more innovative activities. For instance, AgroGo.com, which is based in Singapore, is gearing up to be one of the world’s first Business-to-Business (B2B) online marketplaces for agricultural commodities and trading.  It aims to provide the full range of end-to-end services such as logistics, insurance, inspection and trade finance on a single platform. Such platforms increase market participation by traders, and allow them to move quickly to take advantage of profitable opportunities.

8.                  I am equally encouraged to know that a number of the leading commodity trading companies are embarking on innovative activities to increase efficiencies and reduce costs. BHP Billiton recently established an online shipping platform, which is aimed at securing more competitive freight rates. Cargill, Mercuria and Trafigura are each exploring how to optimise the labour-intensive and paper-based process of trade finance by incorporating blockchain technology, which will enhance accuracy and speed of processing.

9.                  With a range of institutions of higher learning, research institutes, and centres of excellence devoted to innovation, Singapore is well-placed and committed to support the innovation needs of the commodity trading sector. I therefore encourage you to engage and collaborate with these institutions, to leverage disruptive technologies to create and develop new ideas which will create value for your business and the industry.

A Market-Ready Talent Pool

10.              To further support the sector’s development needs, the Government has been working with industry partners to develop market-ready talent equipped with the requisite skillsets.  Let me elaborate.

11.              First, IE Singapore has been working with our tertiary institutions to develop entry-level local talent in the commodities sector. The syllabus offered at the International Trading Institute (ITI) at the Singapore Management University, and the International Trading Programme at the Nanyang Technological University (NTU), was developed with the help of industry practitioners, to ensure that our young undergraduates are equipped with the right skillsets. These courses help to provide a steady flow of trained graduates for companies in the sector. Going forward, topics such as digitalisation, blockchain and data science will be integrated into the curriculum to ensure relevance to the future economy.

12.              Second, beyond entry-level talent, IE Singapore has worked with industry partners to put in place a Professional Conversion Programme (PCP) to train mid-career professionals in international trading.  Since the launch of the PCP last year, I am pleased to note that the first cohort will commence their training in July this year.  I would also like to thank the pioneer batch of companies who have come on-board the PCP, and encourage more companies to consider tapping on the scheme to fulfil your manpower needs.

13.              Third, IE Singapore will also be partnering companies in the trading sector to accelerate the development of their future leaders under the Leadership Development Initiative (LDI), which was announced in this year’s Budget.  Under the LDI, companies will partner the government to identify emerging Singaporean leaders and commit to providing them with developmental opportunities. A key aspect of the programme is to build a global mindset and strategic thinking skills through a series of overseas projects and assignments. We look forward to more talent emerging from this programme to take up key regional leadership positions, including in the trading sector.

Conclusion

14.              In closing, I would like to reiterate Singapore’s commitment to ensuring that the trading community sector in Singapore remains competitive and relevant to its stakeholders. To this end, the Government is committed to supporting the industry’s needs and strengthening Singapore’s position as a trading hub. I also look forward to stronger partnerships among trading companies, and collaborations between the public and private sectors, to further innovation and deepen capabilities in the sector.

15.              I wish you all a pleasant evening ahead.