Singapore seeks to renew confidence in commodity trade after scandals

0


SINGAPORE (Reuters) – Singapore is keen to improve standards in its commodity trading industry after scandals rocked banks’ confidence in lending to the sector, its trade minister said on Monday.

Several financial scandals in the industry, including allegations of fraud and suspicious deals, have surfaced this year after the drop in oil prices caused by the coronavirus crisis.

Many have involved Singapore – the world’s largest ship refueling station and Southeast Asia’s oil refining center – including Hin Leong, once one of Asia’s largest fuel traders.

“We want to raise the standards of the commodity trading industry in order to increase the confidence of banks in the industry,” Commerce Minister Chan Chun Sing said at a Financial Times event in Singapore.

Without naming any companies, Chan said there had been “isolated cases of mismanagement and defaults” which had reduced the willingness of banks to provide finance to commodity trading companies.

He said the city-state is partnering with industry to develop a new code of practice for commodity finance, which is expected to be finalized this quarter, and is also working on a digital trade finance ledger.

Commodity trade is a key part of Singapore’s wholesale trade sector, which contributed 17% of the city-state’s gross domestic product in 2019, he added.

Separately, Singapore has also launched a study to develop carbon trading and other carbon-related services, which will be completed in the first quarter of next year, Chan said.

Reporting by John Geddie; Additional reporting by Florence Tan. Editing by Gerry Doyle


Share.

Comments are closed.