Singapore wants to improve standards in its commodities trading industry after scandals rocked banks’ confidence in lending to the sector, Singaporean Minister for Trade and Industry Chan Chun Sing (陳振聲) said yesterday.
Several financial scandals in the industry, including allegations of fraud and suspect deals, have surfaced this year after a slump in oil prices sparked by the COVID-19 crisis.
Many have involved Singapore — the world’s biggest ship refueling station and Southeast Asia’s petroleum refining hub — including Hin Leong Trading Pte (興隆貿易), once one of Asia’s largest fuel traders.
“We want to uplift standards for the commodities trading industry to increase banking confidence in the industry,” Chan said at a Financial Times event in Singapore.
Without naming firms, Chan said there had been “isolated cases of mismanagement and defaults” that had reduced banks’ willingness to provide financing to commodity-trading companies.
He said the city-state was partnering with the industry to develop a new code of practice for commodity financing, set to be finalized this quarter, and was also working on a digital trade finance registry.
Commodities trading is a key component of Singapore’s wholesale trade sector, which contributed 17 percent of the nation’s GDP last year, he added.
Separately, Singapore has embarked on a study to develop carbon trading and other carbon services, which is to be completed in the first quarter next year, Chan said.
Last week, the Monetary Authority of Singapore said the local economy is expected to contract 5 to 7 percent this year, reaffirming the Ministry of Trade and Industry’s forecast.
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