SINGAPORE'S commodity trading sector has remained resilient despite a challenging operating environment for the oil, agri-commodities and metals and minerals markets in the past few years, said Minister for Trade and Industry (Industry) S Iswaran.
Speaking at the Global Trader Dialogue - a gathering of 300 top representatives from the international commodity trading community - he noted that in the past few years, oil prices have seen a sharp drop; oversupply in the agri-commodities sector has created margin pressure for growers, traders and processors; and volatility has become a new norm in the metals and minerals market.
"Despite such market uncertainties, Singapore's commodities trading sector remains resilient," he said. "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."
Singapore's commodity trade turnover reached US$900 billion last year, down from the nearly US$1 trillion figure it recorded in 2015 as commodity prices fell, according to IE Singapore, which organised the event.
But employment in the sector grew to 15,400 in 2016, up from 15,000 the previous year. Over 80 per cent of these were jobs in the professionals, managers, executives and technicians (PMET) space, said the trade promotion agency.
The sector also contributed S$24 billion to the local economy through business spending in areas such as banking and finance, freight, manpower and legal. This was lower than the S$25.5 billion spent in 2015 as freight rates dropped, said IE.
Mr Iswaran said Singapore will continue to strengthen its position as a global trading hub.
"While we are already home to 80 per cent 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," he said.
He noted that the trading sector is already engaging in more innovative activities. For instance, mining giant BHP Billiton recently established an online shipping platform to secure more competitive freight rates.
Commodity traders Cargill, Mercuria and Trafigura are also individually exploring the use of blockchain technology in trade finance - traditionally reliant on paper processes - to enhance accuracy and processing speed.
The government is working with industry partners to develop talent with the necessary skillsets, he added.
In Singapore Management University and Nanyang Technological University which offer commodity trading undergraduate programmes, topics such as digitalisation, blockchain and data science will be integrated into the curriculum.
The professional conversion programme to train mid-career professionals, launched last year, will see its first cohort start training in July, said Mr Iswaran.
IE Singapore will also partner companies in the trading sector to identify emerging Singaporean leaders and provide them with developmental opportunities, under the Leadership Development Initiative announced in this year's Budget, he added.