The use of data analytics and electronic platforms is transforming the Singapore commodity-trading sector, says a senior officer of Enterprise Singapore (ESG).
The success of these will enhance Singapore’s value proposition for commodity trading companies, as trading volumes increasingly move to Asia.
While innovation has always been part of the commodity trade – due to its highly competitive nature and the sector’s thin margins – new digital technological trends are emerging in the sector, said Amreeta Eng, director of trade, connectivity and business services at the government agency responsible for enterprise development, including building Singapore up as a global trading hub.
“We see more companies across the commodity-trading sector using data analytics to make decisions, whether in terms of getting better insights into inventories or where their shipments are,” she told The Business Times.
“We’ve heard that more commodity firms are looking to hire data scientists. That’s a reflection of the importance of data in their trading decisions.”
Such companies either develop their own software or work with service providers such as Kpler, a Paris-headquartered start-up which set up shop in Singapore in 2015. Kpler uses its own software to collect data from satellites, port authorities, ship agents, brokers and commodity traders to pinpoint the location of crude oil or liquefied natural gas (LNG) cargoes.
In addition, within the data analytics field, the commodity sector is also starting to use Internet of Things (IoT) technologies, whether in tracking crop yield or using drones to monitor oilfields or plantations, said Ms Eng.
In a sign of how such technologies are taking off in the sector, tech consulting firm Accenture in 2015 set up an IoT centre of excellence in Singapore – its first in the world – to help companies in natural-resource industries (such as mining, oil and gas and agriculture) harness IoT technology.
Singapore is one of the largest commodity-trading hubs in the world, with close to 80 per cent of the world’s top commodity companies from each sector operating here, going by a 2015 estimate from International Enterprise (IE) Singapore – one of two government agencies which merged in April to form ESG.
Another increasingly prevalent form of innovation in the sector is the e-platform, Ms Eng noted.
Some, like GLX – which offers an online marketplace for members to post offers to sell or requests to buy LNG cargoes – cater to a specific product; others, like TradeCloud aim to be a portal where parties in the metals value chain (such as producers, consumers and traders) can “exchange information, negotiate contracts and conclude business”, says TradeCloud’s website.
Ms Eng said: “A lot of them are trying to be a one-stop shop. Many also focus on enabling you to procure services – whether it’s trade finance or shipping… These have been mushrooming in Singapore.”
For instance, startup Aquifer hopes to use its platform to connect Asian institutional and private capital with firms seeking trade finance, filling a gap which companies in emerging economies, as well as small and medium-sized firms have faced as banks pull back from the capital-intensive sector.
Agri-commodity companies are also offering to farmers mobile technologies to receive payments or information, said Ms Eng. Some use mobile-platform technologies to geo-tag crops so that traceability in the supply chain is enhanced.
There are common features across these platform, which is that they help to make processes more efficient and secure, she added. For instance, blockchain technology, which is used by some of these plaforms, ensures the sanctity and security of data.
ESG actively makes connections between these startups and the larger commodity-trading companies, which validate the services of the former and bridge gaps for the latter, said Ms Eng.
At an annual commodity event held by IE Singapore last year, a poll of head honchos in the commodity-trading sector showed that over 60 per cent believed big data and data analytics holds the biggest potential to transform the sector.
This was followed by blockchain technologies and e-platforms, both of which tied for the second position, with 15 per cent of industry leaders voting for each.
The topic of innovation in the commodity-trading sector will be addressed at this year’s edition of the Global Trader Dialogue. Some 300 leaders of commodity-trading companies are expected to join the event on Thursday, which will discuss whether the value proposition of commodity-trading companies are changing amid such technological advancements.
This article was originally published on www.businesstimes.com.sg can be viewed in full
Archive
- October 2024(44)
- September 2024(94)
- August 2024(100)
- July 2024(99)
- June 2024(126)
- May 2024(155)
- April 2024(123)
- March 2024(112)
- February 2024(109)
- January 2024(95)
- December 2023(56)
- November 2023(86)
- October 2023(97)
- September 2023(89)
- August 2023(101)
- July 2023(104)
- June 2023(113)
- May 2023(103)
- April 2023(93)
- March 2023(129)
- February 2023(77)
- January 2023(91)
- December 2022(90)
- November 2022(125)
- October 2022(117)
- September 2022(137)
- August 2022(119)
- July 2022(99)
- June 2022(128)
- May 2022(112)
- April 2022(108)
- March 2022(121)
- February 2022(93)
- January 2022(110)
- December 2021(92)
- November 2021(107)
- October 2021(101)
- September 2021(81)
- August 2021(74)
- July 2021(78)
- June 2021(92)
- May 2021(67)
- April 2021(79)
- March 2021(79)
- February 2021(58)
- January 2021(55)
- December 2020(56)
- November 2020(59)
- October 2020(78)
- September 2020(72)
- August 2020(64)
- July 2020(71)
- June 2020(74)
- May 2020(50)
- April 2020(71)
- March 2020(71)
- February 2020(58)
- January 2020(62)
- December 2019(57)
- November 2019(64)
- October 2019(25)
- September 2019(24)
- August 2019(14)
- July 2019(23)
- June 2019(54)
- May 2019(82)
- April 2019(76)
- March 2019(71)
- February 2019(67)
- January 2019(75)
- December 2018(44)
- November 2018(47)
- October 2018(74)
- September 2018(54)
- August 2018(61)
- July 2018(72)
- June 2018(62)
- May 2018(62)
- April 2018(73)
- March 2018(76)
- February 2018(8)
- January 2018(7)
- December 2017(6)
- November 2017(8)
- October 2017(3)
- September 2017(4)
- August 2017(4)
- July 2017(2)
- June 2017(5)
- May 2017(6)
- April 2017(11)
- March 2017(8)
- February 2017(16)
- January 2017(10)
- December 2016(12)
- November 2016(20)
- October 2016(7)
- September 2016(102)
- August 2016(168)
- July 2016(141)
- June 2016(149)
- May 2016(117)
- April 2016(59)
- March 2016(85)
- February 2016(153)
- December 2015(150)