A Singapore trade data sharing platform backed by banks, state firms, and commodity houses has signed up seventy participants as part of the city-state’s efforts to boost confidence after a series of commodity trade finance frauds in recent years.
The Singapore Trade Data Exchange (SGTraDex) — whose founders include Standard Chartered (STAN.L) and DBS (DBSM.SI) banks, the local tech regulator, Infocomm Media Development Authority, and commodity trader Trafigura – was launched on June 1 after plans were announced in 2021.
Antoine Cadoux, chief executive of SGTraDex Services, told reporters:
“We’re trying to replicate what’s happening in the physical world. The goal is to go paperless across the end-to-end process. We think that with the value we can demonstrate, we can achieve scale relatively quickly.”
Singapore, one of the world’s largest commodity trading and financing hubs and the biggest bunkering hub, intends to reinforce oversight after recent corporate scandals, such as the collapse of one of Asia’s largest oil traders Hin Leong Trading Pte Ltd.
Closing down Hin Leong and other commodity traders left many banks burdened with billions of dollars in debt and pushed lenders to reduce exposure to commodity financing. The platform’s participants include cargo traders, shipping carriers, bunker suppliers, oil terminals, the Singapore port operator, and others.
Cadoux added:
Buy Crypto Now“We want to create resilience and transparency in the supply chain. It’s going to mitigate the risk of fraud.”
The Singapore Firm Has A Strategy
The platform, which will originally be used to advance bunkering, trade finance fraud detection, and container logistics, was projected to unlock over $100 million of value by 2026 for participants from cost savings and efficiency, faster access to financing, and better use of assets, SGTraDex said.
The backers expect features such as its neutrality and flexibility in data sharing will attract more participants. Bank UOB (UOBH.SI), one of the founders of SGTraDex, said it strives to drive all its bunker finance clients onto the platform by June 2023.
“Digitalization is important in creating more transparency in the bunkering industry,” Eric Lian, head of group commercial banking at UOB, which said it was the major financier of local bunker suppliers, said in a statement.
In bunkering, the platform enables banks, storage facility operators, and barge operators to go digital, seeking to increase transparency in an industry that is made up of many middlemen and depends on large amounts of paperwork.
