Sacom – STE Opens Sugar Exchange

Saigon Thuong Tin Commodity Exchange (Sacom – STEhas officially launched the first sugar exchange on April 6, 2010 in an event held at Intercontinental Hotel, Ho Chi Minh City.

Sugar is a daily necessity but the market has been turbulent due to shortages and unclear trading between manufacturers and businesses. According to the Vietnam Sugarcane and Sugar Association, the demand for sugar rises 4.5 % annually and the country will need at least 1.5 million tonnes of sugar in 2010. Raw materials can satisfy only half the amount needed, and, as a result, there is strict competition amongst manufacturers.

The objective of the sugar exchange is to connect sellers and buyers through a modern, professional, prestigious and security system. This will be the gauge of reference for businesses to determine selling prices before starting production. Thus, they can build stable and long-term business plans. Besides, sugarcane growers can anticipate input prices and selling prices. As a result, the supply and demand will be more balanced, helping the sugar industry develop more sustainably.

The main products to be traded on the floor include refined sugar RE1 and RE2 and white sugar RS1 and RS2, bought from local refining factories. Higher quality RE is used in confectionary, milk, canned foods and drinks. Customers need to open trading account at Sacom-STE and payment account at Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank). They can transact via telephone, online or at physical exchange at 25 Ly Thuong Kiet Street, Tan Binh District, Ho Chi Minh City. The order-matching and deposit are performed in the same way as trading securities. Traders can buy, sell or cancel orders, eight spot or futures. For a spot contract, buy/sell transactions must deposit all contract value at Sacom-STE. For futures trading (T+1 or T+2, or sugar will be delivered in one or two months, respectively), buyers and sellers will have to transfer VND5,000 and VND2,000 for T+1 and T+2 trading respectively to Sacombank deposit accounts. Buyers will receive sugar at warehouses in Song Than Industrial Park I (Binh Duong province), SBA storehouse system, Tan Binh Industrial Park or at selling factories. The minimum traded volume is 5 tonnes and the minimum delivered volume is 10 tonnes. Transaction fee is VND20 per kilo. Besides, enterprises also bear warehouse leasing, management and stevedoring fees, etc.

In December 2009, Sacom-STE opened the first steel exchange. Daily trading volume averages at 1,000 tonnes. In July 2010, the company will open a cashew nut exchange.

Tags: Sacom, Vietnam companies, Vietnam enterprises

Posted by VBN on Apr 16 2010. Filed under Enterprises. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry