14 years of dramatic transformation

After more than a decade of formation and development, the commodity trading market in Vietnam has made significant strides, increasingly asserting its position on the international map. From its challenging beginnings, the market has developed strongly, expanding not only in scale but also in quality and influence. The emergence and development of the market is not only a crucial turning point in boosting the economy but also a testament to Vietnam's strong innovation and integration into the global economy.

Active trading, attracting investment capital.

2024 witnessed significant volatility in the global commodity market. Prices of many commodities surged to new highs, creating major challenges for the commodity trading market. Despite this, the commodity trading market in Vietnam maintained stability and achieved several new milestones.

Established on September 1, 2010, as the first national-scale commodity exchange in Vietnam, the Vietnam Commodity Exchange (MXV) has affirmed its pioneering role in organizing the commodity trading market in Vietnam in a transparent, professional, and efficient manner; realizing the goal of becoming a leading commodity exchange in the region.

According to data from MXV, in the first eight months of 2024, nearly 5,000 new trading accounts were opened, bringing the total number of accounts in the market to nearly 35,000. A continuous flow of capital into the market helped the average daily trading value reach over 5,000 billion VND. On April 19th, MXV recorded the highest trading value ever in Vietnam, reaching nearly 11,000 billion VND.

Mr. Dang Viet Hung, General Director of MXV, stated: “After 6 years of being allowed by the Ministry of Industry and Trade to connect with the world, the market has been ‘unleashed’ and has made strong strides in development. With a focus on self-reliance in technological infrastructure, MXV has continuously upgraded its trading system and improved automation features, helping businesses and investors enhance efficiency when trading with the world. The M-System is considered by international experts to be one of the best commodity trading platforms in the region. The system can handle trading volumes dozens of times higher than currently, while still ensuring stability and smooth operation.”

Mr. Dang Viet Hung – General Director of the Vietnam Commodity Exchange (MXV)

In 2021, commodity trading was primarily a playground for large investors due to the very high margin requirements of standard futures contracts. At times, even the commodity with the lowest margin required an investment of over 30 million VND per contract. However, since MXV launched trading of mini and micro energy contracts in November 2021, commodity trading has become more suitable for accounts with smaller capital. This has helped commodity trading become a more popular investment channel, attracting capital back to the market.

"The trading results of domestic businesses and investors are getting better and better, a consequence of a systematic, large-scale, and professional process of market formation and development. The MXV leadership team planned the market development strategy very early on with clear objectives; focused on key areas; closely adhering to medium and long-term strategic goals; fully exploiting potential while still prioritizing the safety and sustainability of the market," Mr. Dang Viet Hung added.

The market network is developing strongly.

To organize a professional and large-scale market like the one we have today, the contributions of the 32 market members are extremely important. With a network of offices and branches spread across provinces and cities nationwide, MXV members have brought the commodity trading market closer to businesses and investors in Vietnam.

Since 2023, in addition to publishing quarterly brokerage market share figures, MXV has widely publicized its rankings of market participants through various media outlets. This ranking is one of the internationally recognized standards for commodity markets, adopted by many major commodity exchanges worldwide . This is a significant milestone, marking the professionalization of the commodity trading market in Vietnam, in line with the development trends of major global markets.

Top-rated Business Members of 2023

Furthermore, MXV continuously focuses on improving the operational quality of its market members through a series of intensive training programs. These training sessions not only provide specialized market knowledge but also update participants on the latest information regarding trading products, technology application skills, and risk management. Thanks to these programs, members not only enhance their competitiveness but also contribute positively to the sustainable development of the commodity trading market in Vietnam.

Training is becoming more substantive.

Recognizing the importance of standardizing and updating knowledge in line with global trends, MXV has actively incorporated feedback from experts and investors to develop training programs tailored to the Vietnamese market. According to data from the MXV Scientific Research Center, as of August 2024, nearly 1,500 trainees had received certificates of completion for the regular training courses. These courses are held regularly every month, attracting participation from members, brokers, and investors from across the country.

MXV's training program stands out with its team of leading instructors and experts in the field of commodity trading, providing in-depth and up-to-date knowledge to help learners understand and effectively respond to market fluctuations. The training course content is revised and divided into basic and advanced modules, meeting the needs of different target groups such as individual investors, brokers, and managers. Besides optimizing learning time, the courses are also designed to minimize costs, suit each participant, ensure training quality, and facilitate access to the market for all members.

The training program "Risk Management of Commodity Derivatives Portfolios" features leading experts from Singapore as speakers.

In addition to focusing on improving the skills of brokers and investors currently operating in the market, MXV also places special emphasis on training future human resources to ensure the sustainable and stable development of the commodity trading market in Vietnam.

Over the years, MXV has strengthened its cooperation with leading universities and economic institutions to implement beneficial activities for students, including organizing seminars and scientific discussions on commodity trading, as well as collaborating on short-term and long-term training courses. These activities aim to create a high-quality workforce with solid professional knowledge and excellent vocational skills.

Furthermore, MXV collaborates with universities and colleges to organize workshops and practical competitions on commodity trading. This provides students with the opportunity to gain a deeper understanding of the market and connect with commodity experts from leading organizations worldwide, thereby receiving valuable and practical experience and lessons.

Establish specialized commodity exchanges.

Besides the goal of expanding trading volume, since 2023, MXV has focused on researching and laying the foundation for building specialized commodity exchanges for Vietnam's key products such as coffee, rubber, and electricity. This is one of MXV's key plans for the 2023-2028 period, helping to develop the commodity trading market in Vietnam according to international standards.

“Specialized commodity exchanges will help solve many problems for each specific commodity. But overall, they will help make Vietnam's production and trade activities more transparent and modern, creating a foundation for breakthrough development in the future. MXV will actively cooperate with partners to gradually bring specialized commodity exchanges into operation,” Mr. Dang Viet Hung affirmed.

After a long period of joint research and cooperation, MXV and the Vietnam Rubber Industry Group (VRG) have reached the testing phase of the Vietnam Rubber Exchange system. In the third quarter of 2024, MXV and VRG will work together to finalize the procedures and regulations for trading Vietnamese rubber products. It is expected that this commodity will be officially listed and traded in the fourth quarter of 2024.

The conference to introduce and gather feedback on the Rubber Exchange, organized by MXV and the Vietnam Rubber Industry Group, was held on June 28, 2024.

The Rubber Exchange will help ensure transparent and public buying and selling prices; help businesses expand and create more linkages within the industry; and enhance the reputation and quality of Vietnamese rubber products. Modern, fast, and accurate trading methods will gradually help the domestic rubber market catch up with the development speed of the global market.

Furthermore, since August 2023, MXV has collaborated with the Department of Industry and Trade, the Department of Agriculture and Rural Development, and other departments in Ho Chi Minh City to build the Ho Chi Minh City Pork Exchange. Mr. Dang Viet Hung stated: “This exchange model, with its modern technology and operation, is expected to help both farmers and consumers avoid price manipulation, protect their rights, and improve food safety and hygiene. Simultaneously, the scale of Ho Chi Minh City's livestock industry will gradually become more sophisticated.”

Enhancing our standing through international cooperation.

To enhance Vietnam's position in the international commodity trading market, MXV has actively collaborated with partners including leading global exchanges, technology corporations, and financial institutions. This is clearly demonstrated through visits and working sessions between partners and MXV to discuss cooperation strategies for developing the commodity trading market in Vietnam. Partners have affirmed that Vietnam is currently the fastest-growing commodity trading market in the region, and acknowledge that this success is the result of MXV's systematic and professional operational approach.

Since 2023, MXV and the Chicago Mercantile Exchange (CME Group) have agreed on a strategy to develop internationally qualified human resources for the commodity trading market in Vietnam through the organization of annual specialized seminars. Accordingly, CME Group has sent leading global experts to share and update the latest information and trading trends in the global commodity market with experts, businesses, and investors both domestically and internationally. Simultaneously, CME Group representatives have also held active working sessions with the Ministry of Industry and Trade to formulate development strategies and share and consult on the legal framework to facilitate the market's development.

Furthermore, in April 2024, MXV visited and worked with major commodity exchanges in China, including the Dalian Commodity Exchange (DCE), the Shanghai Futures Exchange (SHFE), and the Shanghai Gold Exchange (SGE). The partners affirmed that, with the comprehensive promotion of bilateral relations between Vietnam and China by the governments of both countries, cooperation with MXV will be a key strategic focus for commodity exchanges in China in the coming period. In particular, as a leading exchange in the world's largest pork producing market, DCE provided support and shared its experience to help MXV organize and operate the Ho Chi Minh City Pork Exchange effectively.

A delegation from MXV visited and worked at the Dalian Commodity Exchange and other major exchanges in China from April 23-26, 2024.

Improving the legal framework is key to boosting the market.

Compared to its 14-year history, the commodity trading market has only truly developed since 2018. Decree 51/2018/ND-CP removed the most crucial bottleneck by allowing the Vietnamese market to trade interconnected with exchanges worldwide. This is a turning point that has made trading more transparent and professional, attracting significant investment from domestic businesses and investors.

The Vietnamese commodity market's entry into the global arena amidst increasingly deep economic integration means it must be prepared to face numerous challenges. In a market interconnected with the world, policies must keep pace with global developments. Furthermore, policy consistency is essential, not only for regulations concerning the organization and operation of the Vietnam National Oil and Gas Group (MNG), but also for other relevant ministries and agencies, such as tax policies, accounting systems, foreign exchange management regulations, and policies supporting businesses participating in raw material price insurance.

"As the state management agency responsible for commodity trading activities, the Ministry of Industry and Trade always closely monitors these activities to develop timely policies that align with market developments, comply with Vietnamese laws and international practices, while still ensuring effective state management of these activities," said Mr. Dang Viet Hung.

A delegation from the Ministry of Industry and Trade conducts a routine inspection of operations at MXV.

Currently, the Ministry of Industry and Trade is developing a new Decree to replace Decree 158/2006/ND-CP and Decree 51/2018/ND-CP. This Decree will be adjusted to suit practical realities so that commodity trading activities are truly "unleashed" and developed to their full market potential, serving as a springboard to help the Vietnamese economy reach its full potential in the region and internationally.

Source: https://congthuong.vn/thi-truong-giao-dich-hang-hoa-tai-viet-nam-14-nam-chuyen-minh-manh-me-342445.html