CME Group CEO Erik Norland presented at the workshop
On the morning of May 17, in Hanoi, the Commodity Exchange of Vietnam (MXV) and the Chicago Mercantile Exchange (CME Group) jointly organized an international seminar: "Global Perspectives and Market Prospects" Vietnam commodity trading 5”.
At the conference, the world's leading experts of CME Group all forecast that commodity prices will continue to fluctuate strongly and unpredictably in the rest of 2023.
Since the beginning of the year, the world oil price has continuously fluctuated. Specifically, after reaching a peak of 83,38 USD/barrel on April 12, WTI oil price has continuously weakened, and made a new bottom at 04 USD/barrel on May 63,57, equivalent equivalent to a decrease of 04% within a month.
Erik Norland, CEO of CME Group, said: “The macroeconomic landscape is still full of variables, mainly coming from the US economic outlook and the speed of China's recovery.
“Recent economic data have been disappointing for the market, but there are still grounds for optimism about the economic prosperity in the medium and long term” – CME Group leader forecast.
The MXV-Index, which represents the volatility of 31 commodities traded in Vietnam, has decreased by more than 10% compared to the end of 2022.
In which, agricultural products and energy were the items with the strongest decrease in price, down 13% and 17% respectively.
(Illustration: REUTERS)
The role of price hedging tools
At the present time, the price of raw materials is fluctuating in favor of Vietnamese enterprises. Prices of Vietnam's strong export products such as coffee, rubber, and pepper all increased very well.
The price of Robusta coffee on ICE has increased by more than 35% to nearly $2.500/ton. The price of green coffee beans in the Central Highlands and southern provinces has also exceeded 56.000 VND/kg. Pepper prices have also exceeded 76.000 VND/kg in many southern localities.
Meanwhile, the pressure on the animal feed industry has been eased when the price of agricultural raw materials on CME has continuously decreased in recent times.
The price of imported corn to Cai Lan and Cai Mep ports has now fallen below $280/ton, compared with the price of more than $330/ton at the beginning of the year.
The decrease in raw material prices has created a premise for animal feed manufacturers to continuously lower the price of finished bran from 300-800 VND/kg (depending on type), making livestock production more convenient.
According to a report by the General Department of Vietnam Customs, our country imported 2,81 million tons of corn in the first four months of the year, up 4% over the same period in 9,3. Imports of wheat and soybeans in the same period also increased by 2022% and 6,7% respectively over last year.
However, experts all think that this is the most favorable period for the import and export prices of commodities where Vietnam accounts for a large proportion in the world.
In the second half of 2023, the market may appear trend reversal points, and businesses need to have solutions and strategies in this context.
Some solutions and strategies were raised in the workshop such as using price hedging tools; use futures and options contracts in trading; has received great attention from industry associations and import-export enterprises.
“It will be a great advantage if domestic businesses take advantage of the current good price period, combined with the application of price insurance measures. Once the export and import prices are fixed at good price zones, production activities in the chain will be much more proactive and efficient,” said MXV General Director Dang Viet Hung.
(Illustration: REUTERS)
Enhancing the position of the Vietnamese market
At the seminar, experts of CME Group continuously affirmed the role of Vietnam in the world commodity market.
By the end of 2022, our country is still the largest exporter of Robusta coffee, the third largest exporter of rubber, the sixth largest importer of corn and the third largest importer of soybean meal globally.
Any change in Vietnam's supply and demand could affect the prices of goods listed on world exchanges.
Since being allowed by the Ministry of Industry and Trade to exchange transactions with the world, Vietnam's commodity trading market has made great progress.
Trading volume at MXV in 2022 increased by 36% year-on-year. The transaction growth rate remains stable in the first period of 2023.
Currently, MXV has connected with most of the largest exchanges in the world such as the Chicago Mercantile Exchange (CME Group), the London Metal Exchange (LME), the Intercontinental Exchange (ICE). , Singapore Exchange (SGX), Osaka Exchange (OSE), Bursa Malaysia Derivatives Exchange (BMD).
Director General of Domestic Market Department (Ministry of Industry and Trade) Tran Duy Dong affirmed that the initial success of Vietnam's commodity trading market has changed Vietnam's position in the international arena.
“The major Commodity Exchanges in the world all highly appreciate the potential of the Vietnamese market and wish to cooperate with us to develop the Vietnamese commodity trading market to become the largest market in the region. area” – the representative of the management agency cited.
