Analysis, interviews, roundtables, reports and more on the topics that matter to you.

Expert opinion
25 May 2022

TXF Global Commodity Finance 2022: The top takeaways

Agri/Soft Commodities
Middle East & Africa, Americas, Asia-Pacific, Europe
Commodities content manager
After two days of content and networking in Amsterdam, TXF presents the hot takes of TXF Global Commodity Finance 2022!

On 10th and 11th May, the titans of the commodity finance industry gathered from all corners of the world at the Beurs Van Berlage in the centre of Amsterdam for TXF Global Commodity Finance 2022 – finally back in physical format (as well as virtual) for the first time since 2019!

The under the sea themed event comprised two pre-event virtual sessions, a walking tour, icebreaker drinks, two days of fantastic content which also equated to 17 hours of on-demand virtual sessions, six hours of networking breaks, and one commodity finance themed TXF cover of The Little Mermaid’s ‘Under the Sea’, enjoyed by 300 physical attendees and 100 virtual attendees.

There were panels dedicated to discussing everything from which regions will cushion the fall from the Russia/Ukraine conflict, how the industry can advance the establishment of one standardised sustainability criteria, metal market supply squeezes and the rising cost of batteries, and what is needed to bring more institutional investors into the commodities space.

Throughout the two days of content, we heard from global heads, CEOs, bankers, traders, producers, insurers, fintechs, alternative financiers, investors, law firms and more.

Here are just some of the top takeaways:

Trade is now a mechanism for fighting war

Tariffs, sanctions, and embargos are now being used as a mechanism for fighting war, effectively weaponizing trade. In other words, the commodities that countries and jurisdictions are trading with one another are ultimately being used politically.   

Embargoes against Russia have resulted in significant redirection of trade flows

In the wake of both high commodities prices, and sanctions and embargoes against Russia, traders and exporters are on the hunt to diversify the jurisdictions from which their commodities are coming from. This particularly applies to European-based traders, and may even result in a push to industrialise Europe, although this would create demand for even more new and diversified supplies of raw materials.

Overall sentiment was positive

Overall sentiment from traders towards their banking lenders was positive, with large traders having not experienced issues securing additional liquidity during such an uncertain time. The commodities market is a highly volatile one, and players are used to exercising resilience, although there is an expectation that the effects of the current crisis will last longer than most other recent industry headwinds.

Extraordinarily high volatility is a Catch 22 for traders

Traders, who typically see volatility as a positive opportunity, are experiencing a significant need for additional liquidity to meet margin calls due to extremely high energy prices, which has resulted in many of them cautiously recalibrating their risk appetite for new deals.

Investors are focussed on returns over ESG

Demand for alternative financing is rising, despite the higher margins that come with this, with even the big traders seeking to diversity their lending pool. But the institutional investor space has not yet evolved to the point of considering ESG at the forefront, and it is still profits over anything else. However, funds are in the process of developing the tools to apply more focus to ESG.

‘S’ and ‘G’ make it to the forefront

ESG and sustainability is very much at the forefront of every discussion, but this discussion is evolving to lend more focus towards social and governance, rather than environmental being the sole focus.

Supply chain management has evolved

Supply chain disruption solutions have evolved due to the host of issues created by the pandemic, but there are still not sufficient solutions for SMEs who may not be able to afford supply chain management.

Digitisation is finally out of the pilot phase

There has been some tangible progress in terms of digitalisation, with deals such as Sucafina’s digital borrowing base with blockchain trade finance platform Komgo as digital agent. Structures like this are expected to be more widely adopted but the industry is currently in the early stages of implementing this.

For those who attended TXF Global Commodity Finance, either physically in Amsterdam or virtually, all the plenary sessions are currently available on-demand here on TXF’s virtual events platform.

Sea you next time!

Become a subscriber today to access the best export, trade and commodity finance analysis available. Email intelligence@txfmedia.com to find out more

Exclusive subscriber-only content published last week;

ECAs to propel cruise sector recovery
The impact of the suspension of cruising in 2020 had far-reaching effects across the sector, however a full recovery is on the horizon – with ECA support re-emerging as a viable financial template as shipbuilders order books fill up once again....Read on here

How can banks avoid a lending crisis and accelerate economic growth?
Converging market forces threaten to create a global lending crisis and prevent economic growth. Tradeteq CEO Christoph Gugelmann explores the future of trade finance and how firms are collaborating to overcome barriers to lending...Read on here

Further details surface on MB2 North financing
Further information has come to light regarding the financing of the 253MW MB2 North wind farm in Sweden, which forms part of the Markbygden wind farm cluster...Read on here

Bids pushed back for Colombian riverway PPP
The Colombian national infrastructure agency - ANI - had expected to receive bids for the the Magdalena riverway PPP on 27 May, but after requests from potential bidders to delay the process the deadline has been pushed back to 16 June...Read on here 

Fuentes joins CIBC in energy transition role
Luisa Fuentes has joined CIBC Capital Markets as a managing director and head of energy transition and sustainable finance for the US...Read on here 

Dalmore closes £79m PFI holdco financing
Dalmore Capital has reached financial close on a £79 million holdco financing. Sources confirm that the transaction is structured....Read on here

Rabobank appoints new global head of trade and commodity finance
Christine Dirringer has joined Rabobank as the new global head of trade and commodity finance...Read on here 

Mphanda Nkuwa hydro garners DFI support
The 1.5GW Mphanda Nkuwa hydropower project in Mozambique is expected to garner support from the IFC, with the scheme expected to mobilise private investment to the tune of...Read on here

Miller joins Bridge Insurance Brokers
Richard Miller has joined Bridge Insurance Brokers as trade credit and surety director, based in London...Read on here 

Tess Jarmolkiewicz joins Ghetta Limited
Tess Jarmolkiewicz has joined Ghetta Limited as a managing director and will be responsible for providing equity and debt funding solutions for the energy transition...Read on here

Interested in finding out more?
Ask the analyst

You might also like

Expert opinion
25 January 2023

When will sub-Saharan Africa be able to properly see the...

Approximately 600 million people in Africa have no access to electricity. In a continent with considerable potential for energy natural resource development – both through...

30 January 2023

Perspectives: Falcioni reflects on his five year tenure at...

TXF speaks to Massimo Falcioni, former CEO of the UAE Federal Company Etihad Credit Insurance (ECI) about his journey with the export credit agency, the challenges of...

Sign up to our weekly newsletter and get 14 days trial access