Commodity markets have seen unprecedented price fluctuations in recent times making the sector much more challenging. The structured trade and commodity finance training course will attempt to deal with these challenges but ultimately the whole sector remains inherently more risky than it was.
Trade Finance remains the engine at the heart of global economic growth with China still probably the most important participant. Commodity Finance sits at the heart of this trade dominated by oil and gas which according to some estimates, accounts for as much as 70% of all commodity trade.
The impact of both Brexit and The Trump presidency are very hard to predict and both the short and medium term outlooks remain uncertain which is not helpful. Most markets are “holding their breath”. Similarly we have just seen the latest “agreement” by OPEC and others (primarily driven by Saudi Arabia) to restrict production and hopefully boost oil prices. Early signs show it is working but will it last?
Structured Trade and Commodity finance can mean many things and many banks will have their own particular definition. Generally speaking it is an activity dedicated to the financing of high-value supply chains. Every loan is tailor-made to client, transaction and region. They tend to be more long-term – sometimes up to five years.
Structured trade finance usually refers to the financing of cross-border commodity flows (and as such is most commonly known as structured commodity finance).
Structured commodity finance encompasses several different methods of finance for producers and traders of goods and commodities, including:
Trading in commodities often involves dynamic and fast-moving commodity markets, often with counterparties in emerging market territories. Risk mitigation and the ability to swiftly devise structures to make available financing of transactions are keys to success.
Whilst ongoing innovations and technological developments make the market more transparent this can be a high risk area for the uninitiated or unprepared. As a commodity banker, trader or even a producer, a flexible and creative approach, balanced by an appropriate degree of caution, will minimise risks.
This course will highlight the key concepts involved in commodity trading with elements drawn from real situations. It will also cover liquidity issues and lightly traded commodities.
Your course director has spent more than 40 years in the banking and financial sector, much of it in a senior managerial/Director role. He is a former Institute of Banking Lecturer, having gained distinctions in the exams. He is a subject matter aspect on all aspects of retail, corporate and global banking, including risk management and regulatory compliance. He has lectured extensively to both leading global financial institutions and to smaller bespoke specialists. He has delivered extensive programmes in all parts of the world including the USA, Europe, MENA, Africa and Hong Kong. He is currently an accredited Master Trainer at the world’s biggest global bank.
Case Study: Delegates are asked to consider the separate risks of upstream, midstream and down stream operations and explain which could be funded by a financial institution and why.
Case study: An emerging market deal.
Case study: Using these in practice
Case study: how to structure a deal to minimise risk and the trade off between lower risk and potentially less business.
Case study: A structured deal
Case study: Looking for high risk indicators and how to mitigate them.
Case study: Based on a real case using Warehousing as a risk mitigant
Case study: How can we manage price risk in practice
Case study: A real life example
Case study: Real life example
Terminology within structured trade finance is the tip of the iceberg concerning mitigation and legal requirements when trading. Understanding core elements of structured trade finance comes from building an ongoing and broad knowledge of industry changes. As such, we provide courses in a range of areas concerning structured trade finance. These are:
Training Course Name
|Trade Finance Sales||UCP 600, ICC 552, FCC, International trade transactions|
|Letters of Credit||UCP 600, ISBP 2013, trade documentation|
|Risk in Trade Finance and Trade Finance Products||UCP 600, trade finance products, commodity finance regulations, URDG|
|Advance Trade Financing Course||UCP 600, risk in trade finance, letters of credit|