After more than a decade of development, Vietnam's commodity trading market has made significant strides, solidifying its position on the international stage. From its challenging early days, the market has grown robustly, expanding not only in scale but also in quality and influence.

The emergence and growth of the market have been a key milestone in boosting the economy and stand as a testament to Vietnam’s innovation and strong integration into the global economy.

Dynamic Trading, Attracting Investment Flows

The year 2024 witnessed strong volatility in the global commodity market. Prices of many commodities surged to new peaks, presenting major challenges for the commodity trading market. Despite these challenges, Vietnam's commodity trading market has maintained stability and achieved new milestones.

Established on September 1, 2010, as the first national-level commodity exchange in Vietnam, the Mercantile Exchange of Vietnam (MXV) has asserted its pioneering role in organizing a transparent, professional, and efficient commodity trading market in Vietnam, with the goal of becoming the 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. Capital continues to flow into the market, with the average daily trading value exceeding 5,000 billion VND. On April 19, MXV recorded Vietnam’s highest-ever trading value, reaching nearly 11,000 billion VND.

Mr. Đặng Việt Hưng, CEO of MXV, shared: “After six years of being granted permission by the Ministry of Industry and Trade to integrate trading with the global market, the market has been ‘unshackled’ and has seen significant growth. With a focus on technological infrastructure autonomy, MXV has continuously upgraded its trading systems, improving automation features to help businesses and investors enhance their efficiency when trading internationally. The M-System, according to international experts, is one of the best commodity trading platforms in the region. It can handle a trading volume tens of times higher than the current level while maintaining stability and seamless operation".

In 2021, commodity trading was mainly the domain of large investors due to the high margin requirements for standard futures contracts. At certain times, the lowest margin requirement at MXV still demanded an investment of over 30 million VND per contract. However, since MXV introduced mini and micro energy contracts in November 2021, commodity trading has become more accessible to accounts with smaller capital. This shift has made commodity trading a more popular investment channel, attracting more capital to the market.

“The trading performance of domestic businesses and investors is improving, which is the result of a well-organized and professional market development process. MXV's leadership planned the market’s development strategy early on, with clear objectives; focusing on key areas and adhering closely to mid- and long-term strategic goals. The aim is to fully leverage the market’s potential while prioritizing safety and sustainability,” added Mr. Đặng Việt Hưng.

A Strongly Developed Market Network

The contributions of 32 market members have been crucial in building the professional and large-scale market that exists today. With a network of offices and branches spread across the country, MXV members have brought the commodity trading market closer to businesses and investors in Vietnam.

Since 2023, in addition to quarterly brokerage market share announcements, MXV has widely published a ranking of market members in the media. This ranking is one of the international standards in the commodity market, applied by many major commodity exchanges worldwide. It is a significant milestone, marking the professionalization of Vietnam’s commodity trading market, aligning with the development trends of large global markets.

MXV has been continuously focused on improving the operational quality of its market members through a series of in-depth training programs. These sessions not only provide specialized market knowledge but also update participants on the latest trading products, technological applications, and risk management practices. Thanks to these programs, members have enhanced their competitiveness and contributed positively to the sustainable development of Vietnam’s commodity trading market.

Training Programs with a Practical Focus

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 Research Center, as of August 2024, nearly 1,500 participants have been certified for completing regular training courses. These training sessions are held monthly, attracting market members, brokers, and investors from across the country.

MXV’s training programs are notable for featuring top lecturers and experts in the commodity trading field, providing participants with in-depth and up-to-date knowledge to help them effectively navigate market fluctuations. The content is organized into basic and advanced modules, catering to different groups such as individual investors, brokers, and managers. In addition to optimizing the course duration, the programs are designed to minimize costs, ensuring accessibility while maintaining high training quality for all market participants.

Beyond enhancing the skills of current brokers and investors, MXV places special emphasis on training future talent to ensure the sustainable and stable development of Vietnam’s commodity trading market.

Over the years, MXV has strengthened collaborations with leading universities and economic institutions to offer valuable activities for students. These include organizing workshops and scientific discussions on commodity trading, as well as offering both short- and long-term training courses. These efforts aim to develop a highly skilled workforce with solid expertise and exceptional professional abilities.

Furthermore, MXV has worked with universities and institutes to host workshops and real-world competitions on commodity trading. These events provide students with opportunities to gain deeper insights into the market and connect with leading global commodity experts, who share practical and valuable lessons from their experiences.

Establishing Specialized Commodity Exchanges

In addition to expanding trading volumes, since 2023, MXV has focused on laying the groundwork for specialized commodity exchanges for Vietnam's key products such as coffee, rubber, and electricity. This initiative is a major focus for MXV from 2023 to 2028, aiming to develop Vietnam's commodity trading market to meet international standards.

“Specialized commodity exchanges will address specific challenges for each product, but overall, they will make Vietnam’s production and trade activities more transparent and modern, paving the way for future breakthroughs. MXV will actively collaborate with partners to gradually bring these specialized commodity exchanges into operation,” affirmed Mr. Đặng Việt Hưng.

After extensive research and collaboration, MXV and the Vietnam Rubber Group (VRG) have reached the testing phase for the Vietnam Rubber Exchange system. In Q3 2024, MXV and VRG will finalize the processes and regulations to facilitate the trading of Vietnamese rubber products. The product is expected to be officially listed and traded by Q4 2024.

The Rubber Exchange is expected to bring transparency to rubber trading prices, helping businesses expand and forge stronger industry connections, while also enhancing the reputation and quality of Vietnamese rubber products. The modern, fast, and accurate trading methods will gradually help the domestic rubber market keep pace with global market developments.

In addition, since August 2023, MXV has been working with the Department of Industry and Trade, the Department of Agriculture and Rural Development, and other relevant departments in Ho Chi Minh City to establish the Ho Chi Minh City Pork Exchange. Mr. Đặng Việt Hưng stated: “This exchange model, with its advanced technology and modern operations, is expected to protect both farmers and consumers from price manipulation, safeguard their rights, and improve food safety standards. At the same time, the city’s livestock industry will gradually develop more sustainably".

Enhancing Position Through International Cooperation

To elevate Vietnam’s position in the global commodity trading market, MXV has actively collaborated with leading global exchanges, technology corporations, and financial groups. This is evident through the visits and discussions between MXV and international partners, aimed at strategizing collaborations to further develop Vietnam’s commodity trading market. International partners have recognized Vietnam as the fastest-growing commodity market in the region, attributing this success to MXV’s professional and organized approach.

Since 2023, MXV and the Chicago Mercantile Exchange (CME Group) have agreed on a strategy to develop a workforce meeting international standards for Vietnam’s commodity trading market. This includes organizing annual specialized workshops, where CME Group has sent top global experts to share and update the latest trading trends and information with professionals, businesses, and investors in Vietnam and abroad. CME Group representatives have also engaged with the Ministry of Industry and Trade to strategize market development and provide advice on creating a supportive legal framework for the market’s growth.

Additionally, 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). These partners confirmed that, given the comprehensive promotion of bilateral relations between Vietnam and China by both governments, collaboration with MXV will be a key strategy for Chinese commodity exchanges in the near future. Notably, DCE, as the leading exchange in the world's largest pork-producing market, has supported and shared its experience to help MXV effectively organize and operate the Ho Chi Minh City Pork Exchange.

Despite 14 years since its establishment, Vietnam's commodity trading market has only truly developed since 2018. Decree 51/2018/ND-CP removed a major obstacle by allowing the Vietnamese market to integrate with global exchanges. This was a turning point, making trading activities more transparent and professional, attracting significant investment from domestic businesses and investors.

Vietnam’s entry into the global commodity trading arena, amid deeper economic integration, comes with many challenges. In a globally interconnected market, policies need to keep pace with international developments. Moreover, policy synchronization is essential—not only regulations governing MXV’s operations but also those from other related ministries and sectors, such as tax policies, accounting systems, foreign exchange management, and support policies for businesses participating in price hedging for raw materials.

"As the government agency responsible for overseeing commodity trading activities, the Ministry of Industry and Trade closely monitors the market to implement timely policies that align with Vietnam's laws and international practices, while ensuring effective State management over these activities," said Mr. Đặng Việt Hưng.

Currently, the Ministry of Industry and Trade is in the process of drafting a new decree to replace Decree 158/2006/ND-CP and Decree 51/2018/ND-CP. This new decree will be adjusted to align with current realities, aiming to fully "liberate" commodity trading activities and allow the market to develop in accordance with its true potential. It will serve as a platform to propel Vietnam's economy to new heights, both regionally and internationally.

Source: Government News