What is Trade Finance?

Switzerland and greater Geneva area, the Global hub for Commodity Trade Finance

The greater Geneva area (including Canton of Vaud) has become a pivotal location for commodities since the middle ages due to its location. We estimate 400 companies to be present in this part of Switzerland. It includes commodities merchants, shipping and logistic companies, insurance, brokers and commercial banks.

Slide sccf-Structured-Commodity-Trade-Finance-field-vignette sccf-Structured-Commodity-Trade-Finance-wheat-vignette sccf-Structured-Commodity-Trade-Finance-copper-vignette
How it works

Traders in Geneva manage the delivery of a wide array of XXX and semi transformed commodities across the globe without their transiting through Switzerland. They raise financing and manage the risks when coordinating shipments.

Slide Purchase of large quantities of commodities throughout the world Transformation
or refining Transport
and Inventories Delivery of the commodities to
the final buyer 4 1 2 3 Purchase of large quantities of commodities throughout the world Transformation
or refining Transport
and Inventories Delivery of the commodities to
the final buyer 4 1 2 3

The main global hub

Grains Trading
Coffee Trading
Sugar Trading
Petroleum Trading

History

Slide Incorporation in Geneva of Tradax, a subsidiary of Cargill, the world’s leading trader of agricultural products and of Phillip Brothers in Zug 1956 Mass exodus of a large number of Egyptian cotton traders (after nationalisation of the Suez canal by Nasser) seeking a safe haven in the region of Lake Leman where they continued conducting business. 1962 Paribas, first bank starting commodity trade finance based on collateral of goods. Including March Rich and other large commodity traders. 1978 Incorporation of STSA, Geneva staffed by ex bankers and trade finance professionals to provide a voice in Bern for the Trade Finance and shipping world. Exponential increase of members over the following years. 2006 Incorporation of large oil traders. Making Geneva one of the biggest hub for commodity trading. 1/3 of oil volume worldwide. 1972 Due to new regulations, Trade Finance banks start to increase minimum level of equity for SME’s. 2016 Trade Finance banks are focusing on major commodity traders. Smaller ones are left and are looking for alternative financing , such as Horizon Capital. 2018

A major sector in Geneva…

200
number of companies active in the domain of Trade Finance in the canton of Geneva.
2000
number of direct jobs linked to Trade Finance
1%
contribution to the Canton’s tax revenues by Trade Finance companies
1%
the portion of Geneva’s GDP linked to Trade Finance

…and in Switzerland

From0
to 25
number in CHF Bios of gross tax revenue linked to Trade Finance between 2002 and 2017
3.0%
the portion of Swiss GDP linked to Trade Finance
100
the number of container ships in Swiss hands
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