Having about a quarter of century in this industry, I have to confess that every second is unique and privileged for commodities traders.
Market ticks, screen flares, our position changes and so does our mind, our pocket.
Market makes us cry or smile and this 2015 is so strange.
Coffee: We struggled to procure even ton to perform our shipments and suffered loss.
Hoarding farmers withholding stock, disturbed flow from highland to port and hiked differential level, are key culprits to deter normal operation.
Suitable tools of risk management applied but some risks were not manageable and we were beaten hard with the exposure.
Every lesson is unique and valuable; no tear is wasted if it turns into positive experiences.
We wonder should a Question mark be suitable for this commodity.
Spices: This is messy and headache stuff as risks come from both sides with any price movements. Price is up then suppliers default, price is down then buyers did not show up. Quality, quantity, payment are so risky and not manageable.
This is surely a Dog in our matrix and we will only do back to back basic with reasonable advance from buyers.
Financial and FX transactions: every coin has two faces. What was star yesterday may be a black-hole another day.
Rogue and irresponsible China together with very sensitive macro picture from FED decision smashed FX traders badly.
August yuan devaluations from China caused kneejerk reaction to local currency, we were hit significantly but still could retreat before rate hikes and this helped minimize our problem.
Rubber: It is another story in the Almighty’s hands.
April and May were difficult moments not only for us but our clients with delayed shipments and funny reference price policy from VRG.
We daily but desperately expected the arrival of golden rain to rubber plantations to start a new crop. Little boy, El Nino, has prevented rains for a while.
Then things are back to track and we hoist the sails. It is not really smoothly but rubber is our star in this 2015 on sales volume, customer relationship and margin.
Our products reached further markets, to more demanding customers with positive feedbacks from them about our performance and professionalism.
Logistic and Agency services: Operation was good and smooth thank to effective coordination and allocation. Fuel cost, improved road condition make transportation less burdensome. Brand awareness is more notable to facilitate agency and representative activities.
We aimed to increase both volume and effectiveness by reaching further to new suppliers, sellers and mode of transactions. This will make us more active, diversified and competitive in serving the principals and other partners in the supply chain.
Called 2015 a bad year, we stand up and march ahead as brave and determined soldiers.
In 2016, some key factors are on our watch such as FED rate decision, China economic picture and money policy, crude oil price and CRB index, potential QE from EU Central bank, fund position in coffee, local exchange rate and lending rate from SBV and neighboring but competing countries, weather pattern with negative influence on coming crops.
Initial studies show FED will keep raising rate. China will be slow and continue mess up with yuan while more devaluations from Vietnam and other producing countries. We are bearish with rubber, crude oil, the index and await more QEs from EU but neutral to coffee while weather may be a bullish factor for commodities in general.
We will not chicken out from coffee but be more reasonable and manageable. Looking at bright sides of this commodity, we can see that our network is well established with sophisticated tools and knowledge above our peers; we absolutely can engage and win by using our utmost advantages.
We will stay firmly but more wisely. We also do so with the financial and FX transactions.
Rubber, Logistic, Agency services and new product (tapioca starch) are our aces with more efforts and concentration from us. Marketing budget and sales team are fully allocated for those operations.
We will aim to Australia, Latin Americans and Middle East for more sales and clients while China and local FDI buyers will be on hold.
Some other items are also on the cards such as feedstuff, milk products or cashew nut. There will be allocation for those but need a bit more time to change gears and with our platform, such change is feasible.
We are now a company of 600billions turnover, with decades of experience, skilled team and fantastic teamwork spirit, professional work attitude and determined mindset, nothing can prevent us from brighter future and successes. Those together with widened network of clients, more credit lines from banks, better practice of work and our new software, are the launching pad for my confidence.
I would like to express my sincere thanks and appreciation to you all, the industrious and dedicated teammates; to our Bank, partners, shareholders, clients, principals and others in the networks who had extended their best support to our business.
I wish you all a Happy New Year in the 2016.