Sacombank Commodity Trading Exchange Joint Stock Co (Sacom – STE) officially opened its new sugar exchange on March 30, 2010. Previously, hundreds of sugar producers had attended the information disclosure session for trading in the new exchange; however, the sugar-cashew exchange has not met the rising demand of enterprises.

The investors who would like to trade their sugar products on the exchange are required to open their accounts at Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank). Both seller and buyer will make transactions under two methods of immediate delivery and future delivery with the maximum deadline of four months. There will be four sugar products of RE1, RE2, RS1 and RS2 to be traded on the exchange. However, in fact there are different products with various criteria and prices, apart from the four products listed on the sugar exchange.

According to the participants in the information session, the sugar exchange has shown many disadvantages and advantages, in terms of criteria of quality and prices.

In addition, if one enterprise would like to trade sugar products on the exchange must deposit the batch value at the exchange's storehouse. The enterprises have to pay additional transportation charges, monthly depository charges by 58,000 dong per square metre or 17,000 dong per tonne, and loading charges of 15,000 dong per tonne.

In case the enterprises keep sugar products at their storehouse, the sugar providers have to pay depository charges of 5 million dong per person per month for assigning their staff to manage the registered sugar volume for transaction. Phan Vu Hung, representative of Sacom-STE said the enterprises can sell their products to other buyers if the sugar exchange does not appoint its staff to manage the transactions.

One question from the enterprises that according to the regulations that information relating to trading orders remains unrevealed, the purchasers will not know who are the sellers and they may have to pay transportation charges for their sugar batch.

Meanwhile, when the enterprises deposit their sugar at the exchange's storehouse, the product quality may be decreased or the delivered sugar will not be similar to the product sample.

(Source: Intellasia)