From April 23-26, 2024, the delegation of the Mercantile Exchange of Vietnam (MXV) visited and engaged in productive discussions with prominent Commodity Exchanges and esteemed partners in China. This visit holds immense importance in fostering collaboration and advancing the development of the commodity trading market between the two nations.

Promote cooperation with the Chinese market

Throughout the journey, the delegation from MXV, headed by Mr. Nguyen Ngoc Quynh, Corporate Vice President, paid visits and held productive meetings with prominent institutions such as Dalian Commodity Exchange (DCE), Shanghai Futures Exchange (SHFE), Shanghai Gold Exchange (SGE), and Orient Futures Company.

DCE and SHFE rank among the top three commodity exchanges in China and are also among the top 10 globally. On the other hand, SGE has consistently held its status as the world's largest physical Gold Exchange for many years.

The Mercantile Exchange of Vietnam (MXV) paid a visit to the Shanghai Futures Exchange (SHFE) headquarter and engaged in productive discussions.

During the meeting, the partners candidly discussed their hands-on experiences with MXV regarding the implementation of professional activities like price hedging, risk management, member management, and transaction clearing to establish and manage the commodity trading market in a transparent, professional, and efficient way. Furthermore, collaboration topics on market training and human resource development were also discussed based on decades of experience in market building and growth in China.

Partners all affirm that Vietnam is the fastest growing commodity trading market in the region. As the Governments of Vietnam and China continue to enhance bilateral relations, collaborating with MXV will play a crucial role in the strategic plans of Commodity Exchanges in China in the coming years.

Mr. Nguyen Ngoc Quynh stated that in the second quarter of 2024, MXV is expected to finalize the transaction with Exchanges in China. Furthermore, establishing connections with the vast market of billions of people will create favorable prospects for local businesses and investors to enhance efficiency in price insurance and investment operations.

Experience in building a Pork Exchange

In 2024, as per the strategic plan, MXV is set to establish dedicated commodity trading platforms for Vietnam's key products, with the Pork Exchange in Ho Chi Minh City leading the way.

As the leading Exchange in the largest pork production market in the world, DCE has long-standing experience in listing and organizing pork trading in China. As per the report provided by DCE, an estimated 1.6 million tons of pork will be traded daily through the Exchange in 2023. Throughout the working trip, MXV consistently engaged in knowledge sharing with DCE, covering various aspects such as selecting pork product varieties for trading, pig breeds, stringent quality control procedures, and the pork delivery process, among others.

Working session between MXV and DCE

Along with that, MXV provided additional insights into the size and attributes of the pork industry in Ho Chi Minh City. Mr. Wang Weijun, Executive Vice President of DCE emphasized: "DCE is always ready to support and share experience so that MXV can operate the Pork Exchange well. DCE also hopes that the two Exchanges can connect transactions as soon as possible in the near future."

Modern information technology and physical commodity delivery system

During the visit, the MXV delegation visited DCE's Data Center. This center has a total area of up to 10,000 m2 and over 1,200 server cabinets and modern technological infrastructure. DCE's system is fully equipped to handle the trading requirements of millions of accounts seamlessly.

MXV's delegation visited DCE's Data Center

Furthermore, DCE and MXV made a visit to Dalian port. This port is renowned as the second largest container transshipment hub in China, encompassing a vast land and water area of 346 square kilometers. It boasts a dedicated rail system spanning 160 kilometers, warehouses covering 300,000 square meters, and a container yard spanning 1.8 million square meters. With 80 specialized docks, the port is capable of accommodating ships weighing up to 500,000 tons and is connected to over 300 ports in 160 countries and various territories worldwide. Notably, this serves as DCE's primary port for forwarding agricultural products, and it has witnessed active physical goods delivery operations by DCE over the years.

During this visit, MXV will gain insights and commit to the objective of digital transformation, catering to the growing transaction demands of enterprises and investors in Vietnam. Additionally, efforts will be made to enhance and broaden freight forwarding activities for our nation's key commodities like coffee, pepper, and cashews for export; as well as importing animal feed ingredients, among others. MXV will persist in collaborating with DCE specifically and Chinese partners in general to establish a productive commodity trading pathway for the local market, thereby bolstering the growth of the trading sector and the Vietnamese economy as a whole in the near future.

Huong Nguyen