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25 Feb 2022

Commodities in Focus - Edition 12 2022

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Welcome to the twelfth edition of Commodities in Focus (CIF); our bulletin for clients engaged in the production, trading, carriage, storage and financing of commodities.

Supply chains are under great strain. In a recent article entitled "Archaic financial plumbing of global trade needs a refit", the Financial Times blamed a “trade finance gap” on the architecture of trade finance “… lift the floorboards and check the plumbing in the form of trade finance… the conduits of trade finance, while not bunged up, could be doing better”.

Many of our readers will agree with the FT that “…trade finance has traditionally been a notoriously opaque and technologically backward area, and a lot of documents for goods trade aren’t even digitised. (It’s not like they haven’t had time to modernise: rudimentary letters of credit date back to Babylonia in 3,000BC.)”.

This issue of Commodities in Focus hosts a very timely article on the transformative potential of digitalisation for trade finance and the steps already taken in an industry ripe for large-scale disruption.

The authors are two new partners who recently bolstered our Marine and International Trade practice, Philip Prowse and Jameel Tarmohamed, and Andrew Green, associate. Alongside decades of experience advising clients on traditional trade finance structures, Philip and Jameel specialise in the emerging area of digitalisation within the trade finance industry.

We hope that you find this bulletin both useful and interesting. If you have any comments or would like to learn more on any topic, please get in touch.

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