Trade financing in commodities such as crude oil, iron ore and copper in Asia is expected to grow rapidly in the months ahead.
This forecast comes as China continues to buy large volumes of commodities to fuel domestic development.
Experts said that this could create opportunities for Asian banks to enter the trade financing area as current players may not be able to keep up with demand.
China's GDP is estimated to see some seven per cent growth in 2009 and its planned stimulus measures, which involve sizeable infrastructure projects, could boost demand for trade financing in the region.
Experts said this will apply to commodities like oil, iron ore and copper, as China builds its strategic stockpile of such materials.
Eric Saux, regional head of Natural Resources and Energy, Financing, Societe Generale said: "We think there's roughly 10 per cent growth in volume in Asia, which is not small if you compare to the US and Europe. For us at Singapore, our volume for trade finance in Asia is around US$26 to US$28 billion."
SocGen currently handles about 25 per cent of the commodities trade financing in the region and expects its volumes to double in 2010.
SocGen said as volumes increase, Asian banks will have an opportunity to expand in trade financing. That is because the big traditional Western players are having trouble keeping up with demand, thanks to liquidity problems back home.
Mr Saux added: "As China's big companies get out of China, they can get the support of these banks. So I'm perhaps more optimistic in the case of Asia, rather than the consequences for the rest of the world because of the impacts of this economic situation."
And larger and more established lenders like the Bank of China is to lead the way as Asian institutions rush to fill the gaps left by their Western counterparts.
Source: Channel News Asia
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