Trade Finance In Focus

Last Thursday, on the 31st of March, we had the pleasure of getting back to in-person events in Sydney for an evening panel discussion on trade finance trends and insights for business owners in Australia.

We want to thank our sponsor Skyward Financial for making this event possible.

The evening started with a presentation from Max McFarlane on what is trade finance, how big is the market globally, and what is the situation in Australia.

Please find the presentation slides below:

Max also highlighted an interesting documentary from WSJ released earlier in March on critical supply chain issues that are affecting global trade due to the COVID-19 pandemic. Watch the documentary here.

Then Peter Munckton from Bank of Queensland gave us an overview of the global economic factors affecting trade finance in Australia. He gave us some impressive stats on the impact of the war in Ukraine and the global dependency on Russian resources.

Although the Russian economy represents 2% of the global economy, it represents 60% of global exports.

70% of sunflower oil is from Russia or Ukraine.

Please refer to our dedicated member Country briefs our on website for more economic facts including DFAT’s Trade & Economic Fact Sheet and Austrade’s Market Profile: https://pit.org.au/members/

Following Peter’s presentation, the audience had the pleasure to hear from our industry panelists on some trends. Our panelists expressed that there are an increasing number of applications from business owners for trade finance solutions that are being rejected due to a lack of preparation, some advice from our panelists were:

Structuring their payment terms is critical.

Do some scenario planning: especially with our current context (bushfire, droughts, war, etc.)

Luke Jokovic made a point on the strong resilience in the SME market, especially enabled by government stimulus throughout the COVID-19 pandemic.

David Verschoor from Grow Finance mentioned that there is a new trend around the use of data to backtrack how customers are using money to buy goods. Many fintech companies are currently assisting with that, especially on the use of blockchain to trade finance. Please refer to this article from CB Insights: https://www.cbinsights.com/research/banks-regulators-trade-finance-blockchain/

See here for the latest financial report from Export Finance Australia including some of their results for their customers and the Australian economy in 2020–2021.

If you’d like more information on global trade finance here are some useful reports: