Singapore set to continue to grow as top commo trading hub in Asia

SINGAPORE'S oil companies and suppliers have been severely hit by the drop in commodity prices. It's estimated that US$1 trillion in planned production projects globally are in danger of cancellation. Despite last week's rollercoaster, leading to a five-month peak in oil prices before sliding down again, there is no clear end in sight for the slump in metals and prices.

Clearly, the impact of the downturn in the global commodities is being felt in Singapore, particularly given its reliance on businesses elsewhere across the region, such as Australia, Japan and South Korea. But what lessons can Singapore learn from previous downturns to sustain its commodities industries? And how can it use its status as an international trading hub to help it weather the cyclical storm?

Singapore's government is very good at the long game, and it needs to continue to show its support for foreign investors. Many trading houses have already moved their bases to Singapore as the centre for growth, rather than places such as Geneva. These companies have been drawn by the sharp rise of commodities demand from Asia, creating a cluster of some of the biggest and most influential names in the industry - Xstrata, Anglo American and BHP Billiton, to name just a few.