The United Arab Emirates (UAE) has reaffirmed its status as a global commodity trading powerhouse, maintaining its second-place ranking on the Commodity Trade Index, revealed the Dubai Multi Commodities Center’s (DMCC) Future of Trade 2024 report. This prestigious ranking underscores the UAE’s robust infrastructure and strategic vision, which continue to drive its dominance in the commodity trade sector.
The DMCC Commodity Trade Index 2024 evaluates 10 major trading hubs, using 10 specific sub-indicators that encompass locational advantages, commodity wealth, financial services, logistics infrastructure, and institutional strength. These comprehensive metrics, sourced from global institutions such as the World Bank and the United Nations, provide a holistic view of each hub’s role in global trade.
Commodity wealth and institutional strength
Amid increasing trade regionalization due to geopolitical tensions and supply chain restructuring, the UAE has capitalized on its strategic location and robust infrastructure to transform into a global commodity trading hub. The country led the category of commodity endowment factors with a remarkable 77 percent due to its abundant oil reserves. Additionally, the UAE improved in institutional factors, scoring 66 percent and climbing to fourth place, thanks to attractive tax policies and robust trade logistics infrastructure.
“The strategic location, world-class infrastructure, and business-friendly policies in Dubai provide us with a cutting edge that continues to attract businesses and investors from around the world,” commented Feryal Ahmadi, COO, DMCC. Ahmadi also reiterated the center’s commitment to shaping the future of commerce, driving sustainable growth, and fostering meaningful partnerships.
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Global commodity trading landscape
The United States retained the top spot on the Commodity Trade Index with a score of 59 percent, showing strong performance across all categories, particularly in commodity factors and institutional strength. Switzerland emerged right below the UAE as a new contender in the top three with a 46 percent score, excelling in locational and institutional advantages as a commodity trading center.
Singapore and Hong Kong also made significant strides, ranking fourth and fifth respectively. Conversely, the Netherlands and the United Kingdom experienced notable declines. The relocation of Shell’s headquarters from the Netherlands to the U.K. affected the nation’s locational score. Meanwhile, the U.K.’s Brexit-induced tariffs and high corporation tax further impacted its ranking.
China, South Africa and Nigeria remained at the bottom of the Index, despite their rich natural resources. These countries face challenges due to weaker institutional support and locational disadvantages, which hinder their potential in the global commodity trade arena.
Eight of the 10 hubs saw a decline in their Commodity Trade Index scores with the gap between the top and bottom performers continuing to widen. This underscores the major impact of geopolitical tensions and macroeconomic conditions on global trade.
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