A rising number of traders are setting up base in Dubai as the emirate strengthens its position as a centre for commodity trading.
The Dubai Multi Commodities Exchange (DMCC) based in Jumeirah Lake Towers (JLT) FreeZone saw more than 2,033 new clients register at the exchange in 2012, an increase of 50 per cent on the 1,362 registrations recorded in 2011.
Speaking at Exporta’s Middle East trade finance conference held in Dubai, Malcolm Wall Morris, chief executive officer of the DMCC, said: “Dubai is emerging as the global gateway for commodity trade.”
Companies that registered last year include Netherlands-based ABN Amro’s International Diamond & Jewellery Group and Pacific Gulf Shipping.
Wall Morris added that the free zone is fast becoming a global hub for diamond and gold trading.
Before the DMCC was created in 2002, the value of the diamond trade in Dubai was roughly $3m-$6m. The value of the physical flow of diamonds passing through Dubai reached approximately $39bn in 2011 and continues to grow, he said.
Similarly, the flow of gold through the region is growing, with $56bn-worth of gold passing through the free zone in 2011, representing 25 per cent of the physically available stock of gold in the world.
Given this level of growth, JLT is on target to become the largest free zone in Dubai in the next few months, Wall Morris said.
During 2013, the DMCC will be looking to launch new products and services, with a particular focus on providing Islamic finance tools.
The DMCC was set up as a strategic initiative by the Dubai government to boost the flow of commodity trade flows through the region. The exchange is also the master developer and licensing authority for the JLT Free Zone.
As well as providing the physical infrastructure for trading companies, the DMCC is also working on creating regulation to govern the trading of precious metals and gems in Dubai.
It manages the UAE’s Kimberly process office, which makes sure UAE-based rough-diamond traders comply with international standards that prevent conflict diamonds being traded in the region.