Commodities Trading Far Outstrips Tourism, New Swiss Stats Show
(Bloomberg) -- The economic importance of the commodity trading sector in Switzerland is larger than previously believed, new government statistics show.
With revenues of about $33 billion in 2018, the industry accounted for 4.8% of Switzerland’s gross domestic product, the State Secretariat for Economic Affairs said. That’s up from previous estimates of about 4% and far larger than the Alpine country’s vaunted tourism sector, which contributed 2.9% to Switzerland’s GDP the same year.
The country was home to about 900 commodities trading houses in 2018, handling raw materials ranging from wheat to copper to crude oil and directly employing about 9,800 people, the government’s Federal Statistics Officer and SECO said Monday.
Commodities traders have long been drawn to Switzerland for its laissez-faire attitude to regulation, low taxes and central location that allows traders to easily communicate with staff in Asia, Europe and the Americas in the same day.
Traders have thrived during the pandemic, taking advantage of wild commodity price swings to enjoy record trading profits, and so are likely to now have an even greater impact on the country’s economy as industries like tourism struggle.
Centered in the French-speaking cities of Geneva, Lausanne and the German-speaking canton of Zug, Switzerland is home to or represents major trading headquarters for firms including Glencore Plc, Vitol Group, Trafigura Group, Cargill Inc., Gunvor Group and Mercuria Energy Group Ltd.
Swiss voters rejected a proposal in November that would have held Swiss companies, including trading houses, legally accountable for human rights violations abroad. The initiative was supported by a majority of voters but not a majority of cantons which is required to pass into law. A government-backed counter proposal addressing the issue that was supported by the trading industry is expected to be adopted.
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