Dubai Multi Commodities Centre Authority said its Global Multi Commodity Receipt (GMR) facilitated the financing of over Dh1.1 billion ($299.4 million) in 2009 covering petroleum products, iron and steel and soft commodities including rice and tea.

The DMCCA-operated electronic warehouse receipt system also added enhanced features to cover the pledge of commodities held in vessels within UAE territorial waters in favour of the financier, further expanding the appeal of the GMR, the DMCC said in a statement.

“In these times of tight credit and liquidity, managing risk is a priority for financiers,” said Ahmed bin Sulayem, executive chairman, DMCCA.

“GMR is a valuable risk-mitigating tool, as it secures financing through the intrinsic value of underlying commodities. The financing of over Dh1.1 billion in 2009 alone is a demonstration of financiers’ confidence in GMR’s value proposition in facilitating and expanding trade financing,” he remarked.

The GMR electronic warehouse receipt system enables GMR members to store a variety of commodities in DMCCA-approved facilities managed by independent Collateral Managers.

Electronic warehouse receipts are issued against the stored commodities, enabling electronic title transfers and facilitating trade financing by member banks against the value of the underlying commodities.

Malcolm Wall Morris, chief executive officer - DMCCA, said the GMR has been seeing a growing response from financiers and commodities traders alike, especially in these difficult economic times when robust mechanisms for managing and mitigating risk are considered an imperative to financing working capital.

'It has been recognised for its innovation and risk mitigation and we will continue to enhance its features based on market requirements. As we work with a range of commodity traders and financiers, DMCCA would seek to replicate the success of the GMR-based financing across the full spectrum of commodities,' he explained.

In 2009, new GMR members included three financiers, International Trade Finance Corporation, a subsidiary of Islamic Development Bank, Jeddah; Fimbank, Malta; and Banque Cantonale Vaudoise, Switzerland, a collateral manager, Oil Labs and fifteen commodities traders.

Currently, the GMR system has over 150 members ranging from commodities traders, financiers, collateral managers, vaults and warehouse operators.-TradeArabia News Service