Almost 25 years after the fall of the Berlin Wall, the countries that once formed part of the Soviet Union are a key source of commodities, from wheat in the plains of Kazakhstan to oil in Azerbaijan and from nickel in Russia’s Siberia to natural gas in Turkmenistan. The former Soviet Union is today the home of some of the world’s top natural resources companies, including Rosneft, Rusal, Norilsk, Kazakhmys, Socar and Gazprom. And energy, metals and agricultural traders are fighting for market share in a region that is set to become even more important in the next decade.

Private pools of money, from sovereign wealth funds to pension funds and private equity groups, are financing the creation of new commodity supply chains, linking oil fields, mines and power plants with consumers. As raising money from public capital markets becomes ever harder, the role of private capital is becoming increasingly important. Trading houses are playing a key role in intermediating between cash-rich investors and entrepreneurs.

The eurozone banking crisis of 2011-12 was a rollercoaster for the trading industry as the banks that have traditionally dominated commodity trade finance cut lending to beef up their balance sheets. Since then, the industry has recovered, but a new risk is on the horizon. With commodities prices still at historically elevated levels and trading volumes rising, the commodities trading industry is more reliant than ever on the growing pool of banks that supply huge bilateral and syndicated loans. But the threat of a higher cost of capital for commodity trade finance assets under new Basel III regulations could mark a watershed for the entire industry.

The commodities trading industry is one of the most capital intensive of all. And trading houses are increasingly taking on long-term obligations as move away from their traditional role as middlemen to invest in assets. How are the funding sources for the industry evolving? And how will the industry – and the commodity markets – cope with a rise in interest rates? Chief financial officers of four of the world’s largest commodities groups discuss the outlook for the industry.