While the Global Shipping Business Network (GSBN) was the highlight of blockchain technology being used in the shipping sector Transoil International and Solaris Commodities made history by conducting the first blockchain based trade deal of Black Sea wheat. S&P Global reported the event on November 12 when the two Swiss based made the pilot transaction by using a blockchain based agricultural goods trading and financing platform. Transoil International and Solaris Commodities are companies involved in trades of international agricultural commodities such as vegetable oil, flour and milling wheat.
The blockchain platform used to perform the trade deal was developed by a Swiss startup Cerealia. The startup in simpler terms is a market place for grain trading, tokenization and financing. It employs blockchain technology to enable efficient grain trading without the paperwork along with secured and trusted storage and agreement of certificates and contracts.
While the exact financial terms of the trade deal have not been revealed, Transoil International and Solaris Commodities accomplished a trade of twenty five thousand metric ton shipment of 11.5 percent protein Black Sea wheat. The shipment was traded on a Free On Board (FOB) loading port basis from Novorossiysk, which is a port city in Russia. It is the first blockchain based trade deal, in light of reports, of Black Sea wheat.
Any possibility of risks and disagreements is minimized as a blockchain supported platform is deployed which potentially improves dispute settlements and allowing for the monitoring of various stages in the transaction. Cerealia was quoted by S&P Global as saying,
An independent auditor has reviewed all the important details of the trade from the blockchain and validated the smart contract, digital signatures, signed document and timestamps. [The auditor] also confirmed that data has been encrypted, that no other data has been stored and that all data is up to date.
Owing to the technological advancements in blockchain and artificial intelligence (AI) the food and agricultural products sector has slowly started to incorporate these technologies in their systems, all around the world. ABCD (Archer Daniels Midland (ADM), Bunge, Cargill, and Louis Dreyfus) which are the world’s largest companies when it comes to trading agricultural products are in agreement to digitize grain trading on a global scale by incorporating blockchain and artificial intelligence technologies.
The previous system relied on paper contracts, manual payments and invoices. The two technologies (blockchain and Artificial intelligence) will be employed to automate post trade execution processes, of grain and oil seed, as they conventionally take up significant portion in the expenditure related to supply chain and are highly manual. ABCD also plans to utilize blockchain technology in different levels of its supply chain such as storage, shipping and customer experience. CEO of Louis Dreyfus Co. Ian McIntosh lay emphasis on how blockchain technology can help out by telling that the technology’s “capacity to generate efficiencies and reduce the time usually spent on manual document and data processing.”
Louis Dreyfus Co. successfully completed its first blockchain based trade shipment, in partnership with four other parties, in January 2018. It sent soybeans from America to China by utilizing the Easy Trading Connect (ETC) blockchain platform. Dairy Farmers of America (DFA), who are a United States national milk marketing cooperative, partnered with food financial technology startup ripe.io in September to pilot a blockchain based venture also aiming to improve the food supply chain. DFA is currently assessing the technology and exploring ways of how the organization can benefit from the use of blockchain.
Holland’s largest supermarket chain, Albert Heijn, in September revealed that it was using blockchain technology to make its production chain of orange juice more transparent. According to reports the system will store data which would reveal the sustainability and quality ratings of various growers of the product, plus information about the fruits as well such as their quality, period of harvest and sweetness intensity. A “Like2Farmer” option which would enable the customers to tip will also be employed in the system. Albert Heijn’s Commercial Director Marit van Egmond said,
We want to make an active contribution on issues that are important to our customers — by making our products healthier, reducing food waste and limiting our impact on the environment. Transparency in the chain is becoming increasingly important.