Louis Dreyfus completed the first agricultural commodity trade through blockchain
Louis Dreyfus Company (LDC), Shandong Bohi Industry Co., Ltd (Bohi), ING, Societe Generale and ABN Amro successfully completed the first full agricultural commodity transaction using a blockchain platform.
"For the first time ever in the agricultural commodities sector, this trade included a full set of digitalised documents (sales contract, letter of credit, certificates) and automatic data-matching, thus avoiding task duplication and manual checks. The transaction, which mirrored the paper-based process, demonstrated significant efficiency improvements for all participants in the chain. Time spent on processing documents and data has been reduced fivefold. Other benefits include the ability to monitor the operation's progress in real time, data verification, reduced risk of fraud, and a shorter cash cycle," LDC informed.
The Easy Trading Connect (ETC) platform was designed to digitalise and standardise commodity transactions. It was first validated with an oil cargo transaction in February 2017, with the subsequent launch in November 2017 of an energy consortium aiming to offer ‘blockchain-based’ services to the energy sector.
The same principle was then applied to develop a blockchain-based platform tailored to agricultural commodities trading, in collaboration with the various participants in such transactions. This new, adapted ETC platform accommodates the agricultural sector’s complex and rigorous documentation chain flows, covering not only the financing aspects, but also the full set of relevant documents pertaining to a transaction, such as the signing and processing of the sales contract at the start.
"One thing is clear: the digital revolution is transforming the commodities sector. Distributed ledger technologies have been evolving rapidly, bringing more efficiency and security to our transactions, and immense expected benefits for our customers and everyone along the supply chain as a result," said Gonzalo Ramírez Martiarena, Chief Executive Officer of Louis Dreyfus Company.
The participants noted that the entire cycle was significantly reduced: a fully digital transaction modeled the traditional 11-14-day process and took only 4 days.
Earlier it was reported that the Ministry of Agrarian Policy and Food of Ukraine in cooperation with the State Agency for Electronic Management launched an updated State Land Cadastre that will work through blockchain.