Archer Daniels Midland Company (ADM), Bunge Ltd, Cargill Incorporation, and Louis Dreyfus Company (LDC), known as the ABCDs of global grain trading, are investigating blockchain to improve efficiency and transparency for customers.
The four global agricultural leaders will create an industry-wide initiative and seek participation from agricultural stakeholders. ADM, Bunge, Cargill, and LDC are looking to both "standardize and digitize" global agricultural shipping transactions.
The four are first focused on technologies that can automate the after-trade processes of grain and oilseed exchanges, as these processes are currently manual and costly. The agricultural industry spends "significant amounts" of money moving documents, explains the press release.
An estimated 275 million emails are sent each year by commodities traders to transmit 11,000 shipments of grain across the ocean. The collaborators hope to shorten document-processing times, reduce wait times, and enhance visibility of contracts through "emerging digital technologies" such as blockchain and artificial intelligence.
Longer term, the four companies want to replace other manual, paper-based, processes tied to contracts, invoices, and payments with a "more modern" approach.
Though it outlines the expected benefits of blockchain utilization, the release does not provide any detail as to how the four will proceed with their investigations or what technology platforms they might consider.
That said, LDC does have some experience in using the Ethereum-based platform Easy Trading Connect. Ian McIntosh, LDC's CEO, spoke of the company's experience participating in the first trade of soybeans using blockchain technology in January 2018: "LDC completed the first agricultural commodity transaction through blockchain, which showed the technology's capacity to generate efficiencies and reduce the time usually spent on manual document and data processing."
Indeed, that pilot found that Easy Trading Connect reduced the document-processing time by a factor of five. Jointly developed by ING and Société Générale, both of which are financial services companies, the Easy Trading Connect platform could be a platform that the four agricultural firms consider in their new drive to improve trade efficiency.