The Straits Times
Singapore’s DBS Bank, commodity trading company Agrocorp International and blockchain provider Distributed Ledger Technologies joined force to set up a new blockchain platform streamline commodity trading process.
Agrocorp’s head of business development Vishal Vijay said the practice has been for parties in the supply chain to wait for physical documents to be generated and passed from one party to another before a transfer of ownership of goods occurs. It typically takes five to 10 days for such documents to be ready and presented to a counter-party to verify that the goods have indeed changed hands.
With the platform, farmers can access commodity prices and register a sale. These sales and purchase agreements are stored digitally on the same system. Upon certain “trigger events”, such as confirmation that goods have been shipped, the system prompts DBS Bank to take action, which includes releasing payment to a farmer. Parties along the supply chain can upload and view related documents on the platform, and their trading partners will need to validate changes to contractual terms before any trade can be made. The transactions can be in any currency.
For a start, the electronic platform connects about 4,500 farmers in Australia to global end-customers such as supermarkets and restaurants. It is expected to expand its reach beyond Australia over the next year or so to other origin markets such as Canada, Myanmar, Ivory Coast and Ukraine.