Swiss-based blockchain platform Cerealia has gone into production. The commodities marketplace is initially targeting the grain trade in the Black Sea area encompassing Russia, Ukraine and eastern block countries on the one side and in the Mediterranean, Turkey, Egypt, Tunisia and Lebanon. Founder CEO Andrei Grigorov was a grain trader for twenty years in the region, latterly with Euro Trust Trading for almost 13 years.
The solution has been running pilots since 2018.
Russia and Ukraine are major wheat producers. According to the UK’s Agriculture and Horticulture Development Board (AHDB) for the 2019/20 season, the two countries were expected to produce 112.5 Mt out of a world forecast of 763.4Mt or 15% of the market. However, the countries account for a larger proportion of exports.
At last year’s GlobalGrain conference, Grigorov explained that using blockchain for commodities seemed obvious because blockchain enables the internet of value, including the exchange of digital assets and instant payments. He pointed to the grain trade sector’s archaic state where paperwork and fax are still in use.
In terms of functionality, the market place shows typical bids and offers, and when contracts are entered into, they are electronically signed. Transactions and the documentation are stored via a public blockchain. We’re assuming it is hashes or fingerprints of the documents being stored as opposed to the documents themselves. We plan to update the article with details.
“Traders can now be 100% certain they really did the trade, versus traditional over-the-phone brokerage,” said Grigorov, according to Bloomberg. “Instantly, they have digitally signed contracts and blockchain-registered records’ forever.'”
The biggest initiative in the agricultural commodities sector is Covantis, backed by the world’s largest agribusinesses, ADM, Bunge, Cargill, Dreyfus, Glencore and COFGC. But there are several others, including GrainChain backed by Overstock’s Medici Ventures and the Dubai Multi Commodities Centre (DMCC) has its Agriota E-Marketplace.