Andrei Grigorov, founder & CEO of Euro Trust Trading for almost 13 years, is a grain trader with over two decades of experience. Cerealia has been undergoing trial since 2018.
Both Russia and Ukraine are large wheat producers. As per the UK’s Agriculture and Horticulture Development Board (AHDB), both countries are forecast to produce 112.5 MT out of the global production outlook of 763.4MT during the 2019/20 season, reflecting 15% of the overall produce. Nevertheless, both are major exporters.
During 2019 GlobalGrain conference, Grigorov justified the use of blockchain for commodities because the technology paves way for the real-time payments, exchange of digital assets and other kind of value over the internet. He cited the grain trade industry’s obsolete state where physical documentation and fax are still being used.
With respect to functions, the market place displays all bids and offers, and digital signature is applied when a contract is bought. All bids and offers are stored on the Stellar public blockchain, and when a contract gets sealed, both contract and signatures get documented.
Similarly, for post-trade handling, any distributed records are recorded on the blockchain. In every case, it is hashes or fingerprints of the records being saved on the blockchain rather than the documents itself.
Grigorov, as per Bloomberg “Traders can now be 100% certain they really did the trade, versus traditional over-the-phone brokerage. Instantly, they have digitally signed contracts and blockchain-registered records’ forever.”
So far the most notable step taken in the agro commodities industry is Covantis, which is supported by some of the renowned agricultural enterprises such as ADM, Cargill, Bunge, Glencore, Dreyfus and COFGC. However, there are several more, including GrainChain, aided by Overstock’s Medici Ventures, and the Dubai Multi Commodities Centre (DMCC), which has its Agriota E-Marketplace.