SINGAPORE – A new blockchain platform is set to help farmers receive payments for their goods more quickly, enabling parties in the supply chain to look into the sources of their commodities and making it easier for them to learn more details of their trade as well.
For a start, the electronic platform connects about 4,500 farmers in Australia to global end-customers such as supermarkets and restaurants.
This means parties in the supply chain can check pricing and supply information in real-time, carry out transactions, as well as track the delivery of orders on the go. The transactions can be in any currency.
The platform is a collaboration between Singapore’s DBS Bank, commodity trading company Agrocorp International and blockchain provider Distributed Ledger Technologies.
It is expected to expand its reach beyond Australia over the next year or so to other origin markets such as Canada, Myanmar and Ukraine.
Speaking to The Straits Times ahead of the platform’s launch on Thursday (Nov 1), 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, he added, for such documents to be ready and presented to a counter-party to verify that the goods have indeed changed hands.
“There are two age-old processes that we are trying to revolutionise with this platform,” he said.
“One, you will be able to see a faster, more efficient generation and transfer of documents and, as a result, we will also be able to make and receive payments more efficiently.”
The time savings allow goods to be shipped out more quickly as well, reducing detention charges at storage centres, as well as the amount of interest parties pay to the banks which fund their trade flows, he noted.
“The second thing is that we are able to provide a better degree of transparency to our end-customers with regard to where a product is coming from,” he said.
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.
DBS said in a statement on Thursday that transparency is heightened with details of each trade and the sources of commodities now stored on the platform, and buyers can easily trace such information to achieve sustainability objectives.
Mr Raof Latiff, DBS’ group head of product management for global transaction services, said banks presently do not get “full visibility” of, among other things, “what happens in the farm, what is produced in a farm, and what is given to a trading company in Australia, and how that particular commodity is sold to a commodity house in Singapore”.
But the knowledge is important, he said, especially with Singapore hosting major trading hubs and procuring agricultural products not just for local consumption but also for international use.
Bringing the players together “gives the bank complete transparency of where the physical supply chain is” and allows the bank “to understand what obligations are due from these transactions, such as what payments need to be made”, he added.
Enterprise Singapore figures show trade in commodities, including agricultural products, contributed over $28 billion in local business spending and hired about 15,300 professionals over the past five years.
The plan is to get more users on board the platform.
“The only way this will be successful is for wider adoption… You can’t have each bank and each company in our industry using their own platform,” said Mr Vijay, who noted that it took over US$100,000 (S$138,000) in terms of time and resources for the company to set up the platform.
“We are committed to not keeping this as something that is strictly owned and operated by Agrocorp, but rather something that is open-source, shared, and get more of our suppliers and customers to come on board,” he added.
“Banks like DBS can also start using it for its own transactions as well with more of its clients, not just Agrocorp.”
Yesterday night at the 3rd edition of CXO Honour’s enterprise IT industry leading premier event – Red Carpet HONOUR 2018, held at The St Regis Singapore, DLT.sg was awarded the Best Blockchain App for Supply Chain.
This gala event celebrated the CXOHONOUR® AWARDS 2018, an industry recognition program that honours innovative tech providers from the enterprise IT industry. The Top Honours were endorsed by an independentof eminent CXOs comprising of CIOs, CFOs and CISOs based on the results from an industry wide CXOHONOUR® PULSE Poll that solicited opinions from 500+ end user CXOs and Senior IT decision makers in Singapore. These Top Honours was shared with the wider industry at the Red Carpet HONOUR event.
DLT.sg is very honoured to receive this award.
A lot has been written about how blockchain would transform the international trade. So, this is not yet another blog on the same lines, but I intend to throw some light on its adoption & traction we are seeing with International traders and what International traders are doing to stay relevant to drive the competitive differentiation using our purpose built DLTLEDGERS trusted Trade Platform.
Obviously, there are many moving and laborious parts in the international trade process. For example a shipment of green mungs bean from Australia to China can result into a pipe of paper 25 centimeters high and cost of handling it can be higher than cost of transporting the containers leave aside the time lost in the process.
Since early this year when we launched our DLTLEDGERS Trade Platform, we have seen a great traction with international traders with hundreds of traders are taking advantage of running their first trade in blockchain saving both time and money. We have several traders who are running multiple trades using our DLTLEDGERS platform on a daily basis.
With DLTLEDGERS platform we are democratizing the access of the trade platform and making it easy for an international trader to sign up, set up their business partner and operationalize their trade in blockchain in 10 mins. It no longer requires huge capital investment, cutting knowledge on part of a trader or a big team to pull this off. Trader can sign off and get set in less than 10 mins to use the DLTLEDGERS platform. This also bridges the gap between larger traders and small or mid-size traders, offering the same services for all. We have simplified it into a size and form which can be understood and applied for a trader, who needs faster movement of his cash.
Guess what we have several traders who are live using our DLTLEDGERS Platform and doing their real blockchain trade every day with a fraction of the cost. We truly believe that we are doing our bit to democratize and provide trader of all sizes access to this disruptive technology to push their competitive advantage.
Some of the benefits that traders have seen in our DLTLEDGERS Platform relates to platform
-Save money in your trade process (up to 2000 dollars saving in your trade)
-Discount and incentive from Banks on your trade finance if routed through this platform (better credit lines at reduced margin
-Make your cash run faster
-Reduce counter Party risk and Frauds
–Secured audit of the Trade conversations which typically happens on mobile/whatsapp/email conversations w different parties in the private way in a need to know basis
With DLTLEDGERS Traders are able to connect your next International Trade with all parties in a private secured fashion taking advantage of digital issuance of LC, digitizing BL, Quality and other certification documents, ability to trace from source to target and take advantage of better deals to finance your trade and working capital.
Sign up here for your trial at https://dlt.sg/traders-free-trial/
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