Sugar Traders Follow Agri Giants in Seeking Blockchain Fix
(Bloomberg) -- Sugar traders are following the world’s top agricultural merchants in looking at using blockchain technology to help streamline trading and shipping transactions.
In a meeting called by Jamal Al Ghurair, part of one of Dubai’s richest families and managing director of refining giant Al Khaleej Sugar, stakeholders agreed to study solutions for the sugar industry, including a digital platform. About 50 people attended the gathering, including bankers from ABN Amro Bank NV and Societe Generale SA, as well as blockchain startup incubator ConsenSys.
The working group -- the Dubai Blockchain Declaration -- follows an unprecedented step by four longtime agribusiness rivals to join together to standardize and digitize trade. Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc. and Louis Dreyfus Co., known as the ABCDs of the industry, last year outlined plans to look at blockchain and artificial intelligence to help cut costs and increase transparency.
“Nobody can do this job alone, it has to be done together,” Al Ghurair said in an interview. “For us, first of all, it’s transparency, security and speed.”
Blockchain is gaining traction among commodities traders, who hope that platforms underpinned by the digital ledger system will save them money at a time when profit margins are being squeezed. Dreyfus last year said it struck the first farm commodity trade to use the technology when it sold a cargo of U.S. soybeans to a Chinese company.
The sugar group will be led by industry veterans including Jacob Robbins, chief executive officer of agribusiness Emeterra and a former sugar buyer at Coca-Cola Co. It’ll also count on the expertise of Jeff Bauml, who has decades of experience at companies including R.J. O’Brien & Associates and Phillip Brothers, as well as Nigel Durham of the Sugar Association of London, a body that designs contract rules for the sugar industry.
The Dubai Blockchain Declaration plans to ask the industry for feedback in two weeks, Al Ghurair said. If a platform is developed, it could save time, money and resources and make trading faster and more efficient.
“Speed is very important today,” Al Ghurair said. “You don’t want to have too many people in the back office doing the job.”
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