The enhanced Easy Trading Connect (ETC) blockchain prototype reduces time spent on processing documents and data from hours to minutes, and allows for a larger trading scope

ROTTERDAM, THE NETHERLANDS, 22 January 2018, Louis Dreyfus Company (LDC), Shandong Bohi Industry Co., Ltd (Bohi), ING, Societe Generale and ABN Amro have successfully completed the first full agricultural commodity transaction using a blockchain platform.

For the first time ever in the agricultural commodities sector, this trade included a full set of digitalised documents (sales contract, letter of credit, certificates) and automatic data-matching, thus avoiding task duplication and manual checks. The transaction, which mirrored the paper-based process, demonstrated significant efficiency improvements for all participants in the chain. Time spent on processing documents and data has been reduced fivefold. Other benefits include the ability to monitor the operation's progress in real time, data verification, reduced risk of fraud, and a shorter cash cycle. The platform’s success demonstrates the immense potential of distributed ledger technologies to advance commodity trading and financing.

The Easy Trading Connect (ETC) platform was designed to digitalise and standardise commodity transactions. It was first validated with an oil cargo transaction in February 2017, with the subsequent launch in November 2017 of an energy consortium aiming to offer ‘blockchain-based’ services to the energy sector. The same principle was then applied to develop a blockchain-based platform tailored to agricultural commodities trading, in collaboration with the various participants in such transactions. This new, adapted ETC platform accommodates the agricultural sector’s complex and rigorous documentation chain flows, covering not only the financing aspects, but also the full set of relevant documents pertaining to a transaction, such as the signing and processing of the sales contract at the start.

In this test, the enhanced platform was used to execute a soybean shipment transaction from the United States to China and covered the full complexity of the operation, including a larger number of participants and a broader scope. The transaction involved user participation on the blockchain-based platform by teams from Louis Dreyfus Company as the seller and Bohi as the buyer, with banks issuing and confirming the letter of credit. Russell Marine Group and Blue Water Shipping also participated in the process, issuing all required certificates. The U.S. Department of Agriculture (USDA) provided valuable insights on how to include phyto-sanitary certificates in the process.

ING, Societe Generale, ABN Amro and other major industry players such as LDC have a long-term ambition to improve security and operational efficiency in the commodity trading and finance sector through digitalisation and standardisation.

"One thing is clear: the digital revolution is transforming the commodities sector,” said Gonzalo Ramírez Martiarena, Chief Executive Officer of Louis Dreyfus Company. “Distributed ledger technologies have been evolving rapidly, bringing more efficiency and security to our transactions, and immense expected benefits for our customers and everyone along the supply chain as a result. The next step is to harness the potential for further development through the adoption of common standards, and welcome a truly new era of digital trade flow management on a global level."