Blockchain technology making its presence felt in agri-commodity trading

The Covantis blockchain platform, which is aiming to making global agri-commodity trade simple, secure, and efficient, went live in February this year, two years after being created by agribusinesses players with the aim of digitalizing agricultural shipping transactions.

There are over 30 entities signed up as initial users of the platform, including its six founding members – Archer Daniels Midland (ADM), Bunge, Cargill, Cofco, Louis Dreyfus Company and Viterra.

The initial use case covers bulk shipments of corn and soybean from Brazil exported worldwide. But the plan is to extend that coverage to a wider range of grains and oilseeds and to other origin markets.

The ultimate goal of Covantis is to optimize export trade execution processes by connecting shippers, traders, and charterers. It wants to eliminate paper-based post-trade processes to boost efficiency and cut operational risks for bulk shipments of agricultural goods.

Established as an independent legal entity in March 2020, with a base in Geneva, Switzerland, the initiative chose ConsenSys, an Ethereum blockchain technology company, as the lead technology partner to develop its set of digital solutions in January last year.

Covantis tested the platform midway through 2020, conducting a parallel run from early July to mid-August to get feedback, with nearly 30 participants using a test version of the platform, and involving the transportation of 4 million tons of soybeans and corn.

Digitalizing core processes 

A spokesperson for Covantis  told us last year that this initial phase of operation will focus on “digitalizing the core processes involved in the international shipment of grains and oilseeds in bulk such as vessel nominations and substitutions as well as any other contractual notices, string visibility, documents by-pass and circles settlement, appointment of third-party providers, documentary instructions, issuance of drafts and original shipping documents.”