Crop Trading Giants Start Blockchain Platform With Brazil Deals

Andy Hoffman, Bloomberg News

Soybeans are sold at a stall in a wholesale grains market in Shanghai, China, on Tuesday, June 16, 2020. Chinese soy processors need more soybeans for the fourth quarter and early next year as supplies from Brazil taper off seasonally. Photographer: Qilai Shen/Bloomberg , Bloomberg

(Bloomberg) -- Covantis, a blockchain-powered digital operations platform backed by some of the world’s biggest agricultural commodities traders, started operations with bulk soybean and corn exports from Brazil.

The joint-venture, controlled by trading houses including Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc., Louis-Dreyfus Co., Cofco and Glencore Plc’s Viterra, went live on Thursday, Geneva-based Covantis said on its website.

The biggest foodstuffs traders are betting the platform, underpinned by the digital ledger system, will streamline transactions and increase transparency and security. It could also save them money by reducing administrative costs, they said.

The joint-venture hopes to expand to other markets after the pilot programme for Brazil bulk exports, the company said.

Much of the commodities trading industry is looking to digitize operations, with a series of industry-player-backed initiatives. However some of the biggest oil and metals traders including Vitol Group and Trafigura have, so far, resisted joining the digital startups targeting the industry such as oil trading platform Vakt and digital trade finance tool Komgo SA.

Those firms have said they prefer to use their own in-house digital trading platforms and trade finance procedures.