Sugar traders are looking to fix industry woes by implementing blockchain technology, following the steps of agricultural merchants who have already used the tech to help streamline trading and shipping transactions, Bloomberg reported on February 14, 2019.
Sugar Traders Want to Use Blockchain To Fix Industry Problems
Originally created for supporting the existence of cryptocurrencies, blockchain technology has found its application in numerous industries since its inception. Decentralization has enabled everyone from small startups to large corporations to solve problems such as inefficiency, complex bureaucracy, and lack of transparency.
Some of the biggest improvements were seen in supply chains and systems in the agriculture industry. Pushed by the incredible success of such systems in agriculture, sugar traders have also become interested in using the distributed ledger technology for themselves.
According to a February 13 Bloomberg report, sugar traders are looking at using blockchain technology to help streamline trading and shipping transactions. Jamal Al Ghurair, part of one of Dubai’s richest families and managing director of refining giant Al Khaleej Sugar, called a meeting with the company’s stakeholders to discuss the issue.
The company’s board agreed to study different solutions to the problems the sugar industry is facing, which includes blockchain. About 50 people attended the gathering, Bloomberg reported, including bankers from ABN Amro Bank NV and Societe Generale SA, as well as blockchain startup incubator ConsenSys.
Looking For Solutions to Sugar Trading Brings Industry Giants Together
Apart from the press blockchain has gotten in the past year, one of the biggest reasons why the technology is gaining traction among commodities traders is money. Trading companies, especially those in the sugar industry, are working with extremely tight profit margins and are looking for ways to increase their profitability.
The Dubai Blockchain Declaration was created to address the issue of profitability by bringing together the biggest players in the industry. The group follows suit of four longtime agribusiness rivals that decided to join forces in order to standardize and digitize trade. Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc. and Louis Dreyfus Co., known as the ABCDs of the industry, are all researching blockchain and AI in order to cut costs and increase transparency, Bloomberg reported.
“Nobody can do this job alone, it has to be done together,” Al Ghurair said. “For us, first of all, it’s transparency, security, and speed.”
According to Bloomberg, the newly formed sugar group will be led by former executives from Coca-Cola, R.J. O’Brien & Associates, and the Sugar Association of London.
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