First Russian grain cargo traded using blockchain

The first physical trade of a wheat cargo in the Black Sea using blockchain technology was recorded on Monday in the latest step towards broader adoption of the digital ledger in agricultural trade.

Switzerland-based Transoil bought 25,000 mt of Russian-origin 11.5% protein wheat FOB Novorossiysk for December 10-20 delivery from Solaris, with the terms of the deal recorded on the Stellar blockchain and using a platform created by Swiss technology start-up Cerealia.

“All the important details about the trade (the proof of the contract, digital identities of the traders, timestamps and expiry time) have been implemented, encrypted and stored on the blockchain,” Cerealia CEO Andrei Grigorov said in a statement.

Blockchain is a digital ledger that allows information to be distributed, but not copied and is increasingly being researched and trialled by large commodity traders as a way of improving mid- and back-office execution functions.

And Monday’s trade was the latest in a series of deals that shows increasing interest from the agriculture trade in new risk management tools.

In May, HSBC said it executed the first scalable trade finance deal using blockchain technology when a shipment of Argentinian soybeans changed hands between Cargill subsidiaries.

And in October a rare joint statement between agribusiness giants Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus said they would work together to develop shared blockchain and artificial intelligence technologies.