Kathy Gibson is at Fujitsu Forum in Munich – Fujitsu and Rice Exchange have debuted the world’s first global blockchain-based rice trading platform, offering new levels of security, transparency, efficiency, traceability and trust to the $450-billion global rice market.
Ricex is the first digital platform designed for buying and selling rice, one of the world’s largest agricultural commodities.
The platform digitalises rice trading using a blockchain distributed ledger technology (DLT) platform. Through it, buyers, sellers and service providers can easily find each other in a digital environment, efficiently conduct trades, and arrange insurance, shipping, inspection and settlement with the assurance of seamless integration and verifiable data.
“The Rice Exchange platform brings transparency, efficiency and security to the global rice trade,” says Stephen Edkins, CEO of Ricex. “The distributed ledger technology from our partner, Fujitsu, enables us to remove the many barriers that have prevented transparent, low-risk trading in rice and allows trade buyers to purchase this vital food staple with full confidence that they are getting a quality product at a fair price.”
The use of a DLT platform injects new levels of trust and efficiency into the highly fragmented international rice trade. It creates verified, immutable data for all stakeholders, such as buyers, sellers, shippers, inspectors, insurers, regulators and payment system operators.
By using a distributed ledger, the platform removes friction and delays in the supply chain, ensuring security and transparency in international rice trades by allowing all stakeholders to see the same verifiable data, in realtime.
For example, the Ricex platform allows buyers to search for rice that has been certified as sustainably-grown. This gives buyers certainty about the provenance of the rice and in turn allows producers to charge a premium for their product.
Frederik De Breuck, head of the Fujitsu Blockchain Innovation Centre in Brussels, says: “Sustainability, track and trace, and provenance are at the heart of the Rice Exchange, which is another powerful example of the real-world use cases for blockchain.
“Ricex has shown great vision in adopting Fujitsu’s approach to distributed ledgers as a supplementary layer in larger enterprise architectures, and not end-to-end solutions by themselves. We have placed a focus on making sure the DLT can interoperate with existing infrastructures. This is how we deliver true value from investment in this exciting new technology.”
Fujitsu is delivering a production-ready, private, permissioned DLT scale-out solution running on Hyperledger Fabric – a DLT especially developed for enterprise use with advanced automation features.
Ricex selected the Fujitsu Blockchain Innovation Centre in Brussels as key integration partner to develop the solution because of its blockchain expertise, in particular with architectures built on Hyperledger Fabric, and because of Fujitsu’s flexible DevOps approach, covering both operational and development services using the scrum/agile methodology.
The Fujitsu BIC relies on Microsoft Azure to provide the platform for its agile development and to deliver the production environment for Fujitsu’s blockchain as a service offerings such as DocumentFlow and InvoiceFlow. As Fujitsu grows the Rice Trading platform, it intends to leverage Azure’s global scale as a secure and reliable foundation.
Rice trading is an opaque, complex and extremely process-intensive business, often still paper-based.
Certification requirements for rice imports vary by region and documents must be checked and matched manually, which is expensive and prone to costly human error. Documents must also travel globally with the goods, with the risk of loss of time due to faulty or lost documentation.
The Rice Exchange platform simplifies documentation compliance, leading to lower transaction costs and back-end operations, and providing full transparency.
Increasing volumes of rice are now traded internationally, up five-fold in 30 years. This is being driven by demographic growth and concerns over food security and water usage. But unlike other major grain crops, rice has a wide variety of types and finishes.
This makes pricing a lot less homogeneous, with trading managed by a relatively small group of individuals, with little transparency. The parties involved rarely have a full, transparent view of the rice market and market participants find it difficult to establish whether a buyer or seller has a clean track record for fulfilling contractual obligations.
Stakeholders in the rice supply chain have grown accustomed to these inefficiencies and have accepted their impact on price and margin as a “cost of business”. However, digital transformation based on distributed ledger technologies has created the means to rectify these costly and inefficient drawbacks.