Yesterday it was announced that Al Khaleej Sugar is planning a blockchain sugar trading platform. The company is responsible for about 3% of the world’s refined sugar output and will use the Universa blockchain. Additionally, it has signed an agreement with the Dubai free trade zone’s DMCC Tradeflow platform.
The blockchain platform will enable traders to buy, store and trade sugar from Al Khaleej using smart contracts. This will be integrated with the existing DMCC Tradeflow platform, which acts as a central commodity registry in the UAE. As a result of standardized contracts and DMCC certified and rated warehousing, the DMCC issues electronic documents of title, which it calls warrants.
“As the largest standalone sugar refinery in the world, with capacity to hold more than 1.6 million tons of sugar, we are delighted to be able to set up a sugar platform on such a robust and established platform as DMCC Tradeflow,” said Jamal Al Ghurair, Managing Director, Al Khaleej Sugar.
By centralizing the title transfer process, DMCC Tradeflow provides peace of mind to bankers to whom the commodities might be pledged as collateral. The warrants become negotiable instruments.
Al Khaleej Sugar also hosts the Dubai Sugar Conference, which is currently taking place. At last year’s event, the idea of an international sugar blockchain initiative was floated. Since then, the world’s largest agribusiness traders have officially formed Covantis to digitize trading using blockchain.
The blockchain platform Universa has a certain amount of notoriety. Last year it made a presentation at a conference hosted by the Central Bank of Tunisia. Russian news agency Tass reported that Universa would be working on a central bank digital currency (CBDC) and was to launch a test e-Dinar. In fact, it was a uDinar backed by local currency deposits and not associated with the central bank, other than appearing at the conference.
While there was a misinterpretation, for days the company failed to correct the misreporting despite contact from the press. And it retweeted articles about the CBDC. Eventually, it clarified the situation. During that period last November, the cryptocurrency associated with the blockchain fluctuated significantly.