Today Fujitsu announced an investment in the Singapore-based Digital Commodity Exchange (DCX). In 2019 the Japanese technology company started working with startup rice exchange RiceX, a DCX subsidiary, to use blockchain for rice traceability. The partnership has since expanded along with DCX unveiling its fertilizer exchange FertX, with more commodities in the pipeline.
“DCX’s power to innovate commodity trading combined with Fujitsu’s advanced technologies such as blockchain will allow us to accelerate our digital transformation business for our customers, industry, and society,” said Ichiro Aoyagi, SVP, Head of DX Platform Business Unit, Fujitsu.
Ricex went into production in late 2020. After announcing its first three transactions in November, the company said it planned to have up to 20% of global rice buyers and sellers on its platform by the end of 2020.
It’s estimated that 500 million tons of rice were produced globally in 2019/2020 and with the price hovering around $500/ton makes it a $250 billion market. However, the vast majority of rice is consumed in the country of production, which means the international market that Ricex targets and estimates at $20 billion is a far smaller one.
Following up on rice, DCX is now signing up participants for fertilizer exchange, FertX, where Fujitsu is also a partner.
The blockchain platform aims to streamline the trading process by providing insurance, shipping information, inspections and automated settlement to participants. More recently, both RiceX and FertX signed a deal with an unspecified trade finance partner.
According to the Japanese firm, the next steps are to target grains and other agricultural products as well as raw materials for manufactured goods.
While Fujitsu did not specify the investment amount, its Fujitsu Ventures unit has a total fund of Yen 10 billion ($91 million) with this as its first investment.
Numerous companies around the globe are using blockchain in the commodities sector. The largest agribusinesses in the world have formed Covantis to digitize agribusiness trading. DigitalSugar was recently launched by Al Khaleej Sugar in Dubai. Several firms are targeting traceability and trade finance, including dltledgers and Triterras in Singapore and two trade finance platforms backed by big banks, komgo and Contour.
One of the earliest to deploy blockchain was oil post-trade platform VAKT. More recently, the metals sector is showing a lot of interest focused on sustainability.