DCX Rice: A rice shipping loading & discharging primer

Logistics for the global rice trade are complicated. Rice is transported in containers and in bulk and break-bulk vessels. To make it even more confusing it is possible to ship rice in bulk in a container and in bags in a bulk vessel.

A bulk vessel, also known as a conventional vessel, can be chartered on a voyage basis with a fixed freight rate to sail from point a to point b, or on a time charter which means that the vessel is at the disposal of the charterer during the agreed time period and a daily rate is charged independent of any circumstances such as rain, strikes or holidays. When a vessel cannot be filled it is possible, on some routes, to book freight on a parcel service basis meaning that many small rice cargoes owned by different people fill up a vessel. The party offering the parcel service assumes the risk of chartering a big ship and filling it up.

Shipping decisions are generally determined by pricing and vessel availability. Most ports accommodate bulk and container vessels. 

In addition to cost and vessel availability, shipping options are determined by the type of rice. Paddy rice is nearly always shipped in bulk vessels, whereas most parboiled rice is shipped in bags made from woven polypropylene or jute. The most common bag size is 50kg, but anything from 5kg to 100kg is possible.

Prior to the  Covid-19 pandemic, 70 pct of the global  rice trade was transported in containers. This has now changed as container rates have risen sharply making shipping  rice by container no longer economically viable.  Hence the rice trade is looking to ship rice in vessels. 

Shipping by vessel is very different from shipping in  containers. The owner of the rice needs to assess the solvency of the vessel owner, the condition of the vessel, the validity of vessel certificates and be confident that the marine insurance is top quality. Finally it is crucial that the  party booking the freight has reputable charterers liability insurance.   

Rice is transported to port by barge or by truck, in bulk or in bags depending on how it is to be shipped. Barges are common in South-East Asia, trucks in South America and South Asia. Bagged rice is loaded into containers and bulk vessels with slings and then paced by stevedores. In the case of a vessel this involves hundreds of thousands of bags and loading can take over a week.

CQD stands for customary quick despatch. When used in relation to loading it obliges the seller/shipper to load the vessel as soon as it is ready as fast as possible and according to the customary rate of the port. If the vessel is ready and the seller does not load the goods, then the seller is liable for detention. Detention can be applied either to all the holds allocated to the seller which are kept idle or to the whole vessel. In CQD, time lost waiting for a berth, due to rain or any other reason - other than reasons caused by or linked to the seller - is for the account of the vessel.

When used in relation to discharge CQD obliges the buyer/receiver to discharge the vessel as soon as it is docked, as fast as possible and according to the customary rate of the port.

Detention is a penalty rate invoiced to the party that keeps part or the whole of a vessel idle. It is used in combination with CQD (load or discharge) terms. The detention rate is in US$ per day for the whole vessel and can be invoiced pro rata to reflect the number of holds kept idle.

Demurrage is a US$ dollar penalty accrued daily on a whole vessel or pro-rata for exceeding the total time permitted for loading or discharging. Unlike CQD terms, time waiting for an available berth or waiting for free practice by phyto authorities is counted as lay time.

The opposite of demurrage is despatch. Despatch is accrued when loading or discharge is completed faster than required and therefore lay time has been saved. Despatch is usually half the demurrage rate. Whether demurrage is invoiced by the vessel to the party loading or discharging or whether despatch applies is determined by the lay time calculation (time used for loading or discharge vs time allowed minus time deducted for weather or other reasons).

On DCX Rice you can choose how you want your rice to be shipped. You can also check rates for container and parcel freight from our integrated shipping companies with a click of the mouse. You can specify bag size and any labelling that is required. Our mission is to make your experience of buying and selling rice easier, faster, safer and more cost efficient. Join our growing global rice market by registering here.

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Digitisation:  the silver lining of the supply chain disruption cloud 

The global trade of agri-food commodities is facing severe supply shocks and dislocations.  Force majeure events like the 2021 Suez canal blockage, COVID-19, the ensuing spike in container freight rates, adverse weather events and the war in Ukraine have complicated the business of putting food on the table. The disruptions have exposed structural weaknesses, triggered food inflation, reduced farmer income and are now jeopardising food security.  

Sarah Fowler, International Economy analyst at Oxford Analytica, comments: “The pandemic accelerated the trend towards digitisation with the shift to remote working. Investment in regional supply chains and self-sufficiency is underway but talk of globalisation being reversed is overdone. Cost is an important factor in supply chains and new infrastructure takes time to put in place and is expensive. Limited multilateral appetite for international initiatives creates space for private sector initiatives.”

Agri-food commodities are ripe for supply chain optimisation 

Agricultural commodity markets have been slow to embrace technology but the need to do so is now pressing.  Agri supply chains face many risks: performance, climate, geopolitical and finance. Performance risk is high given the perishable nature of the goods. Securing trade finance has always been a challenge. 

In today’s turbulent markets, the ability to switch to a reliable alternative supply chain is vital for producers, distributors and ultimately consumers. Supply chain participants need confidence that deals are solid with reliable counterparties, that risks can be assessed and managed, legal documents are stored on a consensual audit log and the history of the transaction immutably preserved. The time is ripe for the adoption of digital supply chains.  

Blockchain-enabled platforms overcome frictions 

The solution lies with blockchain technology. Supply chain solutions that deploy this technology overcome the frictions and burdens associated with the physical trade and delivery of commodities. Users benefit from improved market access, cost savings and price and supplier discovery. Fraud and human error are substantially reduced via smart contract solutions. Trades are traceable with each mouse click converted to a hash and stored on the audit log. 

Integrated service partners add value 

Inspection agencies, insurers and shippers are easily integrated with digital trading platforms enabling users to raise instant quotes and book services online. Service providers can offer competitive rates thanks to the availability of real-time data and the transparency afforded by blockchain-enabled marketplaces.      

Singapore-incorporated Digital Commodity Exchange (DCX) builds and operates digital marketplaces for the global trade of fertilizer, grains, pulses and rice.  Stephen Edkins, CEO of DCX, comments: “Blockchain technology is well suited to agri-food commodity trading. It provides the trust and transparency that allows fraud to be reduced and risk to be accurately assessed and managed. The tamper-proof audit log generated during a trade allows users to share their verified trading history with suppliers of trade finance and other services. This unlocks access to services that small and medium-sized market participants are currently excluded from and thus broadens the market and drives value creation.”

ESG targets underpinned by traceability  

In response to food safety concerns and consumer demand for sustainable produce, stakeholders are implementing back-to-the-farm schemes. Platforms that use blockchain technology generate trusted data that allows buyers to assess environment, social and governance (ESG) impacts and to make informed decisions. DCX Rice works with the Sustainable Rice Platform (SRP) to advance the market for sustainably-grown verified rice. 

Users enjoy cost and time savings and trusted connections 

Users are embracing the marketplaces and over 1 million tons of agricultural commodities have been traded since 2020. Róbert Jakab, MD of Emirates Foods, says: "Since we became users of DCX, our company has benefited from improved efficiency and faster processes. Uploading a trade request and agreeing terms with the seller is very easy. We can quickly and easily agree all contract terms. The biggest benefit is the establishment of long-term business partnerships based on trusted data. The platform is designed to safeguard against fraud and poor quality products."

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Locking in profit margins with freight bookings on DCX Fertilizer

Profit margins on fertilizer trading are slim so every cent counts. It’s crucial to account for all potential costs when assessing a trade: freight, shrinkage, insurance, inspection and finance. Freight represents the biggest cost in a fertilizer trade after the cost of product.

Making a mistake when budgeting freight costs can significantly impact profitability. Add potential claims for demurrage, shrinkage or quality and what might have been a small profit can turn into a large loss. The risk-reward equation needs careful management.

DCX Fertilizer offers users a freight quote portal system that gives direct real-time access to global brokerages with expertise ranging from coasters to panamaxes, containers to handymax, from China to India or Qatar to Brazil. Provisional freight quotes can be requested directly from the platform dashboard. 

It can be difficult to find brokers that provide competitive rates across several regions. Freight enquiries on DCX Fertilizer connect users with multiple brokers simultaneously for competitive freight quotes and advice. This saves time researching and qualifying shipbrokers and reduces the risk of losing a vessel booking.

DCX Fertilizer has ambitious plans for the future: real-time visibility of shipping choices in bulk or in containers relevant to your trade, with instant pricing of ocean freight and predictive tools to provide detailed demurrage estimates. Last but not least, tools for shipment execution to optimise final cost are also in the pipeline.

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DCX Group companies reach one million ton milestone

Singapore, 16 May 2022

More than one million tons of agricultural commodities have been traded on DCX platforms, since its launch in 2020. This is equivalent to fertilizer being applied to three million hectares of agricultural land, 300 million loaves of bread and 5.5 billion bowls of rice. 

DCX companies harness technology to improve the way that agricultural commodities are priced, traded and delivered. Agri-food markets are lagging in the race to adopt technology with implications for food security and the livelihoods of farmers. 

Singapore-incorporated DCX builds and manages trading platforms for fertilizer, grains, pulses and rice adding robustness and resilience to the value chain. The digital platforms use blockchain technology to bring security, transparency and efficiency to the trade and delivery of these commodities globally. All transactions are traceable with every action taken on the platforms stored on an immutable audit log. DCX platforms offer users improved market access and price discovery whilst fraud and risk are reduced via smart contract solutions. Quotes for inspection and freight services are raised and booked online via integrated service providers. 

The supply chain disruption caused by the combination of COVID-19, the Suez canal blockage, adverse weather events and now the conflict in Ukraine is making the business of putting food on the table that much more difficult. DCX group companies are seeing a spike in new customer registrations as importers look to establish new trusted connections in an environment where risk can easily be measured and mitigated.   

The platforms have users from over 80 countries who have embraced the new way of buying and selling agricultural commodities. Róbert Jakab, Managing Director of Emirates Foods,  says: "Since we became users of DCX platforms, our company has benefited from improved efficiency and faster processes. Uploading a trade request and agreeing terms with the seller is very easy. We can quickly and easily agree all contract terms. The biggest benefit is the establishment of long-term business partnerships based on trusted data. The platforms are designed to safeguard against fraud and poor quality products. Parties participating in the business are reliable given the strict onboarding procedure." 

Find out more about our resilient and agile supplychain solutions at: https://www.dcx.group/

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Wheat supply shock - DCX has the alternative

Russia’s invasion of Ukraine has created a global wheat supply shock. Commodity markets, already struggling with COVID-related supply chain issues, high freight rates and adverse weather, now face further shocks as grain shipments from Ukraine and Russia close, raising the prospect of global food shortages.

Ukraine and Russia rank among the world’s most important producers and net exporters of agricultural commodities and fertilisers. Together they account for 29% of global exports. The situation is critical for the Middle East and North Africa which depend on imported wheat. The world's largest wheat importers - Egypt, Turkey, Bangladesh, Indonesia and Iran - import around 60% of their requirements from Ukraine and Russia. Lebanon, Tunisia, Yemen, Libya and Pakistan source half their wheat from the Black Sea Region. 

When supply chains collapse, agility is crucial. Digital Commodity Exchange (DCX) marketplaces for fertilizer, grains, pulses and rice enable users to find new reliable suppliers quickly whilst mitigating risk. DCX marketplaces are carefully managed with all users vetted prior to onboarding. This curation creates secure marketplaces where users can establish new connections with trustworthy counterparties. While sanctions are closing markets, DCX is opening markets.  

Róbert Jakab, MD at Emirates Food, comments “since we joined DCX platforms our company has benefited from improved efficiency and faster processes. Uploading a trade request and agreeing terms with the sellers is very easy. We can quickly and easily agree all contract terms. The biggest benefit is the establishment of long-term business partnerships based on trusted data.” 

Buyers of wheat need to find new suppliers. Canada and the US have low stocks due to poor wheat harvests in 2021/22. Argentina has an export ban in place and Australia has reached its maximum shipping capacity. Europe and India are looking to fill the wheat supply gap.

India, which is the second-largest wheat producer in the world after China, increased exports to a record 8.5 million tons in the season ending March 2022. It is looking to open markets in Egypt, Turkey, China, Bosnia, Nigeria and Iran. 

Brazil, a net wheat importer, is increasing exports. Turkey, South Africa and Sudan are now buying Brazilian wheat - none of whom had bought from the South American nation in the last four years. 

In today’s turbulent commodity markets, the ability to switch to reliable alternative supply chains quickly is vital for producers, distributors and consumers. Supply chain actors need to have confidence that the deal is reliable with vetted counterparts, that legal documents are stored on a consensual audit log and that the history of the transaction immutably preserved on the blockchain. The DCX mission is to improve market access and boost efficiency, security and transparency in the form of price discovery. We work with some of the world’s top players in commodity finance, insurance, freight, inspection and logistics. Register at: https://www.dcx.group/

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Pulses: a nutritious, healthy and sustainable super food

Pulses are a top superfood. They tick every box: they benefit both you and the environment, they are economical and tasty and they have an 18 month shelf-life cementing their position as an essential part of the food security equation. Recently pulses have made a foray into a new market as an important meat substitute. 

There are thousands of varieties, all with unique tastes and preparation methods. Global pulse consumption hit 92 million tons in 2020 with annual growth of 3% over the previous decade. Over the same period the global pulse trade grew from 13 million to 17 million tons. The OECD-FAO expects consumption to increase to 114 million tons by 2030 with global trade forecast to exceed 20 million tons by 2030.

Pulses are the edible dry seeds of legumes including, but not limited to, lentils, chickpeas, cowpeas, dried beans like kidney beans, turtle beans, broad beans and butter beans. The edible seeds of the lupin plant also fall into the pulse category. 

Pulses are an affordable source of protein and essential minerals and are thus critical for food security. Pulses have a protein content of between 20% and 25% which is double that of wheat and triple that of rice. They contain high levels of fibre which is proven to reduce cholesterol thereby decreasing the risk of heart disease. Importantly the carbohydrates in pulses are absorbed slowly (as opposed to wheat) which helps in the control of diabetes and obesity. As a result, governments around the world are promoting the regular consumption of pulses.  

From an environmental perspective, legumes are seriously good news. Legumes can grow on dry land with minimal water and fertilizer as compared with other crops.  Legumes have a beneficial impact on the soil as they help fix nitrogen instead of depleting it and they feed soil microbes which benefits soil health. Legumes are often used in good soil management practices as part of rotational crop programmes.  The production and trade of pulses has the potential to grow exponentially, as it mitigates the impact of climate change thanks to reduced greenhouse gas emissions and increased carbon sequestration fulfilling Sustainable Development Goals. 

By-products from the pulses supply chain provide animal feed which indirectly contributes to food security. Reducing the amount of cereals and soybeans consumed by livestock has economic and environmental benefits.

Pulses are a mainstay of diets in India, many African nations, the Middle East, India, parts of SE Asia,  Latin American and the Caribbean. India leads per capita consumption at 13 kilos per year. In fact, India’s consumption outstrips its production. Hispanic communities have a longstanding  culinary relationship with pulses, introducing beans to tables across the United States. 

The production, consumption and the global trade of pulses is on an upward trajectory with the largest producers of pulses being India, Canada, Myanmar, China, Brazil and Australia. India’s lead in global imports is followed by Bangladesh and China. The top exporters are Myanmar, Australia and Canada. 

DCX Pulses is a digital marketplace for the global trade of more than 40 varieties of pulses. Users on the platform connect with vetted counterparties, agree contract terms and book services including inspection and shipping.

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ESG is our strategy 

People often ask what our ESG strategy is. The answer is simple. We don’t have a separate strategy. Our mission is to create accurate trusted data which allows DCX users to assess the ESG impact of their commodity purchase decisions. As our platforms become more widely adopted, ESG gains grow in tandem as users will have access to more data on the social and environmental impact of what they are buying and selling. Traceability allows users to make better choices.  

The best business ideas are the ones which allow our planet to survive and flourish.  DCX CEO Stephen Edkins has spent the last 15 years focused on three areas -  renewable energy, edtech and agtech, all sectors that focus on improving the lives of everyone on Earth. 

Most activities on this planet involve trade-offs. There isn’t a clearer example of this in the agricultural commodities space than fertilizer. In the hierarchy of preferences, food security is paramount. The agricultural revolution has in large part been driven by greater fertilizer use – nearly half of all agricultural yields today can be attributed to it. Yet the fertilizer industry causes significant environmental damage during raw material extraction, manufacturing, transport and post application (both through emissions and water pollution). 

How does DCX help? The inspection companies that we work with can provide accurate and reliable data on the origin of all fertilizer traded on our platform and how it is manufactured. This data allows users to assess the environmental impact of the fertilizer they buy. We are developing an environmental impact calculator to make these choices explicit. Having clear, accurate data is key to incentivizing behavioural change.  

Rice has a big environmental footprint, higher than is commonly thought. After the rice harvest, if the rice straw is left in the field and the field is subsequently flooded, anaerobic digestion occurs producing significant amounts of methane. In terms of its contribution to global methane emissions, rice is second only to cattle farming – over 700 million tons of CO2 equivalent annually, more than 1% of global  emissions from this one seemingly innocuous source. Furthermore, a lot of nitrogen is removed from the soil in the process.

The good news is that this is relatively easy to solve. By clearing rice straw and avoiding flooding the fields at the wrong time, it is possible to reduce methane emissions by over 90%. Education plus financial incentives are required to make the change. DCX is working with the Sustainable Rice Platform to show farmers the benefits of producing rice that conforms to its low methane standards. The market is ready. DCX Rice has unsatisfied demand for several thousand tons of SRP-Verified rice with the amount increasing every month. 

Adoption will be quick if the right financial/risk incentives are in place, the knowledge is shared, and there is a clear path to market. We are exploring ways to make this happen with VC climatech venture builder, Wavemaker Impact. Given the urgent need to reduce emissions, we hope enabling the market’s move to ESG compliant commodities will act as a bright example of what is possible with the right business innovations.

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Frank Gouverne talks about the new way of buying rice

Buyers of rice face many problems. They don’t know if they are getting the best price, they worry that they can’t trust new suppliers and they face numerous financial and non-financial risks, especially during the transportation part of the trade. DCX Rice (formerly Rice Exchange) was designed specifically to make the rice buying process better. Here we talk with Frank Gouverne, General Manager of DCX Rice to understand how the digital platform makes life easier for rice buyers around the world.

Q: One of the most important considerations for rice buyers is price. Buyers presumably want to pay the best price for the rice they buy. How does DCX Rice allow them to do this?

A: Through our platform buyers of rice benefit from extensive price discovery. Currently, all prices are negotiated bilaterally between seller and buyers and this is not representative of the whole market. On DCX Rice buyers can see prices from other sellers and from many origins, in one place and in real time. When buyers see a good offer from one or more sources, they can negotiate the price and conditions with a few clicks. Buyers can also post enquiries and obtain the best offers from the main exporting countries. This is a huge advantage.

Q: How do buyers know if they can trust new suppliers, who might be offering more competitive prices, if they have not done business with them before?

A: Firstly, we provide direct connectivity between buyers and sellers so they can build their relationship quickly and securely over our platform. Once both parties have established themselves on the platform, it will be easy for them to see each other’s trading history, if both parties agree to share this information, that should give extra reassurance. In the future we will implement a rating system for both buyers and sellers that will add a further layer of trust.

Q: How does DCX Rice help buyers with their own operations?

A: A typical rice trade generates a multitude of documents. All trades on DCX Rice are digital. This means that the risk of documents being tampered with, manipulated or lost is drastically reduced. This saves buyers time spent in their own back offices. The electronic documents that our platform produces give the buyers’ banks visibility and trust, enabling these institutions to release more finance.

Q: Once terms have been agreed and the paperwork is in place, buyers often face an anxious wait during the execution of the trade. How does DCX Rice lower the anxiety levels and give buyers a better view of what happens to their rice cargo?

A: We have several ways of doing this. The platform gives users daily cargo operations reports as opposed to the existing system of waiting for the inspection reports that arrive when the shipment is seaborne. This daily reporting gives real time visibility on cargo operation activities and allows buyers to react should something be wrong. All parties to the trade have the same information: the buyer, the seller and the inspection company.

The inspection companies that work with DCX Rice have agreed to provide buyers with daily reports although their services are paid for by sellers.

Unfortunately, it is common for buyers to be kept in the dark regarding the shipment of their rice cargo. DCX Rice not only brings transparency to shipment preparation but on many other aspects of the trade with the objective of creating an ecosystem of parties who aren’t afraid of transparency and want to work in a trusted environment with reliable partners.

Improved transparency helps buyers access the dedicated DCX Rice insurance policy, provided by first class European underwriters via our integrated insurance brokers Siaci Saint Honoré.

Q: What about shipping? How does DCX Rice help buyers that are buying small to middle sized lots?

A: The platform offers two possible shipping methods - containers and break-bulk shipment on a parcel service - both of which can be booked on the platform with our integrated shipping providers. Container services are well known and offer multiple advantages. Buyers that book their freight via the platform receive updates detailing when their cargo is picked up, when the rice is loaded on the vessel and when it reaches the destination. Buyers who purchase bigger lots may want to ship the cargo by vessel, but the volume may not be large enough to fill a big vessel or the buyer may lack the expertise to do so. To help those buyers, we have teamed up with Ducat Maritime, a leading parcel shipping service that focuses on the important rice route between Asia and West Africa. Ducat is one of the few shipping companies to offer a parcel service for small or medium-sized bagged loads between 1,000 and 3,000 tonnes. It does this by bundling smaller cargoes, which can be collected from and delivered to multiple locations. This service democratises the global rice market as it allows smaller buyers to benefit from the same level of service as the largest buyers in the market.

Q: How does DCX Rice help buyers reduce the risk of financial loss for damages caused during transportation?

A: The risk of damage during transportation and the financial exposure related to that can have a serious impact on buyers’ cash flow. Many buyers do not have insurance in place or cannot access good cover as their volumes are too small. As a result buyers often purchase rice on a CIF (cost, insurance and freight) basis but they have no idea of the policy terms nor do they have a guarantee that an eventual claim will be paid. DCX Rice has partnered with Siaci Saint Honoré to provide platform users with a dedicated marine insurance policy from a Swiss underwriter. Initially the insurance cover is only available for container shipments but we hope to extend this to conventional shipments too. The insurance cover is linked to the implementation of loss prevention measures including the use of Kraft paper and dry bags for container shipments. These measures are expected to reduce insurance claims considerably benefiting buyers who will enjoy competitive premiums.

DCX Rice enables buyers to access to the best offers from Asia and South America from the comfort of their home or office. We help buyers to build new supplier relationships, achieve price transparency and benefit from improved services and logistics. Register to use the platform here.

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The role of inspection companies in the global rice trade

Buyers of rice in Africa, the Caribbean, Europe and the Middle East rarely see the rice they purchase from suppliers in Asia or the Americas before it arrives at its destination. Sometimes sellers send a pre-shipment sample by courier to the buyer which serves as a first indication of the quality of the rice. However buyers want to be sure that the rice shipped will reflect the sample and corresponds to the contractual specification. This is where inspection companies come in: they provide trustworthy information to both buyer and seller. Appointing an inspector mitigates the risk of fraud and theft which is common in the global rice trade. The most common problems are shortfalls in the volume, wet damage and the adulteration of rice with cheaper substitutes.

DCX Rice (formerly Rice Exchange) is a private permissioned blockchain solution for the trade and commercialization of rice. It is transforming the highly fragmented international rice trade into a modern global marketplace by introducing trust and efficiency via the provision of verified, immutable data for all stakeholders. On the platform buyers, sellers and service providers connect, conduct trades and arrange insurance, shipping, inspection and settlement in a secure and cost-efficient environment.

DCX Rice works with the leading inspection companies including Intertek, ISC, Control Union and Cotecna. Traditionally sellers appoint and pay for the services of an inspection company though the service is also available to buyers. On offer are pre-shipment inspections of rice cargoes, fumigation, starch tests and supervision of the loading and discharge of the grain. Rice cargoes need to be inspected for quality, weight, moisture and moisture levels. If the rice is bagged the weight of the bag and strength of the stitching require testing.

In addition to these checks other tests may be required to ensure that rice complies with the standards of the destination market. Basmati rice imported into the European Union may not contain more than 0.01 mg per kg of tricyclazole (a fungicide). Good inspection companies are familiar with these standards and interpret them in a uniform and consistent manner.

Frank Gouverne, General Manager of DCX Rice, stresses the importance of using a reputable company to ensure that best practice is followed when packing and loading rice cargoes as the inspector is the "eyes and ears on the ground". Increasingly maritime insurance companies are insisting on additional measures to avoid shortages or damage to the rice during the transit period from origin to destination. An inspection company can certify that those damage prevention measures have been applied. This gives both parties and the insurance underwriters the knowledge that the rice was stored and transported using best practice to the benefit of both the policyholder and the insurance company.

Each time the inspection company performs an action related to the rice cargo a report is uploaded to DCX Rice providing reassurance to all parties involved in the trade. Buyers and sellers can view all the documents related to the trade on the platform including certificates of quality and weight. This visibility allows buyers peace of mind and the ability to react if something goes wrong.

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DCX Rice tender functionality

DCX Rice (formerly Rice Exchange) allows buyers of large volumes of rice - typically above 20,000 tonnes - to purchase via tender. The tender feature allows purchasing consortia, big industrials and institutional buyers to procure their rice requirements using single or global origin tenders. The tendering party can choose to advertise its tender to all users on the digital platform or to send it to a pre-approved list of counterparties. DCX Rice also caters for tenders run as Dutch auctions in which the price decreases incrementally from the starting price at regular intervals.

Tenders account for an estimated 20% of the 43 million metric tonnes of rice transacted every year on the global market. Agribusiness, food retailers, state grain buyers and aid agencies rely on tenders to procure large volumes of rice from across the globe. Tenders are useful to secure rice supplies quickly in times of famine or natural disaster. Several Asian and Middle Eastern countries, which depend on rice for food security, buy most of their rice requirements by way of tender and provisions for such purchases are often made in the national budget.

However, the tender process is cumbersome, document-heavy and costly. Notice of a tender is published in a trade gazette and interested parties must file the required documents and post a performance bond within the stipulated time frame. Conversely a tender held on Rice Exchange can be arranged quickly and attract a wide range of suppliers with the added advantages of quality control, price discovery and an immutable audit trail.

DCX COO and co-founder, Frank Gouverne, explains the benefits of the tender function: “It offers large buyers speed, agility and cost efficiencies. The open nature of the tender mechanism means that buyers achieve price discovery adding confidence to the tender process. Once the tender is completed buyers enjoy full visibility on cargo preparation via the daily inspection reports from the first class independent inspection companies that are integrated on the platform.

Industriales del Arroz de Costa Rica (Indarroz), which accounts for 70% of Costa Rica’s rice industry, has used the DCX Rice tender feature. Antonio Martinez Fonseca, Executive Director of Indarroz, points out the benefits of a digital tender for his organisation: “Our rice industry has an excellent opportunity to improve the way to do business with DCX Rice which marks a break with the traditional manner of doing business. In my opinion the platform will facilitate the digital management of our purchases in one place, all done in a virtual environment and I must add that the dashboard alerts are great.”

DCX Rice was designed and built to enable rice buyers and sellers and third parties to trade rice in an efficient, cost effective and secure way. The blockchain-enabled platform allows participants to interact and settle trades through a permissioned, smart contract solution that integrates buyers, sellers and service providers. It increases trust, reduces risk and delivers cost savings to the rice industry, benefiting all actors involved in the trade of this important foodstuff.

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DCX Rice Moisture Prevention Programme

Moisture is the big enemy of the international rice trade. Even when shippers take the utmost care during the processing of the product, rice cargos often reach their destination with wet damage. When this happens, losses can be significant as salvage values for mouldy rice are low.

Wet damage occurs when drops of condensation fall from the ceiling of the container during the sea crossing from warm, humid zones to colder climes.

According to UKP&I, a leading mutual for shipowners and charterers, wet damage accounts for over one third of cargo claims and nearly half of the associated costs. Insurers do not always settle claims as some policies exclude wet damage on the basis that it is not a fortuitous loss and can be controlled when precautions are taken.

There are simple and cost-effective ways of protecting rice cargos from moisture. At DCX Rice (formerly Rice Exchange) we have carried out extensive trials on container shipments from Asia to West Africa. The excellent results of the trials led us to develop a Moisture Prevention Programme for rice transported in containers with our dedicated insurance broker Siaci Saint Honore.

The programme involves lining the sides of the container with Kraft paper and adding Dry Bags filled with calcium chloride that can absorb up to four times their own weight. Once the Dry Bags have absorbed the moisture in the air they hold it unlike some traditional moisture-absorbing materials that have limited absorption capacity resulting in moisture being re-injected into the container once the bags are saturated. The bags recommended by Rice Exchange are biodegradable and do not harm the environment.

Any buyer that adheres to the DCX Rice Moisture Prevention Programme is eligible to apply for dedicated DCX Rice insurance cover from the best European insurance underwriters. Securing good insurance cover is difficult for many buyers today as underwriters are reluctant to provide cover on routes where wet damage is a significant source of claims.

Intertek and ISC, which are integrated on DCX Rice, are accredited by insurance underwriters Baloise to certify that Moisture Prevention measures have been applied during stuffing of the rice in containers. This gives both parties peace of mind and reduces claims benefiting both the policyholder and the insurance company.

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Transacting sustainable rice on DCX Rice

DCX Rice increases trust, reduces risk and delivers cost savings to the rice industry. Sustainability is at the heart of our ethos. Rice is integral to food security as half the world’s population depends on rice as a primary source of calories and the grain is the largest import item in the food baskets of many nations. Unfortunately supply chain inefficiencies are mostly paid for by consumers.

DCX Rice along with its partners in the shipping, insurance and inspection sectors removes frictions thereby benefitting the whole supply chain and the end consumer. Smart-contract solutions eliminate paperwork and expensive courier services. The transparency provided by the platform’s immutable blockchain audit log allows buyers and sellers to build relationships of trust. Buyers no longer need to fly across the world to meet suppliers in person as they enjoy full visibility on cargo preparation via daily inspection reports from the independent inspection companies integrated with the platform: Control Union, Cotecna, ISC and Intertek.

Environmental sustainability is key to the rice industry. Within the agricultural sector, rice cultivation is the second largest contributor of greenhouse gas emissions after cattle farming. Rice farming produces 10% of all global man-made methane emissions. Methane, which according to the Intergovernmental Panel on Climate Change is 25 times more potent than carbon dioxide in its global warming potential, is emitted from flooded rice fields as organic matter decays. Burning of rice straw also results in harmful emissions.

We work with the Sustainable Rice Platform (SRP) to advance adoption of sustainable practices by rice smallholders. SRP, convened in 2011 by the UN Environment Programme and the International Rice Research Institute, together with public and private sector partners and civil society groups, has created the world’s first voluntary standard for sustainably produced rice. According to Wyn Ellis, Executive Director of SRP, rice farmers following the SRP Standard can reduce emissions by between 25% and 50% and reduce their water consumption by up to 25%. Adopting the SRP Standard can boost smallholder income by between 10% and 20% through higher yields and savings in input costs.

Buyers on the DCX Rice can connect with SRP suppliers who have been verified by an approved verification body, including Control Union, Preferred by Nature and Agrocolor. Stephan Moreels, General Manager at Control Union Cambodia, explains that after every onsite visit a Verification Statement is issued, and results are recorded with Global G.A.P and SRP. Similarly, upon request from the buyer, and with the consent of the supplier, this Verification Statement can be uploaded on the DCX Rice platform once the contract is agreed.

This gives the buyer certainty that the contracted rice is SRP-Verified. In turn it allows sustainable rice producers to charge a premium for rice. Studies show that consumers are willing to pay premiums between 9% and 33% for sustainably-produced rice. As over one billion people depend on rice farming the impact of higher prices has the potential to lift the incomes of many families.

Inefficient processing, transportation and storage of rice can greatly increase loss and spoilage. Rice makes up over half of wasted cereals in Japan, China and South Korea, and 72% of lost or discarded cereals in South and Southeast Asia - a total of 149.7 million tonnes, according to the UN. That wasted rice emits greenhouse gas emissions equivalent to 610.5 million tonnes of carbon dioxide a year.

DCX Rice has developed a moisture prevention programme to minimise wet damage to rice during seaborne transportation. The programme, which consists of lining containers with Kraft paper and adding dry bags, dramatically reduces wet damage during transportation. Actors on DCX Rice can access insurance cover from the best European insurance underwriters if they implement the moisture prevention programme which is overseen by integrated inspection companies.

DCX Rice has a tender function which makes it easier and quicker to manage rice procurement and increase purchases in times of poor harvest or natural disasters.

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Is this the end of globalisation?

Since we began building the DCX agricultural commodity platform in September 2019, a series of events have transformed the world around us, especially for international commodity trading:

1. Jan 2020 – Covid-19 outbreak in Wuhan, China. Start of the COVID-19 global pandemic.

2. Mar 2020 – Almost total shutdown of global aviation. Passenger flights halted.

3. Apr 2020 – Large scale port disruption as a result of COVID-19 restrictions.

4. June 2021 – Container freight prices begin rising, accelerating in Q4 with bulk rising too.

5. Mar 2021 – Ever Given blocks the Suez Canal, highlighting logistical bottlenecks and putting pressure on global ‘just-in-time’ supply chains.

6. Sept 2021 – Spike in European gas prices 

7. Feb 2022 – Russia invades Ukraine. Black Sea grain, oilseeds and pulses trade severely disrupted. Heavy commercial and banking sanctions imposed on Russia.

It is easy to characterize this as “globalization in reverse”. Some aspects of “pre-COVID” life may have changed forever, such as home-working. International passenger airline traffic is still significantly below 2019 levels, although this seems to be attributed to reduced business travel rather than a reduction in tourism.

In terms of international trade, the march of globalisation continues almost unabated. Global imports and exports reached record highs in2021. This in turn explains why freight prices hit record levels and why supply dislocations have caused disruption at many ports. 

The value of global trade reached a record level of $28.5 trillion in 2021. That’s an increase of 25% from 2020 and 13% compared with 2019, before the COVID-19 pandemic struck.

In the commodity space, international movements are also at record high. For instance:

The final 2021 trade data published by the US Department of Commerce showed that exports of farm and food products totalled $177 billion, topping 2020 total by18%, eclipsing the previous record set in 2014, by 14.6%.

We see competing forces at play.

1. Dwindling reserves of commodities markets ENCOURAGE international trade. As world supplies of oil, lithium, phosphates and water dwindle, we will have to go FURTHER to get what we want. 

2. Higher freight prices increase the incentive to source closer to home. We expect trade to become more regional as a result. 

3. World financial conditions, price volatility and sanctions mean that trading and counterparty risks are greater than they have ever been. 

4. Buyers need to increase their flexibility to source from new origins and from new suppliers in order to get the best deals. 

5. Banks are getting out of trade finance and supply chain disruptions mean that working capital needs have exploded

6. New financing and payment solutions are emerging at an accelerating pace.

How can DCX respond and help its customers? 

Better data about counterparties and trades  

Technology can provide accurate and plentiful data. The benefit of this is greater transparency and better-informed decision making. For individual transactions that transparency should be for those involved in the trade itself. But pre-deal we help with both customer and price discovery, giving buyers the ability to be able to easily compare all-in pricing from suppliers in real time across different geographies, giving them accurate data about their financial standing and origin of goods/funds. 

Integrated services 

We are still only in the second innings of digital integration in the agricultural commodities trade. We have comparatively few API (application programme interface) connections at present, but that will change dramatically over the course of the next five years. Having trusted structured data will allow service providers – finance, insurance, surveyors and freight to better assess risk and offer better pricing to those that deserve it. 


The increase in container prices caused many users to look for alternative freight options. Filling a whole vessel is often the best outcome and often it would be optimal to share with other players. Coordinating this requires higher than normal levels of data sharing and trust. 

Alternative finance and payment options

Banks have been steadily getting out of both trade finance and payments as traditional relationship banking declines. Those that remain want to find ways to better control risk with risk mitigating products. In the vacuum a whole new ecosystem is emerging, ranging from the existing model to new open finance and insurance platforms. DCX is open to working with all of the above. Whilst customers have different needs everyone wants quick and transparent decision-making.

Regional marketplaces

DCX is creating regional instances of our core platforms that allow users to quickly tap into proximate suppliers with dramatically reduced freight costs when previously they would have used intercontinental routes. 




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Blockchain for integrated ecosystems

International commodity trading involves complex supply chains with multiple inefficiencies reflecting archaic processes, low trust, poor financial and market infrastructure and a lack of coordination and cooperation among supply chain actors.

Digital Commodity Exchange (DCX) was founded with a vision to digitize the global agricultural commodities trading industry by creating a secure and trusted ecosystem, powered by blockchain. The intention is to offer to the traditional industry a means to trade digitally by simplifying existing workflows, providing an interface with a broad ecosystem of industry participants along the value chain and digitally replicating the physical world as best as possible.

Any party involved in the process of physical commodity trading stands to benefit from processes which are quicker, more accurate and safer. This is a substantial challenge as every trade involves different counterparties, as well as logistics providers. However, the rise of new technologies like blockchain, artificial intelligence (AI) and predictive analytics allows many hurdles to be overcome.

In addition to providing a secure environment for buyers and sellers to connect and agree trades, DCX marketplaces offer users a range of services from providers that can interact over the platform. For example a booking platform can connect with an insurance provider, a finance platform, an inspection agency or a freight platform and share common, validated data.

Freight and ancillary shipping costs form a significant component of the total cost of the commodity in a typical physical CFR trade. Complicated, multi-modal supply chains move goods from the producer to consumer via rail, sea and truck and often need to seek out several counterparties to check on availability, size, price, standard of service and other related services. That is the only way to get the “best deal” at present.

DCX is looking at various integrated freight/shipping models to offer its users that would offer ease of chartering vessels, market level pricing, convenience, market freight trends, visualization of existing vessels floating with agriculture commodities globally, heat map of demand and supply, historical analytics. Potential solutions include: (a) integration with incumbent market leading physical freight brokers (b) emerging online global freight booking platforms (c) partnerships with leading shipowners and shipping lines to enable direct vessel bookings on the platform. DCX Fertilizer and DCX Rice allow for direct booking of both vessels and containers.

The advent of disruptive technologies, innovations in the world of commodities trading and the breakdown in supply chains resulting from COVID-19, has resulted in a plethora of value-added solutions and offerings in the shipping space. DCX is looking to capture maximum efficiency gains for the benefit of the trade fraternity. With a forward-looking mindset and customer-oriented approach, DCX is open to exploring partnerships that will benefit its users and the agriculture commodities trade world at large.

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How DCX harnesses the power of DLT to remove frictions

Graeme Kelly, CTO at Digital Commodity Exchange (DCX), explains how DCX commodity platforms harness the power of distributed ledger technology (DLT) to remove the frictions that complicate the field-to-fork supply chain.

Traceability - all communications, contracts, amendments and inspection certificates are open to the respective parties along the supply chain and stored in the form of audit trails, removing the need for the use of multiple communication platforms to maintain a single source of truth.

Trust - standards and controls are inherently built into the processes. Documentation, correspondence, contracts, inspection certificates, finance documents, shipping requests and proof of payment are stored in a single source of truth ledger and each is marked with a unique hash. The ledger is immutable, idempotent and allows easy validation in order to demonstrate provenance and originality.

Speed and efficiency - digitalising workflows and processes. DCX offers users and service providers efficiency. DCX platforms remove the traditional pain points around documentation and eliminate the errors from manual inputs that result in trade delays. Users receive the goods and payment quicker and can access third party services without the need to re-present documents as these are stored on the ledger and available to authorized parties.

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Digital Commodity Exchange on a progressive web app

The second generation, mobile-friendly DCX platform application is a progressive web app (PWA). This type of app has become common in recent years. It combines the benefits of both mobile and web applications and allows DCX to offer users an app that works on iOS, Android, Windows, Mac on phones, tablets, laptops and desktops. The DCX app is designed to be responsive with data changes reflected across devices with the "standard" DCX functionality of trading, inspection, shipping, finance and insurance all of which allow customers to trade on the move with traceability and trust in the new digital economy.

This approach not only helps our customers, it helps DCX. Our agile product team can create features with speed and confidence reacting to the feedback we receive from users. We believe time should be spent delivering value to the user and not spent on manual tasks that can be automated. Thus, we have invested in DevOps pipelines, test automation, and automated ops processes in order to ensure we deliver value to users in a timely and deterministic manner. 

Gone are the days of being tied to your desk or using multiple channels to buy or sell an agricultural commodity. The DCX App allows you to trade with traceability and trust on an app that is built with a customer centric approach. Register on the DCX app and start to reduce your trading costs.

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