Stephen Edkins is CEO of the DCX Group, a digital platform that’s bringing transparency and trust to the global trade in agricultural commodities. Jesse Sam spoke to him ahead of Pulses 22, where the company will introduce its new platform, DCX Pulses.
DCX Group is a strategic partner of Global Pulses Confederation and a key sponsorship partner for the upcoming Pulses 22 convention in Dubai on May 10-12.
Could you start by telling us about DCX Group — what the company does and its background?
DCX stands for Digital Commodity Exchange. We are digitizing physical trading for agriculture-related commodities.
Today there are futures commodities markets in Chicago and London. What is missing is a digital exchange for physical commodity trades, so that an exporter in Turkey or Canada can complete a transaction with a buyer in Pakistan or Nepal completely digitally. We want to bring the advantages of a digital exchange to physical commodity trades. That means reducing risks for buyers and sellers; improving liquidity; increasing transparency; and making it easier for people to trade with new partners.
And how long has the company been operating?
We were established just over three years ago and we launched our first platform for rice trading two years ago. In 2021, we launched fertilizer. And this year — in a few weeks — we are excited to launch a platform for trading pulses.
After rice and fertilizer, why was pulses the next frontier for DCX?
There are several criteria that we think about when choosing which sectors to go into. We are particularly interested in markets where we see the biggest opportunity for digitisation. Pulses is a surprisingly big market — many people underestimate its size. It’s really important for global food security. And what’s great for us is that it’s not dominated by a few big trading companies. The pulses market is very diverse; there are many medium and small-sized players. So we think it’s a great opportunity for everyone in this industry to benefit from the transparency, trust and reach that digitization brings.
Have you started on-boarding customers to DCX Pulses? And are you focusing on any particular region or products?
The platform will go live during the second quarter of 2022 but we’ve already started on-boarding customers — we have around 50 users signed-up.
We are a global company with team members who have in-depth knowledge of the markets we operate in. DCX Pulses will be a global platform, and that’s really important for us. A big part of what we are trying to do is enable the creation of new trading relationships — we believe we are the first blockchain-enabled international trading platform for pulses.
There are major markets like India that we will pay attention to. In terms of specific products, we will cover all the major pulses categories, including: lentils, chickpeas, black beans, and other peas. We are very positive about the future of pulses and the growth potential for new food products, particularly plant-based foods. I was in London last week and I ate in three different plant-based restaurants, which confirmed to me just how advanced this trend is.
And how similar is DCX Pulses to your other platforms, for rice and fertilizer?
We have a core functionality that doesn't change across each product, whether it’s rice or pulses. But then we adapt individual features to the particularities of that product. So that could be technical specifics like quality standards, inspection protocols, or certifications.
What’s really great about our platforms is that we can bring together all the parties involved in a transaction, not just the buyer and seller. We are able to facilitate inspections, certifications, licensing, and logistics. We work with a range of service providers, like Maersk, who also participate in the digital market.
You mentioned the role of blockchain on your platforms, can you tell us a bit more about that?
Sure, so blockchain is fundamentally about trust, and blockchain enhances the trust of our platform in a number of ways.
First, all the data that we have on our users is both private and verified. So if our users want to share their information with a counterparty — say, a new trading partner — then that person knows the information is secure and, more importantly, that it is tamper-proof and cannot have been changed.
Secondly, during the course of a negotiation, we record the steps of that negotiation on the blockchain in an immutable audit log. So if there is a dispute later on, nobody can say, “Well, I didn't say that.” The user can show exactly what happened during the negotiation as each action is stored on an audit log with a date stamp.
Third, we increase trust through smart contracting. So all trades are confirmed with automated contracts. That’s important because it reduces the risk of human error, which can happen easily when you’re creating emails, Word Docs and PDFs.
We also have blockchain-enabled historical data on trades. That can be really useful for our users, if they want to get trade finance and other related services. For example, to access finance, they need to show they have a reliable track record of successful trades. That can be difficult for physical commodity trading — there’s no independent credit agency that can vouch for individual traders. The security and reliability of our platform provides our users with a trusted transcript of all their activity, which they can use to access new opportunities and services.
Great, and last but not least, what are you most looking forward to at Pulses 22 this month?
The conference will be a great opportunity to introduce ourselves to the pulses community. We’re excited to build close relationships with new partners. DCX Pulses will be launching alongside our grains and oilseeds platforms in the next few months. We want to be a one-stop-shop solution for companies in the agriculture commodity space.
My colleagues Varun Dinodiya and Rodolpho Koch will be representing DCX in Dubai, and they are happy to meet with anyone that wants to learn more about the DCX Pulses platform.
That’s great to hear. Thanks for your time Stephen, and all the best for the launch.