Blockchain Delivers Transparency to Striving Market for Texas Grain!
Bread and pasta are departing from shelves across the globe as shoppers stockpile amid fears that COVID-19 could limit the supply of the staples. While everything from labor shortages in North America to drought in Africa, and rationing in Asia, has been charged for the deficit, another factor, the inflating Mexican peso, could be contributing to a distinctive kind of grain dilemma, according to data from GrainChain, a newly launched blockchain startup.
As sinking oil prices rising from a trade war between Russia and Saudi Arabia, have caused the cost of the Mexican peso to develop 30% against the U.S. dollar, the purchasing power of Mexico’s ranchers and other producers that depend on grain to serve their animals has dropped, according to Luis Macias, 39, the founder and CEO of GrainChain, which traces millions of pounds of grain shipments a day.
As a consequence, while there seems to be plenty of grain in Texas, according to the data, buying has dropped dramatically. That joined with concerns that even if an order is made, truck drivers might not be ready—or permitted—to deliver it, led to a 76% decrease in volumes month over month.
While GrainChain doesn’t have clarity into each grain transaction, Macias expects about 30% of the grain that moves between Southern Texas and Mexico is traced from the 17 facilities on the border that utilize his software. Over the past year, more than 13 billion pounds of grain from 350,000 transactions have been tracked. Macias first commenced seeing something afoot in mid-February, when he says the oil trade war between Russia and Saudi Arabia began to impact Pemex, the oil firm held by the Mexican government.
As the price of the Mexican peso rose from $18.50 in mid-February, where it had been for approximately a year, to $24 today, purchases on GrainChain sank 20% in just about three days. By the end of February, the volume sank another 28%. “A lot of my customers are fearful, that if this continues the way that it is, and processing facilities for end products for food slow down if trucks can’t pick up because they can’t travel easily, or they get sick, or there are restrictions, the whole system breaks down.”
Access to this kind of data is likely because unlike a traditional supply chain, where every counterparty holds onto its record of transactions, GrainChain includes a single network of 46 nodes, each supporting the group agree on a shared history of transactions. The nodes, operated by GrainChain, financial associate Rio Bank, large farming cooperatives, and independent verifiers considering for a sum of more than 2,000 individuals, provide for approximately instant insight into supply chain data that might differently need months to audit. “It allows us to make sure that not only are we kept honest, but all of our participants,” states Macias.
Established in 2012 as a traditional agriculture software firm, the Texas-based GrainChain has raised more than $11 million from Overstock, com’s Medici Ventures, and others. It launched in 2018 utilizing technology similar to the bitcoin blockchain that anyone could use, named Hyperledger Fabric, however, with more privacy protections than bitcoin and only for invited members. Then, earlier this month the firm declared it had started to transition to New York-based Symbiont’s Assembly blockchain for settlement of its transactions, and would soon move over completely. Because every participant of the supply chain sees the same record of transactions, cheating is more easily recognized, allowing digital agreements among the buyers and sellers, called a smart contract, to be executed on the same day rather than as long as 90 days it recently takes. In addition to facilitating access to realtime data and payments, and determining where a glut of grain might offset a dearth, Macias states the company will soon declare a project that could let the actual participants of GrainChain monetize their data. “We’re going to be opening up some global marketplaces,” he says. “It’ll shake things up.”