Commodities Startup Is Betting on Old-School Trading Going Digital

The old-school world of commodities trading is looking at a digital future according to a team of industry veterans.

Phone-based trades and the use of paper documents for cargo ownership are commonplace when it comes to buying and selling materials crucial to building the world and feeding people. Vosbor Exchange, which includes previous heads of Bunge and Glencore, is trying to change that.

35 companies are testing the online trading platform of the Dutch firm. Initially, it will be used for actual trades for soy, corn, palm oil and wheat, generating pricing data for cash-settled futures.

Chris Mahoney, ex-Bunge chief Soren Schroder and Aryan Van Den Blink are on the board of Vosbor.

The platform helps lower costs and risks. It wasn't easy to pitch the idea.

I'm probably in the older segment of global traders. When I first heard about it, I thought, "Why would we need this?", but when I talked to Maarten, I realized I was the one stuck in the past.

There are already a number of digital platforms operating in the physical agriculture space, offering growers a way to sell their output directly and cut out middleman. There are online platforms for other commodities. Some people use technology to improve security.

According to Elferink, financial market participants could eventually be added to the platform. He said that the Covid-19 pandemic has accelerated a push to conduct more business digitally.

The generation that runs the desks now buy everything they need online, Elferink said.