In our first publication of 2020, The Commodities Issue, in addition to our usual coverage, we also shine a light on issues specific to this sector: from the shifts in direction and size of China’s commodity flows, to how better data management is key to unlocking benefits for Côte d’Ivoire’s cocoa farmers, and the way in which independent exploration and production companies are stirring up North Sea oil.

Our annual commodity finance roundtable, hosted in Geneva, drew together a group of global and regional experts to debate geopolitical risk (not always a bad thing in this business, we’re told); technological advancement (where there’s “a lot more talk than action”), and the industry’s growing appetite for sustainability financing solutions (driven almost entirely by clients’ needs).

The topic of one of GTR’s most-read online news stories for 2019, as measured by click-through rates and time spent on page, became a focal point of the roundtable discussion: komgo. The blockchain platform for commodity trade finance went live at the start of last year, and since mid-2019 can also facilitate standby letters of credit and receivables discounting, in addition to the original letter of credit product and KYC module. It is hoped that the platform, which digitises and streamlines trade and commodity finance, will change the way financiers transact with clients and other parties in the ecosystem, and significantly speed up the time it takes to process a deal. As one of our roundtable participants pointed out: “When you start to process fewer documents, and when you don’t lose three days of working capital in the transaction, you start to save very important amounts of money.” As a next step, banks are investing heavily into their own legacy systems to ensure that they are able to integrate with what komgo is building.

Sticking with blockchain, this issue’s fintech feature takes a closer look at the extractive industries, where hopes are high that the technology can help to address the issue of mineral provenance, and bring more comfort to trade financiers focused on traceability and compliance. Our fintech Q&A centres on the first blockchain-based platform tailored specifically for the rice industry, which launches this year, and aims to make it easier for financiers to process and analyse trade data.

As we embark on a new year, the GTR team looks forward to uncovering how these and other developments are changing the way commodity trade is financed. As was pointed out in the Geneva roundtable, given today’s low margin environment and increasing regulatory requirements, “if you don’t move big-time to technology at a very high level, you are out of the game. There needs to be a drastic change.”

We wish all of our readers a successful – and transformational – 2020!