Mobile Commodity Trading Software
By Dan Bolton
Europe is the heart of the global coffee trade and this year’s SCAE Nordic World of Coffee in Gothenburg, Sweden drew representatives from some of the most influential commodity houses.
The show floor included traders from List & Beisler and Neumann Kaffee Gruppe, in Germany; DRWakefield in London; BELCO in France, Sandalj Trading in Italy, and SNV Netherlands along with smaller traders like Nordic Approach, Norway.
Few people appreciate mobility more than traders who manage an incredibly complex task on the run. That’s why I was interested in their recommendation that I check out Agiboo, a Netherlands firm known for its software solutions in sugar (www.agiboo.com).
Bart Kroon, c.e.o. and co-founder Jan van den Brom, who manages sales, introduced their commodity trade and risk managment tools using unique touch screen interface they named Agriblocks.
The large screen was organized into 24 tasks that include currency exchange, transport, deliveries, futures and options.
A dashboard organizes choices. Touching a tile instantly displays top level insights. Continuing to touch pop-ups lets users drill down to a sales invoice, for example or bill of lading.
More impressive yet is the real-time display of inter-related tasks such as market risk based on commodity prices and currency exchange. A market-to-market analysis by the powerful relational database driving the system lets you stress-test simulations to guide hedging.
Hedging and hedge allocation in Agiblocks is supported on a portfolio level but also on a specific contract or even a number of bags or boxes.
Commodity trading, transaction and risk management software (CTRM) automates trading tasks. Initially designed for the largest commodity traders, gradually it has evolved to more flexible, off-the-shelf solutions useful in smaller trades.
Several companies offer solutions including Generation 10 which was at the show (www.generation10.net) and Eka Plus (www.ekaplus.com) and Tradepaq TPQ (www.tradepaq.com)Agiboo was founded in 2011 with the promise to eliminate coding and integrate numerous interrelated trading chores. “Margins are thin in coffee and CTRM allows traders to automate to a large extent the administration and execution of the trade,” explains van den Brom. “This reduces back office costs and enhances risk control,” he said.
In a complex trade book it is essential to be informed at all times about the trade position, he said. “Traders are always asking themselves, ‘am I long, or short in which month? Am I hedged? Did I price all the contracts?’ ”
The volatility of the market makes it critical to know what can be sold. “Agiblocks gives you quick insight into inventory and origins inbound and tracks coffee qualities so you can deliver the client the right coffee at the right moment,” he said.
“Trading requires a lot of flexibility in logistics including splitting and combining containers, truckloads and even pallets,” he said.
Agiblocks tracks physical characteristics of the coffee including grades, certifications, screen sizes, cupping scores displayed as spider graphs and data from multiple samples.
Descriptions of defects and flavor profile can be connected to contracts and inventory, allowing the trader to provide detailed information to the client about quality and taste which allows buyers to create an exceptional blend, said van den Brom.
Kroon joined van den Brom in 2014 after a 20 years career in commodity trading. “Before joining Agiboo I never experienced such a nice piece of software. It is intuitive, agile and flexible and easy to drill down with reports at all levels visible and full functionality on your mobile device,” he said.
Agiblocks blocks matured in 2014 which led the company to finalize its first implementations in sugar, cocoa and coffee, said Kroon who has exhibited at the National Coffee Association and COTECA 2014.
“There is an awful lot of coffee in the world and a wide variety of trading practices. Different geographical regions accept either bulk delivery or sacks, weights are in metric tons and pounds and bags,” said van den Brom.
“In a world of volatile coffee prices, hedging and risk management are important even on small volumes and contribute to an optimized margin,” he said. Agiblocks helps customers obtain that margin, said Kroon, “Anytime, anyplace with just a click.”