DMCC Signs Agreement with Al Khaleej Sugar And Universa for Blockchain Platform
Dubai Multi Commodities Centre (DMCC) has inked an agreement with Al Khaleej Sugar and blockchain company Universa, which will examine its Tradeflow platform utilized as the basis for a new sugar trading platform in Dubai.
The solution will allow traders to store, purchase, and trade the sugar from Al Khaleej Sugar’s refinery via smart contracts on a blockchain framework produced by Universa.
“The DMCC Tradeflow platform will act as the central registry of ownership of the sugar through enforceable warrants to prove the existence of reserves,” a statement from DMCC says.
“As the largest standalone sugar refinery in the world, with the capacity to hold more than 1.6 million tonnes of sugar, we are delighted to be able to set up a sugar platform on such a robust and established platform as DMCC Tradeflow,” adds Jamal Al Ghurair, managing director at Al Khaleej Sugar.
The DMCC Tradeflow platform, launched in 2012, enables physical inventories that are collected in certified warehouses throughout the UAE to be transformed into electronic negotiable instruments, identified as Tradeflow warrants.
The titles of these digital warrants can be shifted to financiers as collateral in exchange for working capital. By giving collateral-based trade finance products, the commodities receipt platform intends to make trade finance more available to those in want of it.
Having already implemented the platform to other commodities like gold, diamonds, and tea, said Sanjeev Dutta, executive director at DMCC, “sugar was the next natural move” as the Dubai-based refinery provides about 3% of global yearly refined sugar production, exporting to more than 50 countries.
Dutta replied that DMCC’s experiences had allowed the team “to be very careful in defining the Chinese walls” when it comes to assuring data security and user confidentiality, adding that DMCC will also “evaluate new commodities. I don’t have any names, but we will continue to do that.”
Stronger bonds for China and Dubai
According to Dutta, DMCC is also seeing to strengthen its ties with China in light of the growing cooperation between the UAE and the Asian giant and the opportunities posed by the Belt and Road Initiative (BRI).
“If you typically look at the importance of Dubai today, DMCC is dwelling to over 539 Chinese companies, and in the UAE, there are 4,000 Chinese companies. Over the next three years and given the two-sided trade projections that are going to be doubled – so there’s a clear opportunity. I’m unable to elaborate further, but we’re working on several robust strategies for the Chinese market,” he said.
DMCC signed an agreement with the Chengdu Hi-Tech Industrial Development Zone, one of China’s high-tech parks, furthering its alliance with the country.
“Everything [between China and Mena] is increasing at double-digit rates: trade, tourist arrivals, foreign direct investment, projects, and joint ventures,” stated Florence Eid-Oakden, chief economist at Arabia Monitor, a research and strategy firm.
“This is mutually beneficial for China and the Arab world, as it is the confluence of the BRI and the economic diversification underway in Mena. It has all come at the right time because if either side were doing this a couple of years earlier, the momentum would not be what it is now.”
Meantime, earlier this week, Dubai Investment Development Agency (Dubai FDI), a government agency, declared the launch of new services on its official WeChat account to help Chinese investors pursuing financing opportunities in Dubai.
“This program was launched to facilitate communication with Chinese companies, and we are getting encouraging feedback from Chinese users on the advantages of the program and how it is providing them with up to date news and data points on Dubai’s ever-growing investment environment,” states Li Lin, project manager of the Dubai Advantage mini-program, an arm of Dubai FDI.