In an interview with Miller Magazine, Maarten Elferink, CEO of Vosbor, highlights the challenges ingrained in the traditional grain trade and positions digitalization as the beacon of transformation. As the trade of food takes center stage, digitalization is poised to play a vital role in making grain markets more efficient, robust, and accessible, Vosbor CEO underlines.

The grain trade, a labyrinth of complexities, has long relied on traditional methods, burdened by inefficiencies and fragmented processes. Communication relies on phone calls and emails. Contract performance issues, often mired in lengthy email chains and phone conferences, demand swift resolution. Inefficiencies abound, inhibiting the seamless flow of information and impeding the timely execution of vital trade decisions. In an exclusive interview with Miller Magazine, Maarten Elferink, CEO of Vosbor, unravels the challenges inherent in the grain trading industry and how digitalization emerges as the beacon of transformation, rewriting the rules of the agricultural supply chain.

Fueled by the recognition of inefficiencies and fragmented data within grain and oilseed trading, Elferink embarked on a pioneering mission to revolutionize the industry. The result? Vosbor, an independent digital platform designed to transform the landscape, confronting challenges ranging from outdated communication methods to cumbersome paperwork. Vosbor spans the entirety of the grain trade lifecycle, presenting a centralized solution for contracting, post-trade execution, and comprehensive market analysis. For buyers, Vosbor unlocks global sourcing opportunities, while traders benefit from free brokerage, real-time insights, and efficient contract management, as highlighted by Elferink.

Offering a glimpse of the future, Elferink predicts a significant shift toward digitalization in the global agricultural trade. Drawing parallels with industries like power and gas, he envisions higher efficiency, reduced bid-ask spreads, and increased market liquidity. As the trade of food takes center stage, digitalization is poised to play a vital role in making markets more efficient, robust, and accessible, Vosbor’s CEO underlines.

Let’s step into the future of grain trading with Maarten Elferink, as he shares the journey behind creation the digital agricultural marketplace.

What inspired the creation of Vosbor platform, and what specific challenges within the agricultural supply chain does Vosbor address?

In 2015, after working in finance for several years, I started trading grains and oilseeds in the Black Sea region. We focused on sourcing wheat, barley, and other feed ingredients and shipped them to East Asia. Coming from financial markets, I was surprised that the physical trade was still taking place offline. Everyone does business over the phone and by email, with important data stuck in silos. I heard of people in trade execution who get more than 20,000 emails a month. And for bulk business, it is not abnormal to have 100 people copied on an email when a contract performance issue needs to be resolved or even about a vessel’s arrival date. You cannot act fast if 100 people have something to say. This sort of inefficiency made no sense to me.

So, I decided to build something to address these issues, as we realized that a small company could probably develop a solution much faster and cheaper than the large corporates in the industry. The interest for what we built was overwhelming and we stopped trading to focus all our attention on building the platform.

Could you tell us the key features and benefits of Vosbor’s trading platform for both trading firms and end-users?

Our platform is a digital marketplace for over 25 grain and oilseed products and is designed to capture the entire lifecycle of the agricultural commodity trade. You can create anonymous market bids, offers and tenders, or send them directly to your approved counterparties, in private. We offer flat or basis pricing, any origin and destination worldwide, no size restrictions, in bulk or container. All terms, conditions and specifications are possible, and you can tailor it to your needs. This distinguishes us from the futures markets; we focus on the physical trade and handle the trades that are governed by less standardized, over-the-counter contracts.

For buyers, whether procuring grains, oilseeds, meals or oils, Vosbor allows you to source anywhere in the world. Interact securely with your approved counterparties or find new suppliers. You will no longer need to stitch together different systems to get a comprehensive view on the market, positions, execution and risk-exposure. We give you end-to-end visibility by default and markets will become much more accessible, more liquid.

For traders, we essentially provide free brokerage. You can quickly quote your prices anonymously to the market or direct to your approved counterparties over-the-counter, without anyone seeing your bids and offers. We give you access to the market anytime, anywhere. You can stay well-informed while on the move. We help you enhance margins on your assets and explore new trading opportunities or strategies. We have more than 100 companies on the platform, hundreds of individual users and we’re growing fast! 

We give you fast contract drafting, automatic trade confirmations and effective management of your positions. Plus, you can provide documentary instructions, prepare shipping advice/vessel nomination, manage vessel info and share shipping documents. All with a fully auditable data trail and strict permission controls. We enable an easier EFP execution and trade settlement, tracking of the string and facilitation of wash or circle-out. You can add your colleagues or third parties (shippers, surveyors, banks or other) and keep an eye on who is doing what and when. We have a mobile app as well, so you can receive real-time push notifications on all important events. Whether you are a flour mill, a feed compound, a trader or a broker, we give you the platform to stay in sync, to focus on where your added value is crucial and reduce redundant, time-consuming paperwork.

An essential part is ensuring that this doesn’t disrupt the relationship angle of the grain trade. So we have put a lot of effort into building integrated communication tools as well. You can build a network of industry professionals, swiftly share information, documents and inquiries, with an integrated chat to communicate with counterparties and colleagues. Like LinkedIn, but then exclusively with people from the commodity industry. Discover new counterparties, evaluate them with a full KYC process and our own reputation system. You can find out more about our platform here www.vosbor.com/#howitworks

In the world of agricultural commodities, transparency and security are critical. How does Vosbor ensure the secure sharing of documents and transparent trading for its users?

I always understood that traders prefer secrecy for the sake of margin, but in reality, the flows are already very transparent. As my friend GJ van den Akker famously said at the FT Commodities Global Summit a few years ago; there are no secrets today in the world of agriculture. Data on commodity prices, weather, crop yields and trade flows have become affordable for farmers and end-users, diminishing the information advantage of the trader. This is obviously also why the grain majors have integrated vertically, focusing on higher-margin business lines.

So, today it is much easier to attract bids and offers on our digital marketplace. We also offer an environment where users can quote their bids and offer directly to their approved counterparties over-the-counter, without anyone else seeing these quotations or the trades that take place. Essentially, it works like a dark pool in the equity market, which is intended to reduce volatility by obscuring large trades. Our users decide what to share and with whom. 

We have made huge investments in our security. Our CTO previously worked as Head of IT at Rabobank and his standards for compliance are rigorous. The information on our platform is stored in a multi-cloud system and is encrypted at the source. This means that even if you hack into multiple unknown cloud server locations in the world and miraculously piece together all the bits of information, you still wouldn’t be able to read any of it because it is strongly encrypted. Moreover, specialized firms in security assessments regularly review our platform’s architecture, security configurations and authentication module, to ensure all systems are secure and user info is safe.

What sets Vosbor apart from other digital grain and oilseed trading platforms in the market, and what makes it an attractive option for traders and buyers?

First of all, we are truly independent. Vosbor is funded by venture capital from Silicon Valley and private individuals, like Chris Mahoney (former CEO Glencore Agriculture), Soren Schroder (former CEO Bunge) and Bram Klaeijsen (former Head of Asia at Cargill), allowing us to operate without any conflicting commercial ties to the industry.    

Secondly, we cover the entire lifecycle of the grain trade. You can use our platform to efficiently manage your contracting, or you can decide to use it to expedite part or all of your post-trade execution. And some may just use it to analyze the historical, aggregated market data that we capture as the platform user base continues to grow.

Finally — and maybe the best of all — our platform is 100% free! We only charge a fee to the users who do not buy or sell physical grain or oilseeds, for example, third-party providers like the shippers or cargo surveyors.

Can you share any success stories or examples of how Vosbor has helped trading firms and end-users improve their operations and efficiency within the agricultural commodity market?

Grain markets are more volatile than ever, sometimes it is minutes which make a difference of several USD/mt. Procurement is not an easy task today. Regardless of whether it is a truckload or a vessel of 60,000mt, once a decision is taken to buy the next lot, the procurement manager needs to act fast.

However, it might take multiple phone calls over hours or days, to get a clear picture of what is available on the market. While confirming the contract with all the details takes even more time. On top of this, there may be other urgent matters that need the attention of the procurement manager.

On Vosbor, he can send out structured inquiries to a group of preselected suppliers within seconds and make it easy to compare offers. Suppliers can not only counter on price but on all terms laid out in the inquiry. Differences in the inquiry are clearly marked, and all steps of the negotiation are documented. With our mobile app, he can negotiate from any given place, at any given time. You get a direct message when there is a counter and it is visible when someone has seen your bid, offer or counter.

This makes life easier for the procurement manager, as it provides a better picture of the market, and they will see more prices. Of course, confidentiality will also be a plus as their trade will not be reported in the market (which brokers tend to do). Moreover, he can do the contract drafting in our execution environment, provide the documentary instructions and everything else, as we have a streamlined solution from negotiation and contracting, all the way to the invoicing stage.

We are not aiming to remove the important personal contact between buyers and sellers, but rather giving you a platform to eliminate repetitive, time-consuming work and focus on what drives value.

Given your extensive experience, how do you see the future of the global agricultural trading landscape, and what role will digital platforms like Vosbor play in shaping it?

Well, accomplishing more in less time with less resources is what has driven humans forward for centuries. Even if some in the industry don’t like it, digitalization is inevitable because it is the path of least resistance. It makes our lives easier. A large share of the global agricultural trade will take place on screens soon. There is no way it’s going to stay like it currently is for the next five or ten years because there’s nothing else in this world that is done in this way anymore. The grain industry may be slower to adapt, but just looking at other bulk trade — power and gas for example — and it is clear where the industry is going. And ours, the trade of food, is arguably the most important trade that exists, right?

Already we have seen significant changes in the last few years. Big data and predictive algorithms have increased the quality of fundamental analysis and the research today is more real-time than ever. Data on prices, weather, yields and trade flows have become accessible to everyone. Cloud computing is diminishing the traditional advantage that large trading companies had because of their huge in-house IT systems and computing power. Social media like X/Twitter have introduced new channels of information and potential sources for analysis. Furthermore, there is increasing pressure for regulators to force greater transparency in the market, along with more standardization. Plus, the Covid situation really forced the industry to adapt to a remote-first environment and find ways to do more online.

Maarten Elferink | CEO of Vosbor

A great way to see the effect of these factors on the commodity trade is to look at market efficiency. As the level of standardization and the transparency of information rise, commodity markets approach higher levels of liquidity and competition, reflected in faster trading and reduced bid-ask spreads. Like the power and gas markets, a growing number of commodity markets are approaching a state where the market’s efficiency and transparency have reached their highest potential levels. But the trade of food is the most important one and traders perform a vital role in getting food from where there is surplus to where there is shortage. Their importance will only grow as we face the negative impacts of climate change. Together we are going to make markets more efficient, robust and accessible. The higher the liquidity, the better these markets function and the better it is for everyone. We will help ensure that food always finds its way from surplus regions to the people that need it most.

What upcoming developments or initiatives can we expect from Vosbor as it continues to expand its presence in the global digital marketplace for bulk agricultural commodities trade?

We have started experimenting with Large Language Models (LLMs) or generative AI. We ran some successful tests in automating small parts of the post-trade execution process, but as we capture the entire trading value chain, the opportunities for the application of AI in our platform are infinite. Some examples include: the automation of drafting and comparing of contracts or shipping documents, an AI assistant that can quickly create bids/offers based on previous contracts or when certain market conditions are met, or an AI assistant that counters interesting bids/offers for you based on inventory and trading limits while giving you full confidence to make decisions based on internal and external data.

For comparison, take a Gigafactory that produces all the parts of a Tesla vehicle. Because they manufacture everything in-house, you have a level of vertical integration that allows Tesla to produce vehicles more quickly and reduce its exposure to supply chain problems. It creates economies of scale and gives them an opportunity to automate many manufacturing processes. Effectively we do the same with the trading process, because on Vosbor all the information on your supply chain is connected for the first time. Our users realize how much more effective they are when they have a comprehensive overview with all the info they need to trade, allowing them to handle issues more efficiently because counterparties have access to the same info in real-time. I believe integrating AI into our platform will only boost those efficiency gains.

Would you like to add anything else?

If you are looking to find new counterparties, to enhance your post-trade execution, or perhaps you just want to eliminate redundant, time-consuming paperwork — go to www.vosbor.com and register yourself and your company. Join us and be part of the future! And we are hiring too.