The players in the agricultural sector are able as of September 4 to trade grains and other agricultural commodities and organise their freight on a new marketplace. Commoditrader.com, a Danish start-up marketplace is being launched today in Romania. Commoditrader platform creates better market access in an optimized way, where digitalization limits the distance between buyer and seller and gives the possibility to compare prices and other contractual terms, internally in Romania, and across borders, to increase negotiation power of farmers, and give traders easier market access.
Romania is the first country in the Eastern Europe where Commoditrader is launched.
The mission of Commoditrader ApS is to create a better market overview of buyers and sellers, enabling them to compare terms and prices available in the market. In order to be able to compare across many warehouse locations, and get access to new buyers and sellers, the platform is built with a freight algorithm which calculates bookable freight on all listings. The platform creates comparability in combination with market access in a way that is not possible in today’s market. This creates more transparency and gives better insights and negotiation power to the farmer, and easier market access for livestock producers, mills, malteries and trade houses, who buys the grains, corn and soybeans from the farmer. The platform is free to use, as Commoditrader aims to support farmers and gives them better tools to negotiate on the terms for trading.
“In the agricultural sector, we look at a gap where a lot of farmers are serviced typically by only a few trading houses. When opening the market and giving access to more potential buyers or sellers in the market to sell or buy, we make sure that the farmer and trading house, gets more bids when entering the market”, says Julie Koch Fahler, Co-founder of Commoditrader.
“Today, normally a farmer calls 2-3 traders to ask for prices and terms. In general, you can say, that the more you are asking, the higher chances you have of getting a better price for your goods, and an effective settlement. When Commoditrader is then offering a service that spreads the selling/buying interest, you make sure you get the best price available in the market – also across geographies”, Julie concludes.
The platform provides the opportunity of market segmentation, enabling users to create listings visible only for those one is interested to trade with, e.g. traders with high credit ratings, high turnover, or geographically close (especially if the transportation of goods is done with own trucks or tractors).
The marketplace is easily accessible by creating a user profile, which can be buyer, seller or both. Once the profile is set up, the user can create a listing to attract attention from buyers or sellers. All prices are listed in the platform, including the cost of freight. The user can choose its own freight provider and the platform will calculate all the logistic costs involved or one can book the freight from the platform. If the buyer and the seller decide on the trade, they can enter into a contract on the platform, all information on counterparties being available before entering the trade.
Commoditrader ApS was founded in the spring of 2018 by Julie Koch Fahler and Ida Boesen, two Danish women, and a group of large Danish farmers with farms in Denmark, Lithuania and Russia. The Commoditrader.com platform launched in Denmark 4 months ago, and today has around 15% of the Danish farmers on the platform. In Denmark, this 15% of farmers produce 40% of the country’s grain production. Commoditrader.com will be launching throughout Eastern Europe during the coming months, starting with Romania as of Wednesday, September 4.
“We choose Romania because is a market in rapid development, with a population of openminded people, ready for change – this we consider a key aspect for opening up for a new way of trading. Romania is also one of the largest producers of grains in Europe, though the structure of the trade calls for optimization in order to give better market access for the farmer in Romania, and it is therefore one of the highest priorities to our business”, says Ida Boesen, Co-founder of Commoditrader.
Romania has 53.4% share of farmland in its total land area, and although gathers one third of the farms in the European Union, much more than any other member of EU, it has only 4% of total agricultural output in the region, according to Eurostat data for 2016. The exports with agricultural products in 2017 in the EU was 9% of total Romania’s exports and 14.4% with non-EU countries.
Romania registered 3.42 million farms in 2016 and its total farming surface amounted to 12.5 million ha (7.3% in total EU farming land), being placed 6th in EU by farming surface. The share of small farms (less than 5 ha) in the total number of farms in Romania is the highest in EU, respective 92.2%. Only 4.7% of farmers are under 34 years old (6.0% in the EU), while 41% are over 64 years old (31.1% in EU).
Commoditrader ApS is a Danish fintech start-up founded in 2018 by a Julie Koch Fahler and Ida Boesen and a group of Danish large farmers, with the aim of supporting transparent and open trade and create better connections to farm level, using digitalisation.