The cotton industry may evoke images of rural farmers and old Memphis industry, but modern-day businesses rely heavily on cutting-edge technology for production and trade.
The Seam, headquartered in Memphis, was founded by global agribusiness companies and specializes in commodity trading and management systems, including what they refer to as the world's first completely online, anonymous exchange for cotton trading.
The company announced in January that they are partnering with IBM to form a blockchain consortium for the global cotton industry to improve trading. The companies intend to lead a collaborative initiative across the industry to create a supply chain and trading ecosystem built on IBM blockchain technology.
A blockchain is a secure digital ledger that can be shared on multiple screens, enabling companies to work together with increased speed and reduced interference. The technology will impact trade by allowing instantaneous transfer of currency.
“This new technology will be transformational for the cotton industry,” said Mark Pryor, Chairman and CEO of The Seam.
“There are numerous organizations, processes, systems and transactions involved from field to fabric. Situated at the intersection of agriculture, finance and technology, The Seam with the help of IBM, is uniquely positioned to introduce blockchain technology to cotton-affiliated businesses worldwide.”
Blockchain technology encourages a network effect, whereby the service becomes more valuable the more participation it has. IBM hopes to play a key role in driving its global adoption, due to its already-present digital footprint in all cotton producing and consuming regions.
“Blockchain offers enormous potential to drive innovation throughout the cotton industry,” said Arvind Krishna, Senior Vice President of IBM Research.
“A consortium approach using IBM Blockchain and the Hyperledger Fabric can help create greater efficiency and serve as the foundation of a robust system for massive collaboration.”
In 2000, The Seam began operating the world’s first online, neutral trading exchange for cotton, on which the company says tens of millions of bales have been traded and cleared on its platforms. In September 2016, they launched a cloud-based commodity management system for the peanut industry, the first of its kind.
The ownership group of The Seam includes renowned cotton leaders Calcot, Cargill, ECOM Agroindustrial Corporation Ltd., EWR, Inc., Louis Dreyfus Company, Olam International, Parkdale Mills, Plains Cotton Cooperative Association and Staple Cotton Cooperative Association.