Agro-tech startup based in South Africa TonnUp launched an online trading platform that helps farmers market and sell their agricultural products in a structured and transparent environment.
TonnUp has launched a new platform that aims to disrupt the local commodities market
Stephen Krüger, director of TonnUp and Viljoenskroon-based corn producer, explains that the platform was designed to support local farmers and buyers.
“TonnUp is the result of a fundamental need of farmers to extract a fair price for their inputs and their risks. Our farmers are the starting point of the food value chain but have the least ability to create a fair price for their product. They take all the risk and create real value. We believe there is a real opportunity to lift the veil on the commodity market and help farmers get the best prices for their products, ”said Krüger.
Established in the last quarter of 2020, the newly launched and innovative platform aims to empower farmers to dictate the prices, marketing and distribution of their products.
“South Africa’s current grain market is between 14 and 16 million tonnes, of which less than 25% is traded in a formal market. This means that potentially 75% of the grain harvest is available to be marketed on a formal platform, with full price and location transparency. Our value proposition is to bring buyers and sellers together and create a spot market where everyone gets a fair deal, ”adds Krüger.
TonnUp claims its one-stop-shop platform is cost effective compared to other existing mechanisms available to local farmers.
The advantages of the platform are as follows:
- Listed farmers get maximum production value for their products
- Buyers are able to make more informed purchasing decisions
- Promotes a transparent and efficient market.
How it works
Farmers can list their products on the platform at their preferred price after consulting with their brokers or elevator owners.
Buyers such as millers and processors can bid on these listed products whether there is currently stock or not available at all registered delivery points. The platform has essentially reduced the administrative and administrative tasks involved in the process from producer to consumer.
In addition, the trading platform allows buyers to bid for a preferred delivery location.
“Ultimately, we are using agricultural technology to enable farmers to manage their own produce at a fraction of the current cost, and from anywhere and anytime,” comments Krüger.
To remedy late payments, a problem encountered in the traditional commodities market, TonnUp has implemented a “trade plus 2” (T + 2) business day settlement cycle.
TonnUp provides an overview of this process.
“While elevator owners will continue to guarantee the quality and quantity of physical inventory on certificates of storage, TonnUp facilitates the treasury process so that sellers receive their payments and buyers receive their inventory quickly and efficiently. ”
To ensure the financial security of all parties involved in the transaction, the platform only allows clients to trade from pre-funded accounts. Client funds are held in separate accounts which are separate from operational accounts.
The platform will initially focus on grains, but agritech plans to expand to a range of other products such as cakes, fertilizers, soybeans and sorghum.
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The selected image: Tim mossholder via Unsplash