How Satellite Data could help Trade Finance & Collateral Tracking

There are over 1 terabytes of photographs taken every day by satellites.  This amount of pixels is staggering, and there is much money that is interested in interpreting these photographs.   The real money is not taking photos, it’s in analyzing the photos and finding the patterns.  And when you apply this to supply chains of commodities, this information becomes extremely valuable.

Why?  Well you can go back in time and figure out how quickly construction crews are moving. Or you can look at ports and combine that with bill of lading data.  Companies make money selling one square kilometer data – including farmers, agriculture companies, US Government, and more importantly Hedge Funds.

Genscape is a company that plays in this sandbox.  They provide energy market data and intelligence across the oil, power, natural gas and LNG, agriculture, petrochemical and NGLs, maritime, and renewables markets.

This goes beyond market intelligence, and is real-time information.  I guess that’s what they mean when they say Data is the new Oil (btw, I hate that saying, because the vast majority of you haven’t given up your car or drive electric cars – you cant drive data).

Imagine wanting to know how those avocadoes in the field you are helping to finance are growing?  Or what about wanting to know the level of oil in storage facilities?  Some oil trader may want to make a bet on oil or LNG.

I do believe a big application of DLT and blockchain technology will be around tracking.   And right now there are firms turning satellite images into big money by tracking soft and hard commodity products.   These Satellite images are turned into data, such as Oil wells drilled in Nigeria  or determining the oil in a Chinese shipping port warehouse.  The computers can take images and analyze the tank based on angle of sun, height, etc.  Its crazy I know, but Hedge funds will pay big bucks for this data.

Traders can use this info for decisions, but so can bankers.  This type of information can give commodity bankers much more information about the commodities they are financing.

Avocados being grown, soybeans, whats happening with Palm Oil – and now that sustainability finance is all the rage – you get the point.  It adds depth to collateral tracking.  Location intelligence and geospatial awareness are now a necessity to have an effective supply chain management system, but the opportunities for banks, lenders and other involved in collateral tracking and management is just beginning.

I could see this as a real boon to blockchain applications working with supply chain visibility.  As we know, you are only as good as your data, but if you know a satellite is watching, well maybe it gets a bit harder to cheat.  There are so many examples of counterfeiting in trade that the OECD estimates that  counterfeit and pirated goods are worth nearly half a trillion dollars a year, or around 2.5% of global imports, with US, Italian and French brands the hardest hit and many of the proceeds going to organised crime.  Even 60 Minutes got in on the act with Olive Oil.

With world’s colliding like never before, I could see satellite data analysis becoming increasingly important in certain sectors, especially commodities.

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