New app gives grain farmers an edge to hedge
After working in the agricultural trading business as an option writer, Andries D’Alebout found that grain farmers had limited options when making hedging decisions as access to Safex market updates were delayed and limited. With a Master’s degree in math
Combining h i s l ov e f or mathematics and agriculture, former option writer Andries D’Alebout, created a mobile application to provide grain farmers with real-time Safex market updates.
A delay in communicating market data to farmers prompted D’Alebout, the “Zuckerberg” of agriculture service provider Dalevest, and his team of six to develop the application. Having grown up on a farm, he noticed how his father’s decision-making was impacted by the limited market information available. “I started this without knowing if it would go anywhere besides helping my father a little bit,” D’Alebout told Finweek.
The free application is a first-ever for the industry in South Africa. It has grown through word-of-mouth and social media, boasting 2 500 users across the country since its launch at the beginning of the year
he appl i c at i on s e r v e s a s a n information hub that provides grain farmers with JSE prices for maize, soya beans, sunflower and wheat. Two daily reports are released at 8am and after 12pm. Graphs and information about commodities, with technical analysis, are also provided. A chat function is available for grain farmers to engage with each other, ask questions and share information, explains D’Alebout.
Dalevest also offers a grain trading platform. Farmers can send information about their grain to approximately 14 trading houses partnered with Dalevest. The farmer is then partnered up with the trading house that offers the best price for their grain. “We are sort of a connection hub too,” says D’Alebout.
The market information is sourced from an in-house Reuters terminal, different companies in the US and t he Chicago Board of Trade, says D’Alebout. A lot of the information is also supplied by local farmers, making the market more transparent and accessible for stakeholders.
Programming for the application sta r ted over a year ago, but t he development process is continuous. Following the Facebook model, D’Alebout says updates on the app are introduced every month and a new feature, a profit monitoring tool, is being built. One of the recent technical issues was dealing with the large.volumes of users, especially betweenT 9am and 12pm when 1 500 users access the application to check prices, he says. It took a month’s worth of programming to iron out.
Founder of Dalevest
Dalevest has received positive feedback f rom users so far. “The process by which they [farmers] make decisions has changed drastically,” says D’Alebout. Although many farmers aren’t open to working with technology, D’Alebout says Dalevest’s presence on social media has connected them directly with farmers already using technology. The application is freely available for download from Apple’s App Store and Google Play Store for Android. Currently, most of the revenue is generated from advertising, says D’Alebout. Businesses have approached Dalevest to partner and incorporate ideas and products with the application.
Dalevest will be hosting a Grain Farmer of the Year competition, which will be launched on 1 October. By incorporating the application, the farmer with the best yield and the Safex price the grain was hedged by will be awarded the winning prize of R500 000 in August 2016.
By making the market more transparent to farmers, D’Alebout plans for Dalevest to be the number-one information hub and communication channel for farmers.
“I started this company with the idea to help the farmers in South Africa … we definitely want to be a big force in the South African agricultural market,” he says.