The global soya market value is estimated to be worth $180.3 billion in 2017 and is projected to be worth $265.4 bn by 2023. The global sugar market is estimated to be worth $97bn. Yield of these crops, as with most agricultural produce, is dependent on a myriad of environmental factors and is influenced by government intervention, policy and wider market activity.
Soft commodities, such as soya and sugar, and their related financial derivatives, are widely traded on exchanges worldwide, driven both by the purchase of the underlying physical goods and by the sale of “futures” (contracts for future purchase of the commodity at a given price), as standalone financial instruments.
At present, production data is only made available at fixed points through the year (usually after the growing season). The project will enable commodity crops traders to access updated production data on a more frequent basis than is currently available, allowing them to make more informed pricing decisions when they execute trades and so extract far greater returns from their trading activity.
The Soft Alpha project provides predictive analysis on soft commodity crop performance, in a sector that is currently dependent on historical data. In doing so, the project uses EO derived data products and analytics, to monitor performance on a dynamic basis, offering unique insights that not only provide competitive advantage to commodity traders, but also improve food security and increase transparency in regards to sustainability issues in the various supply chains.
Users and their needs
Soft-Alpha targets the following user communities:
- Commodity Traders
Commodity Traders are people or companies who speculate and trade in commodities. These traders either takes positions based on forecasted economic trends or arbitrage opportunities in the commodity markets.
At present, production data is only made available at fixed points through the year (usually after the growing season). The project enables commodity crop traders to access updated production data on a more frequent basis than is currently available, allowing them to make more informed pricing decisions when they execute trades and so extract far greater returns from their trading activity.
- FMCG Companies
FMCG companies are interested in commercial intelligence for key commodity products. The profitability of FMCG companies is directly linked to the performance of its supply chain and as such, the commodities used within it. Competitive advantage can be delivered for sugar and soya based products by obtaining market-leading insights into crop performance.
Consultants provide investment research and reports for asset managers, which include reporting on soft commodity performance.
Traditional means of providing such reports blend field based and desktop research, alongside existing datasets. Our EO data analysis will provide insight into the social and environmental trends that affect the key commodities traded around the world, that can be utilised by these consultants.
- NGO / Government
By providing more detailed insights on crop performance, governments are able to plan and implement policy accordingly.
The users are located at the following locations and will access the systems remotely:
- London, Old Greenwich (Connecticut) and Rotterdam
Service/ system concept
Rezatec’s secure portal is the tool delivering the dynamic geospatial analytical insights and is providing frequently updated information on global commodities.
The Soft Alpha service is being developed to produce a reliable means of assessing future crop yield at a regional or local level.
It captures a wide range of landscape characteristics in high spatial and temporal resolution and provides layers of geo-referenced information and associated analyses, relating to key crop parameters such as canopy cover, height and health to a combination of optical vegetation indices and Synthetic Aperture Radar (SAR) derived parameters connected to crop structure. These are to be used to give a detailed understanding of crop status at locations, selected using statistical sampling techniques
The analysis of the remote sensed data combined with existing ground data (weather/soil) allow propriety data products and insights to be developed both for incorporation in existing CTRM solutions and/or as a standalone web-based product. Predictive crop performance tools and mapping are produced as a service for diverse customers such as commodity traders, FCMG companies and consultants.
The key system components are shown in Figure below.
Space Added Value
The Soft-Alpha system makes use of the following space assets:
- Earth Observation (EO) data, to cost-effectively support assessments of climatic and crop parameters such as canopy cover, height and health using a mixture of sensor types including Synthetic Aperture Radar (SAR), Multi-spectral Optical Imagery and LIDAR. EO images will be sourced from a variety of satellite providers, according to the attributes required;
- Global Navigation Satellite System (GNSS) devices for accurate geo-referencing of field validation locations
The project has kicked-off in January 2018. Currently we have completed the design phase and successfully closed the Critical Design Review in the CDR meeting which took place on the 29th August.
We are now starting the development phase with the main focus in the first few weeks on the completing the Big Data storage and processing architecture and the automatization tool for the download and pre-processing of satellite data. We will also complete the crop identification model algorithm and crop yield model.
The first results of the development activities will be presented in the next progress review (Factory Acceptance Test) which is planned for November 2018.