Author: originals

Customs procedures for food industry sector

Customs procedures of a country need to be modernized in such a way, which encourages its food industry sector’s growth. If you are a food trader, either it is importation or exportation, customs clearance remains a hindrance in the back of your head until it is cleared. When you are selling or purchasing your food items in a foreign location, the statuary requirements of different countries vary. Therefore, one needs to apprehend the legislations and regulations of the state where you intend to buy or sell the merchandise. These obligations must be met before aiming to clear the customs.

 

Customs is the state department, which controls the flow of imported goods and collects fees levied by the Government. Customs agency makes sure that the animals you are trading, or perishable food items, are according to the laws of importing land. Although every country has a couple of measures specific to their geographical needs, we will discuss standard customs procedures below.

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Customs Documentation

Firstly, you must gather the required documents for the customs process. These compulsory papers are Bill of Lading, Commercial Invoice, Insurance Certificate, Purchase Order, and Bill of Entry. The documented materials you include must have the perishable details of your food products. Because your products could expire, the dates and other charts need to be interpreted in the documents. Shipping paperwork is essential and could vary from country to country. You could be trading canned food, or fresh fruits & vegetables, or farm machinery; it also needs to go through proper credential work. The customs certifications or bills must be obtained to clear the customs procedure.

 

Customs duty

The duty paid on imports, or in a few cases on exports too, is centered on the food items’ value or the size, etc. A Foreign food trader might be exempted from customs duty in most countries. Still, it will depend on the particular state where you are headed. There could be a tariff charge as well, a tax on importation and exportation, which is decided between governments. One needs to pay all the customs related fees to speed up the procedure. Especially for the food industry sector because you don’t want your goods stuck at the port and perish.

 

 

Electronic systems

Everything is transforming into online and digital forms, and customs is no different. European Union has programmed a CDS. A food trader will need to contact the designated portal and create an application. Many countries have adopted these electronically processed applications, and you need to understand the selected state’s automated procedures if any.

 

 

Declaration

The official paperwork of customs declaration provides details of shipment under trade. It would contain all the imported or exported food industry’s items in a list. Any company or individual, who is the owner of the shipment, can lodge the customs declaration by themselves or by representatives.

 

 

Inspection & Presenting the goods

Customs inspectors or relevant officials can check the shipment at any time. The person-in-charge of the consignment needs to present the merchandise to the customs office as part of the procedure.

How to choose freight solutions for export?

Exports business could turn tricky if you don’t get your shipments right, and things could go south quickly. You should choose the appropriate freight solution for trading internationally by considering the following tips.

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Prepare well

When you visit freight forwarder, and you have no homework with you, it will waste a lot of time and effort. You need to identify your objectives and research your industry niche. Decide which form of transportation and the size of the shipment you are going to require. You should chart out the job-specific services that your task demands. You must research the export treaties and other obligations as are necessary for your exporting business. Also, verify if the freight forwarder is authentic and registered with the relevant organizations. A company should always plan the required speed of delivery and cost of service, including the options of rail, sea, roads, and air.

 

 

Consider your options

There are many factors when transporting merchandise internationally. Freight rates, or the infrastructure costs like warehouses and the way-fare, play the deciding factor. Price impacts your decision, but one should not always go for the cheapest possible option, instead find value for money. The face-price might be more affordable, but when all the additional services, some of which are essential, are considered, then the process might be expensive. You should not fall for the asking price, and due research is what you must conduct, and this is how you choose freight solutions for export.



Arranging the right documents using a software

Many software is available in the market to do this task for you. When you need to confirm whether you have arranged all the necessary documents and those are typo-free, you can use the digital tools to save time. These apps/tools also enable you to email directly from the interface. Screening the package against the export regulations in place is possible as well. It would help you avoid the penalties. Using computer tools for exports is an excellent strategy. If you are using software for the surface work, you will choose the freight solution without much trouble and lesser costs.

 

 

The reputation of the freight service

Use your corporate network to gain knowledge of the reputation the freight service provider possesses. You could check their website for reviews, but it is always best to use your reference to conduct the research. Once you have determined that the transporter has the right reputation in the market, you could decide easily. The legitimate freight solution company would be able to provide you testimonies from their respected clientele. Additionally, their licensing documents and registration certificates could guide you as well.

 

 

Choose one with experience in your field

The freight solution, you are going to choose, needs to be professional and expert in handling the goods of your business. The food industry, for instance, could be a naïve field for the general shipment services. The products are perishable and delicate, which would require a skilful shipment. Take a look at the freight solutions your competitors are using. Best of luck!

Managing Exports Risk In The Food Industry

If the Chinese Yuan weakens relative to India Rupee (INR), import of Chinese toys in India becomes relatively cheaper and therefore adversely affects the sales of Indian toy manufacturer.

Many businesses are going global! The expansion of any enterprise has not entirely flourished without indulging in the export function. There could be many reasons for exporting your products, ranging from better prices & more significant margins to market niche & business share. Whatever your reasons are for the export business, you need to be prepared for the jittery wind along the way. It has high risks of transportation, demographics, cultures, stereotypes, laws, and lack of time management for every industry. It is imperative to manage those risks to grow your business through exports.

As far as the food industry is concerned, many developing nations largely depend on their food exports. With high dependence comes excellent preparation! They need to ensure food safety and quality, meaning their items should reach their buyers in the global economy as per their standards. Keeping the global supply chain intact and every country playing its part by maintaining food control measures can manage it. If it is a balanced fit between industries and the Government, then the risk factor is minimized.

Budgeting is an export-risk factor. It depends on foreign currencies that keep fluctuating. A company’s budget could see an incline or decline based on the rapid variation of forex rates. However, in reality, the currency fluctuations even impacts companies with no dealing in international markets. For instance, a domestic toy manufacturer, who is competing with traders importing toys from China, is also exposed to fluctuations in the prices of Chinese Yuan (CNY). If the Chinese Yuan weakens relative to India Rupee (INR), import of Chinese toys in India becomes relatively cheaper and therefore adversely affects the sales of Indian toy manufacturer.

The other types of risks involved with exports can be either related to payment, transportation, customs procedures, or insurance …

However, in reality, the currency fluctuations even impacts companies with no dealing in international markets. For instance, a domestic toy manufacturer, who is competing with traders importing toys from China, is also exposed to fluctuations in the prices of Chinese Yuan (CNY). If the Chinese Yuan weakens relative to India Rupee (INR), import of Chinese toys in India becomes relatively cheaper and therefore adversely affects the sales of Indian toy manufacturer.

If you export the product without clearing the debt first, there is the risk of non-payment. Especially when you are dealing with new clients with no prior credibility, it is best to receive cash in your account before supplying. In the case of a regular client, you may afford to take such small-scale risks based on previous experiences.

“What if your client refuses to pay you the amount before receiving the product?”

Credit sales constitute a significant risk involved in the export industry. If you shipped a container of grains, for instance, on a 20 days’ credit, and the party refuses to lift stock from the shipment yard due to any given circumstances. This interruption will delay the payments and disrupt your cycle of debts. There could also be a scenario where your client claims the delivered product is unsatisfactory; hence, the fee is not cleared in time. We can not emotionally or morally influence the buyer in export business, whether it is only the food industry or as a whole. However, if it was a local customer, we could set up a real meeting in an instance and resolve the issue.

What if your client refuses to pay you the amount before receiving the product? Many people in the trading business and particularly in the food industry use a Letter of Credit. This document is a financial instrument that is secure for both sides without any risk. The payment mechanism in the export business usually revolves around the Letter of Credit. We can manage this export risk efficiently by using this instrument.

There are many risk factors, but if one learns how to overcome them or manage them, rest is only a heavenly story. Generally, all industries face risks, and the food industry is no different. The only thing that matters the most is the management of those risks. You could manage them by avoiding credit, introducing a stable exchange policy, ensuring safer financial instruments, and maintaining the highest level of quality.

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Ali Iftikhar

Ali Iftikhar is a Blogger from Pakistan and a Sales Manager with the experience spanning over a decade.

Impact of COVID-19 on the international trade of food industry

Impact of COVID-19 on The International Trade of Food Industry

Overall, trade is estimated to take a blow of 13-32% as an aftereffect of the world pandemic. Since every business was put in nosedive by the health catastrophe, it will have adverse effects on commerce.

What a year to be living in this world! Our generation or the former never observed a pandemic of this intensity. We are gliding through it and hopefully will survive it. The experts are saying International trade will face the most significant impact of modern history due to COVID-19.

Overall, trade is estimated to take a blow of 13-32% as an aftereffect of the world pandemic. Since every business was put in nosedive by the health catastrophe, it will have adverse effects on commerce. It is essential to keep in mind the fact that, Global economy be not in its best shape before the lockdowns began. People are comparing the current crisis with the worldwide financial crisis of 2008-09, and many are worried that the present situation might be even weaker.

The food industry is near destruction because many countries have banned specific food items to export because of COVID19. These restrictions deem not to be lifted until the world finds a cure for the virus. Therefore, the near future of the food industry is unstable. Russia, for instance, has proposed to forfeit grain exports. Although the officials are claiming there is no food shortage as of now, there is fuss in-the-air. If this uncertainty prevails and Governments start to panic, it could result in more export stoppages of food trade. It could cause another global crisis amid an ongoing pandemic. If countries stop food exports completely, the international food markets will be scarce.

The span of this pandemic had spread in 190 countries. A crisis of this multitude can result in abrupt manners for the traders around the globe, and no one can judge what precisely the loss is going to be. The disastrous day has already dawned on the global oil industry, what more is to come? Is international trade going to hit its rock bottom? The blow to international trade disrupts the airline industry, Freight businesses, productions in China, and other areas.

World Governments had put all countries in lockdown to avoid the spread of disease. This self-quarantine has resulted in the closure of the hotel and restaurant industry as well as food production, shipment. The related industries, like beverages and beer production businesses, have been affected. Even if restaurants open in the name of home-delivery or take-away, the burgeoning rise of social-distancing awareness has kept the customers from hanging out. Panic buying had its fair share of negative impact in the bargain. Impulsive buying disturbed the food supply chain. In some areas, sellers and vendors increased their prices far above the reach of people. These specific dangers have put the Food Industry on the step back.

“This self-quarantine has resulted in the closure of the hotel and restaurant industry as well as food production, shipment. The related industries, like beverages and beer production businesses, have been affected.”

The population of the world hinges on the International Trade and Food Industries for the supplies and day-to- day livelihood. Business people and Trade industries must support their Governments and come up with a plan to avoid the situation. They must ensure there are no shortages around the world, as no country can deal with the crisis on its own. All the nations around the world need to work together as a team.

Source : Remarks by DG Azevêdo

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Ali Iftikhar

Ali Iftikhar is a Blogger from Pakistan and a Sales Manager with the experience spanning over a decade.

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