The Ministry of Industry and Trade intervenes to support the business world

Share with PV Tien PhongTran Thanh Hai, Deputy Director of the Export-Import Department (Ministry of Industry and Trade), said there was information that the D/P payment method was the cause of the damage, but in fact, in international trade. forms of payment applied such as: wire transfer (T/T); payment of receipt of documents (D/P); letter of credit (L/C)… All forms of payment have advantages and disadvantages from the point of view of each business party.

In particular, according to the export container sharing company stuck in Italy, although it is considered the least risky payment method, in fact, in agricultural trade, L/C is not the most popular payment method. The nature of agricultural products is often of low value, each shipment being worth several hundred thousand dollars. Buyers don’t buy lots at once, but they buy pillows, in small lots. If each shipment also opens an L/C, each month there may be several dozen L/Cs. Opening an L/C requires a bank deposit, if not 100%, a certain percentage is required. Thus, the buyer will have a deposit in the bank during the waiting time to receive the goods, up to a full month. No buyer wants that. If the seller insists on the L/C, they will look for another seller. Not to mention the time for receiving L/C from the buyer’s bank is also quite long, at least a week and market prices fluctuate from day to day. As long as the L/C must be received, the seller can ship the goods. Therefore, L/C only accounts for about 5% of payments for agricultural products.

In fact, cashew nut import and export businesses often use T/T, D/P and CAD payment methods when signing contracts. The D/P or CAD method reduces the risk of nonpayment by the seller, but is also less time-consuming, does not require the buyer to deposit at the bank, so it is often accepted by both the buyer and seller. Since then, so-called international business practices have taken shape.

“When the market is for buyers, they will offer the payment method that is most convenient for them. If the market belongs to the seller, then the seller can apply a method that is profitable for them,” said Pak Hai.

According to Mr Hai, the story of cashew seed containers in Italy is not over, the parties need to join hands to find the most possible solution to support business, so as to also take the necessary lessons for agricultural exports, production continues to increase.

According to Pham Tuyen

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