UNIVERSITY POLITEHNICA OF BUCHARESTFACULTY OF ENGINEERING IN FOREIGN LANGUAGES

Greek Citrus Exports

Student: Camelia Giambașu

1/19/2016

Table of Contents

1. Product description.................................................................................................................................. 3

2. Target market..............................................................................................................................................4

3. Entry mode................................................................................................................................................... 5

4. Marking and Packaging...........................................................................................................................7

6. Transport and delivery.........................................................................................................................17

7. Payment terms......................................................................................................................................... 18

References........................................................................................................................................................... 21

1. Product descriptionCitriculture represents an important branch of the Greek economy with an

annual production of 1, 3 million tons. The main citrus crops grown are Oranges,

Mandarins, and Lemons and during the last years, there has been a tendency to cultivate

the red varieties of Grapefruit, like the Ruby Star. Citrus crops exported from Greece are

about 350.000 tons per year. The fresh Citrus fruits represent the greatest volume of

production. The property regime in combination with the viability of many agricultural

exploitations consist a serious hindrance to the modernization of the sector and the

reconstitution of the exploitation.

a. Oranges

The main Orange variety is Washington Navel Parent. This variety was

principally important during the decades 1950-1990, which is before the great

competition with Spain started. It can reach an annual production of 750.000 tons but it

faces a lot of problems during trading. The quality is reduced due to the physiological

rind disorders (creasing) and its sensitivity to rainfall because of the physiological

disorder water-spot. Particularly, the early varieties Navelina and New Hall participate

in the group of navel Oranges with an 11 % rate. For the last 15 years there has been a

tendency to replace Washington Navel Parent by the early Navelina, New Hall and Ro

25. There had also been an effort to spread the variety Skagg’s Bonanza, but it was

interrupted because of the sensitivity of that variety to Mal Nero. The other navels

belong to the old variety Washington Navel Parent that covers the commercial period

between November to March. For the last years there has been an effort to spread the

late Navel varieties: Navel Late and Lane Late. The “Valencia” oranges showed an

economical prosper during the decade 1970-1980, and contributed to the economic

development of the County of Lakonia. However, the parallel cultivation of this variety

in Spain and Morocco caused problems to its distribution. Because of the marketing

problems and the physiological rind disorders, there is a tendency to restructure the

surfaces that are covered with the group of the Navel Oranges by the Mandarins Nova,

Page and Encore.

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b. Mandarins

Greece is par excellence a country of Willow-leaf Mandarins. This is a traditional

mandarin, with an excellent taste but with a distribution problem because of the big

number of the fruit seeds. Hence, by the beginning of 1970, it begins to be replaced by

the Clementines. Another basic Clementine variety, which is cultivated during the whole

year, is the S.R.A. 63 (origin from Corsica). This variety is commercialized during the

period November to December and experiences a great competition with the

Clementines of the other Mediterranean Countries. There is also a tendency to replace

this variety with the breedings of other Mandarins like the Nova, Page and Encore.

c. Lemons

Until the year 1990 Greece was a great export country of Lemons (after Italy),

with the variety Maglini as a main production. This variety showed high sensitivity to

Mal secco, the disease that caused massive damages to the crops during the last 20

years. There were also serious damages during the winter of 2004. Nowadays, there is

the tendency to spread varieties that are tolerant to the Mal secco, like the

Adamopoulou, Vakalou and Zambettakis.

2. Target market

a. Destination Markets

The main destination markets of the Greek citriculture are the Northern

countries of the European Union (England, Germany, the Scandinavian countries) and

the Central and Eastern countries (Russia, Romania, Poland, Czech Republic). According

to the data estimated for the last three (3) years, the 27 % of the production is destined

to exports, the 28 % is processed by the local factories and the 40 % is destined for

interior consumption.

Greece has a big volume of Orange exports between the months December to

February and an important participation in the late summer exports, among Spain,

Morocco and Egypt. But while Greece has a bigger volume of exports in general than

Egypt and Turkey, in the time period of September to November the rate of the Greek

participation is only 5%. The peak time for the export of Mandarins is during December

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and January. The exports begin late in November, while after January the exports are

reducing. Greece exports little quantities of lemons during the peak time (25.000 tons)

but is forced to import during the summer time.

i. Oranges

In MY 2013/14, Greece exported 365,806 MT of oranges mainly to Romania

(80,048 MT), Serbia (38,477 MT), Bulgaria (33,612 MT), Poland (32,117 MT), Hungary

(27,914 MT), and Germany (24,250 MT). Navels and Tardives are marketed mostly from

November through March.

ii. Tangerines

In MY 2013/14, Greece exported 83,100 MT of tangerines, mainly to Romania

(25,603 MT) and Bulgaria (17,797 MT). Clementines are marketed from January to

May.

iii. Lemons

In MY 2013/14, Greece exported 7,500 MT of lemons mainly to Bulgaria (2,765

MT) and Romania (2,550 MT). The Maglini lemon variety is marketed from December

to May and from September to November after artificial ripening.

iv. Grapefruit

In MY 2013/14, Greece exported 2,200 MT of grapefruits mainly to Bulgaria

(1,015 MT) and Romania (452 MT).

3. Entry mode

Greek agriculture today is mainly focused on the production of high quality,

competitive, certified, labelled products produced by innovative procedures compatible

with sustainable development principles. Improved quality and the resulting increase in

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value of Greek agricultural products will be achieved through technological innovations

resulting from focused and well-coordinated agricultural research.

Similarly to the E.U. Countries, the Greek Citrus crops are facing a deep

reorganization. The reformation of the CAP leads to the induction of limits in the

production, under the form of steps or quotas.

The impact of horticulture and agriculture on local conditions has to recognize,

as everywhere, economic rules and ecological needs to be supported by the industry.

Product information needs to be an integrated part to support quality, which will help

growers to and the trade and will guide consumers. The implementation of the HACCP

program in the packing – houses of Peloponnesus and Crete are in accordance with

other systems of Certification.

The application of agro-environmental measures introduced by the E.C. for an

Organic Citriculture is supported by many farmers (3 % of the whole surface).

Selected varieties of Oranges and Mandarins that mature during the summer

tourist period favor the development of Agro-Tourism activities in the small and great

islands of Aegean’s Sea (Crete, Chios, Kalymnos, Rhodes).

Recently, the Greek government developed a plan for the restructure of the

citrus sector. This plan will classify the planting areas based on the microclimate of each

region and the variety requirements of the market. In Crete -where are mostly small

growers and the temperature favours the sensitive species- there is a tendency to have

plantings of Citrons (Citrus medica), Lemons (Citrus limon) and the late varieties of

Tangerines like the Encore. This management plan is going encourage the farmers to

insert the new plantations in the regions of the Western Greece, like Thesprotia and

Messologi. The annual rainfall: 800 – 1000 mm and the fertile soils of these zones favors

the cultivation of citrus, which are replacing the cultivation of tobacco.

In these regions it is necessary to organize and apply an anti-frost system as in

certain years there have been noticed problems with frost. Concerning the

Peloponnesus, the region of Argolida presents a bigger frequency of frost.

The studies of the Bioclimatology of Citrus in Crete have made possible the

development of predictive models, which are focused on the institution of management

programs of plantations, in relation to the quality of fruits and the development of

different agro-systems of Agro–tourism. The grouping of the growers with the support

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of the European Union is evaluated like organizations that work for the reconstitution of

the old varieties in relation to an Integrated Management System.

The European sector of citrus production is mostly destined to the fresh market.

The products that are processed usually make a complementary income for the

producer. The several specific European Community (EC) laws and measurements as

well as the Common Agricultural Policy (CAP) control the development of the Greek

citrus sector.

The distribution channels of citrus in Greece have been delimitated in the

following four major groups:

Central Fruit and Vegetables Markets (CFVMs) - There are two such markets,

in Athens and in Thessaloniki, and their market share is estimated about 20-

25% of fruits and vegetables.

Wholesalers outside CFVMs - Such businesses purchase directly from local

producers and standardizing facilities or import from third countries and sell

to specialized retailer outlets and supermarkets, accounting for 35-40% of

the aggregate market fruits and vegetables.

Supermarket chains - They purchase either standardized quantities from

relevant facilities, wholesalers, or import from other countries. Lately, they

are also purchasing directly fresh produce from growers and standardize

these quantities at their own facilities. Their aggregate share is constantly

increasing (at the expense of wholesalers as well as specialized, small retail

outlets) and is estimated to around 20% of fruits and vegetables.

Direct sales in street-markets - Street markets have a long tradition in Greece.

Fresh fruit and vegetables are sold in such places directly from the producers,

with a total share of around 10-15% of fruits and vegetables.

4. Marking and Packaging

Multiple characteristics are taken into account in the process of packaging and

marking.

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a. Minimum size

Size is determined by the maximum diameter of the equatorial section of the

fruit. The following minimum sizes apply:

Figure 4.1: Fruit minimum diameter.

b. Uniformity

Citrus fruit may be sized by either of the following two options:

i. Option (a): To ensure uniformity in size:

The maximum difference in diameter between fruit in the same package shall be limited

to:

10 mm, if the diameter of the smallest fruit (as labeled) is < 60 mm

15 mm, if the diameter of the smallest fruit (as labeled) is 60 mm but < 80 mm

20 mm, if the diameter of the smallest fruit (as labeled) is 80 mm but < 110 mm

There is no limitation of difference in diameter for fruit 110 mm.

If by count, the fruit must meet the above-mentioned size uniformity.

ii. Option (b): When size codes are applied, the codes and ranges in the

following tables must be respected:

Figure 4.2: Size codes for Lemons

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Figure 4.3: Size codes for Limes, Mandarin varieties and Oranges

Uniformity in size is achieved by the above-mentioned size scales, unless

otherwise stated as follows:

For fruit in bulk bins and fruit in sales units of a maximum net weight of 5 kg, the

maximum difference must not exceed the range obtained by grouping three consecutive

sizes in the size scale.

A. Quality tolerances

"Extra" Class

A total tolerance of 5 per cent, by number or weight, of citrus fruit not satisfying

the requirements of the class but meeting those of Class I is allowed. Within this

tolerance not more than 0.5 per cent in total may consist of produce satisfying the

requirements of Class II quality.

Class I

A total tolerance of 10 per cent, by number or weight, of citrus fruit not satisfying

the requirements of the class but meeting those of Class II is allowed. Within this

tolerance not more than 1 per cent in total may consist of produce satisfying neither the

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requirements of Class II quality nor the minimum requirements, or of produce affected

by decay.

Class II

A total tolerance of 10 per cent, by number or weight, of citrus fruit satisfying

neither the requirements of the class nor the minimum requirements is allowed.

Within this tolerance not more than 2 per cent in total may consist of produce

affected by decay.

B. Size tolerances

For all classes and types of presentation: a total tolerance of 10 per cent, by

number or weight, of citrus fruit corresponding to the size immediately below and/or

above that (or those, in the case of the combination of three sizes) mentioned on the

package is allowed. In any case, the tolerance of 10 per cent applies only to fruit not

smaller than the following minima:

PROVISIONS CONCERNING PRESENTATION

A. Uniformity

The contents of each package must be uniform and contain only citrus fruit of the

same origin, variety or commercial type, quality, and size, and appreciably of the same

degree of ripeness and development.

In addition, for the "Extra" Class, uniformity in coloring is required. However, a

mixture of citrus fruit of different species may be packed together in a sales unit,

provided they are uniform in quality and, for each species concerned, in variety or

commercial type and origin.

The visible part of the contents of the package must be representative of the

entire contents. Presentation should not be misleading, i.e. concealing in the lower

layers of the package produce inferior in quality and size to that displayed and marked.

B. Packaging

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The citrus fruit must be packed in such a way as to protect the produce properly.

Packages must be of a quality, strength and characteristics to protect the fruit during

transport and handling.

The materials used inside the package must be clean and of a quality such as to

avoid causing any external or internal damage to the produce. The use of materials,

particularly of paper or stamps bearing trade specifications, is allowed provided the

printing or labelling has been done with non-toxic ink or glue.

Stickers individually affixed on the produce shall be such that, when removed,

they neither leave visible traces of glue, nor lead to skin defects. If the fruit are wrapped,

thin, dry, new and odorless paper must be used. The use of any substance tending to

modify the natural characteristics of the citrus fruit, especially in taste or smell, is

prohibited.

Packages must be free of all foreign matter. However, a presentation where a

short (not wooden) twig with some green leaves adheres to the fruit is allowed.

A visible lack of cleanliness in several packages could result in the produce being

rejected.

PROVISIONS CONCERNING MARKING

Each package must bear the following particulars, in letters grouped on the same

side legibly and indelibly marked, and visible from the outside. In the case of packed

produce, all particulars must be grouped on the same side of the package, either on a

label attached to or printed on the package with water-insoluble ink.

A. Identification

Packer and/or dispatcher/shipper:

Name and physical address (e.g. street/city/region/postal code and, if different

from the country of origin, the country) or a code mark officially recognized by the

national authority. For inspection purposes, the “packer” is the person or firm

responsible for the packaging of the produce (this does not mean the staff that actually

carry out the work, who are responsible only to their employer). The code mark is not a

trademark, but an official control system enabling the person or firm responsible for

packaging to be readily identified. The dispatcher and/or shipper may, assume sole

responsibility, in which case identification of the “packer” as defined above is optional.

B. Nature of produce

Common name of the species if the produce is not visible from the outside

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Name of the variety, for oranges

For the mandarins´ group:

Satsumas: “Satsumas”, which may be followed by the variety

Clementines: “Clementines”, which may be followed by the variety and,

where appropriate, by either the indication “seedless” for seedless clementines (no

seeds), clementines (1 to 10 seeds), or clementines “with seeds” for clementines with

more than 10 seeds

Other mandarins and their hybrids: name of the variety

For grapefruit and hybrids: the indication “pink” or “red” where appropriate

For pummelos and hybrids: the indication “pink” or “red” where appropriate

“Mixture of citrus fruit” or equivalent denomination, in case of sales units

containing a mixture of citrus fruit of different species. The names of the

different species shall appear in addition to the details listed above

“Seedless” (optional).

C. Origin of produce

- Country of origin and, optionally, district where grown, or national, regional or

local place name

- In the case of sales units containing a mixture of citrus fruit of different species

of different origins, the indication of each country of origin shall appear next to the

name of the species concerned.

Marking must include the country of origin, i.e. the country in which the citrus

fruit is grown (e.g. Israel, Spain, South Africa). Optionally, district of origin in national,

regional or local terms may also be shown.

D. Commercial specifications

Stating the class is compulsory.

Size expressed as: Minimum and maximum size (in mm) orvSize code(s)

followed, optionally, by a minimum and maximum size or Count.

Post-harvest treatment (optional, based on the national legislation of the

importing country).

E. Official control mark.

Genetically modified products

The Council of the European Union has recently issued a separate labelling

regulation for genetically modified foodstuffs. Genetically modified products are food

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products that are made with or are made of genetically modified organisms (GMO) and

according to the EU Regulation, genetically modified products have to be labelled as

such. This applies to modified foods, ingredients and materials which are used in the

production or processing of a food.

Quality controlGreece is a member of the ORGANISATION FOR ECONOMIC CO-OPERATION AND

DEVELOPMENT. The OECD is a unique forum where the governments of 31

democracies work together to address the economic, social and environmental

challenges of globalization. The OECD is also at the forefront of efforts to understand

and to help governments respond to new developments and concerns, such as

corporate governance, the information economy and the challenges of an ageing

population. The Organization provides a setting where governments can compare policy

experiences, seek answers to common problems, identify good practice and work to co-

ordinate domestic and international policies.

The other OECD member countries are: Australia, Austria, Belgium, Canada,

Chile, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland,

Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand,

Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the

United Kingdom and the United States. The Commission of the European Communities

takes part in the work of the OECD.

The purpose of the standard provided by OECD is to define the quality

requirements for citrus fruit at the export-control stage after preparation and

packaging.

However, if applied at stages following export, products may show in relation to

the requirements of the standard:

- a slight lack of freshness and turgidity

- for products graded in classes other than the “Extra” Class, a slight

deterioration due to their development and their tendency to perish.

The holder/seller of products may not display such products or offer them for

sale, or deliver or market them in any manner other than in conformity with this

standard. The holder shall be responsible for observing such conformity.

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Minimum requirements

In all classes, subject to the special provisions for each class and the tolerances

allowed, the citrus fruit must be:

- Intact - Means not having any mutilation or injury spoiling the integrity of the

fruit, such as cuts or punctures or other significant physical damage sustained during

harvesting or post-harvest handling.

- Free of bruising and/or extensive healed over cuts - The fruit must be practically

free of oleocellosis, bruises and / or extensive healed over cuts. (oleocellosis: or rind-oil

spotting. The result of impact or compression damages the skin and causes green or

brown discoloration.)

- Sound - produce affected by rotting or deterioration such as to make it unfit for

consumption is excluded. The fruit must be free from disease or serious deterioration

which appreciably affects its appearance, edibility, or market value. In particular, this

excludes produce affected by rotting, even if the signs are very slight but liable to make

the produce unfit for consumption upon arrival at its destination.

- Clean, practically free of any visible foreign matter - Citrus fruit must be

practically free of visible soil, dust, chemical residues or other visible foreign matter.

- Practically free from pests - Citrus fruit must be practically free from insects,

mites or any other pests. The present of pests can detract from the commercial

presentation and acceptance of the fruit.

- Free from damage caused by pests affecting the flesh - Citrus fruit must be free

from damage caused by insects, mites or any other pests that affects the fruit flesh. Pest

damage affecting the flesh makes the produce unfit for consumption.

- Free of signs of shriveling and dehydration - Damage caused by evaporation of

water from the fruit due to extreme temperature.

- Free of damage caused by low temperature or frost - Damage caused by frost

prior to harvest, or by chilling due to low temperature during storage or transportation.

- Free of abnormal external moisture - This provision applies to excessive

moisture, for example free water lying inside the package, but does not apply to

condensation on fruit following release from cold storage or refrigeration vehicle.

- Free of any foreign smell and/or taste - This refers particularly to citrus fruit

which have been stored on badly kept premises or have travelled in a badly maintained

vehicle, especially fruit which has acquired strong smell from other produce stored on

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the same premises or travelling in the same vehicle. It does not refer to any smell

emanating from products used in conformity with the regulations for their use to

improve keeping properties. For example, care should be taken to use only non-smelling

materials as protection in packaging.

The development and condition of the citrus fruit must be such as to enable

them:

- To withstand transport and handling

- To arrive in satisfactory condition at the place of destination. The state of

ripeness must allow the fruit to withstand transport and handling and to arrive in

satisfactory condition at the place of destination. The fruit must have reached an

appropriate degree of development and ripeness in accordance with criteria proper to

the variety and the area in which they are grown.

Maturity requirements

The citrus fruit must have reached an appropriate degree of development and

ripeness, account being taken of criteria proper to the variety, the time of picking and

the growing area.

Maturity of citrus fruit is defined by the following parameters specified for each

species below:

- Minimum juice content

- Minimum total soluble solids content (TSS), i.e. minimum sugar content

- Minimum sugar/acid ratio

- Coloring.

The degree of coloring shall be such that, following normal development the

citrus fruit reach the color typical of the variety at their destination point.

Color is a progressive parameter. The transport conveyance time and/or means

may be taken into consideration when inspecting fruit at the export or dispatch control

point. The degree of coloring shall be such that following normal progress of colour

change, the citrus fruit reach their normal variety color.

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Citrus fruit meeting these ripeness requirements may be “de-greened”. This

treatment is only permitted if the other natural organoleptic characteristics are not

modified.

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The minimum coloring prescribed by this standard may in some cases be

obtained at the dispatch stage by "de-greening". It should, however, be emphasized that

this practice should be applied only to remove the green color and obtain a uniform

color, without affecting any of the fruit's natural characteristics. Consequently:

Only fruit showing the required degree of development and ripeness may

be de-greened.

The operation must be performed in such a way that the fruit's intrinsic

characteristics are not at all affected.

Classification

Citrus fruit are classified in three classes, as defined below:

"Extra" Class

Citrus fruit in this class must be of superior quality. In shape, external

appearance, development and coloring they must be characteristic of the variety and/or

commercial type. They must be free from defects with the exception of very slight

superficial defects, provided these do not affect the general appearance of the produce,

the quality, the keeping quality and presentation in the package.

Class I

Citrus fruit in this class must be of good quality. They must be characteristic of

the variety and/or commercial type. General appearance of the produce, the quality, the

keeping quality and presentation in the package:

- A slight defect in shape

- Slight defects in coloring, including slight sunburn

- Slight progressive skin defects, provided they do not affect the flesh

- Slight skin defects occurring during the formation of the fruit, such as silver

scurfs, russets or pest damage

- Slight healed defects due to a mechanical cause such as hail damage, rubbing,

damage from handling

- Slight and partial detachment of the peel (or rind) for all fruit of the mandarin

group.

Class II

This class includes citrus fruit which do not qualify for inclusion in the higher

classes but satisfy the minimum requirements specified above. Citrus fruit in this class

must be of reasonable quality.

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The following defects may be allowed, provided the citrus fruit retain their

essential characteristics as regards the quality, the keeping quality and presentation:

- Defects in coloring, including sunburn progressive skin defects, provided they

do not affect the flesh skin defects occurring during the formation of the fruit, such as

silver scurfs, russets or pest damage healed defects due to a mechanical cause such as

hail damage, rubbing or damage from handling superficial healed skin alterations

- Rough skin - a slight and partial detachment of the peel (or rind) for oranges

and a partial detachment of the peel (or rind) for fruit of the mandarin group.

Transport and deliverySuccess in exporting citrus does not just depend on their quality, or the season.

Many first trials have not lead to repeat orders because of poorly defined or

misunderstood terms of delivery and payment. You will have to compete with Asian

exporters who are well organized. Buyers could ask for orders at the last moment but

be sure you can meet their request before you make a commitment. The biggest

challenge here is to be clear and gain trust, and frankly say to what extent you can

deliver the citrus in time.

Large importers usually request samples for deliveries by sea or air freight.

They may visit your company, especially if they already buy fresh citrus or other

fruit. They monitor beforehand whether you are able to supply dried mangoes that look

uniform and of a consistent quality. If it concerns supplies of dried mango cubes to e.g. a

cereal processor, a buyer will check whether you are able to supply large (uniform)

quantities throughout the year and if you can supply large quantities quickly on a

regular basis. If they approve your performance, they will usually ask you for an order.

Smaller importers

For smaller quantity supplies of citrus for the consumer market from landlocked

countries such as Mali and Burkina Faso, there are no clear rules. First, you could send

photos with the different stages of fruit ripening. Based on a (face-to-face or Skype)

discussion you can propose to send some samples e.g. 2 or 3 bags by express mail or by

a reliable courier who can handle food transport.

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To prevent lead time problems, the exporter should anticipate by clearly

estimating how much time it will take him to comply with order, as the importer will

immediately start ‘pre-selling’ the expected consignment.

Payment termsThe determination of payment conditions for a regular export transaction is part

of the package of negotiations between seller and buyer, who actually have more or less

opposing interests. The seller wants to have the largest possible guarantee of financial

coverage for the goods he has to supply according to his sales contracts. The buyer

wants to be sure about availability, quantity and quality of the goods he buys, before he

pays the agreed price. After deduction of the commission and expenses for handling,

transport etc., importers or agents generally transfer payment within 30 days. A Letter

of Credit is common practice, but is often considered cumbersome and prevents the

option of retaining the money if the consignment does not prove to be as good as

expected. When relations are established, cash against documents (CAD) is also a

method used. However, clean payments are the most commonly used payment method

in the fresh fruit and vegetable sector. After the sale is concluded, the importer can

determine the levy with the Customs, and pay a deposit. If the products are not

imported within two months after this has been done, the fixed levy is no longer valid

anymore and the importer loses his deposit. This means that on-time delivery is vitally

important. Another possibility for the importer is to pay the current levy at Customs

clearance.

General methods and terms of payment

Clean payment

The process is fast and reliable, depending on the credit worthiness of the

importer. The bank carries out the transactions through swift electronic data system

and the transfer costs are not very high.

Documents against payment (D/P)

Also known as cash against documents (CAD). The buyer takes possession of the

goods only after payment. Although this method is not very popular, it is very safe and

the costs amount to one pro mille. One can also make use of a ‘documents against

acceptance of a bill of exchange’. However, the bill of exchange is not commonly used in

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the European Union and it does not guarantee that the bill will be paid; it is less secure

than the D/P.

Letter of Credit (LC)

The irrevocable LC is very often used in the beginning of a business relationship

when the importer and exporter do not know each other very well yet. The LC is

irrevocable and will always be paid. The costs are higher when compared to the D/P

method, namely five pro mil. This method is widely used in the European Union when

dealing with exporters from outside Europe.

Bank guarantee

The buyer's bank will present a bank guarantee for the amount of the invoice.

Cheques

Bank guaranteed cheques are generally not a problem though cashing may take

some time, up to six weeks. Not all personal cheques are accepted.

Payment on consignment basis

Payment on consignment basis is mostly used in the trade of perishable

products, for example fresh fruit and vegetables. The products are sold at a

predetermined price after a mutually appointed arbitrary person (General Super

Intendance Company (GSC)) has controlled the quantity, quality and other aspects of

the products at the moment of acceptance/sale. If the products do not meet the

conditions as described in the contract, the contract is not valid and, depending on the

conditions of the contract, prices are generally adjusted. An open account is used to

make the payment after 14 days as from acceptance/sale.

It is recommended that quotations to European customers should be made on a

CIF basis. However, supplier and importer are free to negotiate and agree whether

quotations and subsequent trade are based on CIF or FOB prices.

Most common delivery terms:

• FOB (Free On Board): The buyer arranges for transportation and insurance.

FOB must specify the port of departure.

• CFR (Cost & Freight): The exporter pays the freight, the buyer arranges for

the insurance.

• CIF (Cost, Insurance & Freight): The exporter pays the freight and the

insurance.

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References

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