How to be a Rice Exporter?

I'm going to talk about payment and payment terms when it comes to rice exports let's assume for example the destination country is Singapore okay now firstly as a exporter you would as a supplier or an exporter you would always love to get some advance right but please understand friends it is not that easy why should a buyer give advance to a seller whom he doesn't know at all what if a buyer gives you an advance and you then you don't make shipment at all so it's also a risk for a buyer right so it's the same way for both parties so both parties want to safeguard each other so let's take an example of payment terms now one of the payment terms is called C ad cash against documents or it's called DP documents at site what this means is you make a deal with the buyer say for example you say $500 per ton so now Missouri rice you're going to supply to him delivery to him right now CIF means cost of insurance and freight which means you are giving your Singapore delivery price right or it's called also called CF are ie means there's insurance involved which is very uh nominal fee that you would so now payment terms is catch against documents or DP which means that you have to make prepare the rice packing and everything packet loaded to a truck or container ship it to the port from the pole once it loads onto the vessel you get a beer copy bill of lading right with these documents and your image and all the documents you are going to submit these documents to the bank and you tell instruct the bank with the covering letter saying that please send it to our buyers Bank you will have to take by your buyers bank details and you have to send it to your buyers bank and then the buyers bank will first make the payment to you and then release the documents make sure guys know one thing that in this trade of export the document is very important the document is a very important tool for payment a buyer cannot release the containers at this destination country without these documents in original he needs the original documents in hand to release your container which means that if the documents is still with you that means you still have the custody of the goods there it is in the ship traveling to Singapore so there is another way where what you can also do is some buyers might tell you make the shipment scan the copy to me and send it by email I will make the payment to you and then you can courier the documents to me so that's also an option so first scan and send it to talk to your customer then the customer will make payment once you see the payment in your bank not go do not go by the payment advice whatever the payment advice is you have to better wait till the payment hits onto your bank once you see it in your bank only then release the documents because you there can be a lot of fake payment advices that can be shared but for your safety friends first see the payment that comes is deposited to your bank and then release the documents to your fire now what are all the documents I am making a very specific video which is in the coming videos on documentation I will exactly tell you what or the normal documentation that goes into an export but otherwise one payment that we have covered is CA D cash again documents or D P the other payment term can be advanced 100% advanced and things like that it can be a normal TT which is again the same you make a shipment scan the copy get the TT as payment and then you courier the document ID to the customer the third option is LC one is an LC a letter of credit be careful guys less letter of credit is also a very tricky instrument a letter of credit LC have to be from a very reputed bank so firstly if your buyer is telling you that he is giving you an LC you need to ask him one thing from which bank is he going to give because if he says for example he's going to give you a LC from say for example Development Bank of Singapore or Maybank or UOB any bank in Singapore for example you will have to check with your bank whether your bank has a correspondence with the with this foreign bank only if your bank says it has a correspondence only then your bank will be able to you know confirm or go ahead with the LC otherwise even if your customer use your LC your bank will say I cannot process this LC so first check that secondly order you to check in the buyer it has to be a confirmed LC and irrevocable LC meaning it has to be a confirmed LC and it has to be a revocable meaning once the customer use it and see he cannot withdraw the LC because once he gives the LC to you you will prepare the shipment by the time you are preparing the shipment he withdraws the LC then you will be under a lot of trouble right so it has to be a confirmed LC revocable LC so from a reputed bank confirmed LC irrevocable LC now the main and forth and the main thing is LC also has terms whether it is a site LC whether it is a yusin's LC what does news ons and site means site LC means it is something like documents against payment wherein you ship the goods you get the documents you view the documents to your bank your documents from the bank you sent to the buyers bank you buyer signs it off and the buyer banks makes the payment to you and you get the payment that is a site LC meaning you prepare document and you get the payment once you have dropped out your bank processor it yusin's means it is a number of days when it comes to use ons LC then there is number of days involved 30 days 45 days 60 days 90 days based on whatever you are buyer and you confirm the deal with so if it is 30 days what this means is that it is going to be an LLC you're going to ship the goods your bank is once in the documents to the buyer bank the buyer bank is going to release the documents to the customer but the bank gives you a guarantee the file foreign buying user guarantee that all exactly on 30 days the buyers bank is going to make payment to your your bank on 30 days so it's going to it is an LC it's confirmed but it's going to come to you after 30 days or whatever terms LC uses 30 60 90 whatever is discussed here one more important point friends because it's an LC it's a confirmed payment but it is going to come you only have to come to India for 30 days so what you can also do is that you can talk to your bank the bank because it is an assured payment the bank would will dis can discount the LC and give it to you a major part of the money in everyone's to you after you purchase I'm in the documents also a more point important guys when you get you don't get the money your payment as an su you submit to the bank your bank has to again prepare the set of documents and send it to the buyer bank for example the buyer is in Singapore it takes two to three days for the document to reach Singapore Bank the buyer has to come to the bank to sign the documents only then the payment is released so it's not that you would give your document when you get the payment it still takes about might be a week still for your payment because the document is tribal he has to sign it off and then come to you right so this is all about elsif and the last payment term is da which is correct documents against acceptance this is a basically a credit payment terms if a customer says credit then it's going to be da in again da if there are several other terms B as in da can be that because any documents against payment you take the payment first and release documents later in da you don't be wait for the payment because it is a credit transaction you make the shipment you give the documents of the buyer because you would have taken an insurance from ECG C and then what you do is based on 30 days of 45 cities whatever payment terms you have given you you have already given and then you get the payment and then you get it you are when you get the payment after 30 to 60 days this is a great transaction so you make shipment you send the documents also you don't care for the payment at this point because it is a credit transaction and the payment comes of the 30 days that is when you realize in your bank account so you make sure your you have covered with insurance. 

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