You’re probably reading this because you’re interested in dipping your toes into the agricultural produce marketplace, or maybe you want to start importing or exporting agricultural produce to international markets.
If that’s you, then You’re in the right place. In this simple overview, we will cover both sides of importing and exporting agricultural products, for those just starting out in the International B2B wholesale market.
Benefits of Importing / Exporting Agricultural Produce
Importing and exporting agricultural produce is not just beneficial to individual businesses, the economies of entire countries are built on GDP derived from agricultural imports and exports. The following are some of the most notable benefits of agricultural imports and exports.
- Selling to an international market helps to achieve economies of scale and higher profitability by spreading costs over a larger customer base. Ultimately, your business becomes more efficient as you sell to more people and experience increased cash flow to improve operations. Economies of scale also leads to lower prices for consumers in the long run due to increased competition between local businesses and international brands.
- Minimising seasonal fluctuations and loss of demand for what you are importing /exporting. Agricultural cycles vary across different geographical The implication of this is that while certain products may be low in demand locally due to local surplus, they might be heavily needed elsewhere in the world. In fact, many producers have been known to produce crops specifically for other countries where demand is higher to meet their own domestic consumer needs
- With the right strategy, you can increase your competitiveness in the global marketplace. For instance, the knowledge and experience you gain from exporting to one country can be applied to other regions of the world to solidify your stake in the international produce market.
We live in a world where most transactions are now done online. On top of that, selling globally is easier than ever. According to a World Bank report, Global Economic Prospects, trade in goods and services is likely to more than triple by 2030.
Let’s dive right in on information about starting within importing and exporting in the agricultural produce industry…
Did you know: According to the U.S. Department of Commerce, within the import/export industry, the ‘big guys’ make up only about 4 % of all exporters. This means that the other 96% of exporters are ‘small Businesses’!
Exporting is the selling of goods and services from your country to a foreign country. The International Trade Administration provides tools, assistance, and expert knowledge to help your company grow in the global marketplace.
Importing on the other hand involves purchasing foreign products and bringing them into your country to be sold locally. Each country has its own government website with up-to-date information on the current import regulations. (Keep reading for useful links)
One of the great things if you decide to import or export internationally, is that you aren’t limited to regional or seasonal produce. The world is literally your oyster (or grain)!
TIP: Do your homework and research the market beforehand to locate the best potential foreign market for your product or service.
Getting Started- Steps to Follow
Gone are the days when the import and export of agricultural produce used to be an exclusive reserve of large corporations. These days, small businesses that know how to take advantage of the edge that technology provides can now sell internationally. you just need to know the steps to follow and how to get started.
1. Identify The Produce You Want To Import Or Export
First, you’ll need to identify what agricultural produce you want to import or export. Once you have done this you should ask yourself the following questions;
- Do you / your company have the capacity to sell the product in foreign markets outside of your home country?
- Do you have sufficient staff, time, financial and legal resources to support the trading process?
- Is your produce already successful within your domestic market or in other target countries?
You can either select one or two niche products (e.g. specially curated honey or exotic fruits), or decide on a wide range of products to widen your market reach
2. Apply For A License
Once you have found what you are interested in, you will need to apply for the correct licence from the country’s registered customs administration before you can start exporting/importing any goods or type of produce. Without this, you will not be able to get through the customs clearance.
Tip: This process can take some time so apply well ahead.
You will need to identify the right market for it. After all, you need customers to sell to.
ProduceMart can support you in identifying suitable markets for your produce by giving you access to a farmers B2B platform filled with registered proactive buyers, who are able to view and access your specific produce, with the option to directly make contact.
- Find a supplier on the ProduceMart agriculture marketplace
- Check import conditions, duties, and ensure the produce complies with your country’s requirements
- Find out the commodity code for your produce
- Check the labelling, marking, and marketing rules
- Complete transaction and ship to your local Sea or Airport
- Prepare documents to clear customs
Getting an Import Licence
An import licence allows you to import a number of goods into your home country within a set amount of time. The details of the time limits are set out on the licence. Any import duty you have to pay will depend on rates in force on the day that you place the goods under the local or international customs control.
Here’s an example of what documents you would need to import from outside the EU into the EU;
- Ensure the availability of the Entry Summary Declaration
- Import customs clearance (commercial invoice, transport documents, certificate of origin (such as Form A, Eur.1/Eur.Med REX communication issued by a registered exporter or origin declaration issued by an authorised exporter), import licence, test results, inspection certificates (such as health, veterinary or plant-health certificates)
- Complete and submit the import declaration/Single Administrative Document (SAD)
How to select your markets of supply?
Screen potential import markets to assess whether there is a current supply of your chosen produce
Which import or marketing rules apply to your imported product?
Certain agricultural produce coming from specific countries may be prohibited or restricted. Usually in this case you will need specific permits, a licence or present an officially approved import document.
Which import tariffs apply to your product?
Upon entering the country, import tariffs may need to be paid for the produce. Often import duties are paid by the importer.
What documents do I need to prepare for customs?
You’ll need to provide a customs declaration to your national customs authority. You may want to speak to a customs representative, as it’s super important.
- List your products on the Producemart.com crop marketplace for buyers to find
- Check export conditions in your country and import requirements in your target market
- Prepare the sale
- Prepare the documents for export clearance in your country
- Prepare the documents for customs clearance in your export market.
Getting an Export Licence
To export more than a certain amount of some commodities, you will need a standard export licence. Each country will have their own trade tariffs and official government organisations that will tell you how much of a given commodity you can export without a licence.
Are there any restrictions when exporting agricultural produce?
Check that the country you are exporting to doesn’t have any prohibitions or restrictions on your produce. Usually, your buyer will take responsibility for the import, including the use or marketing of the product. But for an easier and more sustainable transaction, we would recommend being aware of any import regulations that may affect the transaction.
Which tariffs will be applied to the produce?
A tariff is a customs duty or tax on imported produce. It will vary based on the export country and the agreed terms with the buyer. In most cases, we recommend leaving the import clearance to the buyer, who pays the customs duties, taxes and additional duties at the import stage.
Can I benefit from a preferential Trade Agreement between my country and the country of destination?
If there is a trade agreement with the country of destination, tariffs on your product may be reduced or even completely removed. These customs duties are called preferential tariff rates.
Who can help you in the export and transport process?
A forwarding agent can help with arranging the collection and delivery of your goods, negotiating freight rates with carriers, booking cargo space, packing, insurance, and preparing customs documents on your behalf.
Buyers are (usually) responsible for organising;
- transport from the port of shipment onwards
- unloading produce
- transportation from the arrival port to the final destination.
Example: To export goods and produce from Australia you will need something called an Australian General Export Licence (AUSGELs). This Export Licences (AUSGELs) are broad permits for pre-approved activities. A single AUSGEL can permit you to supply goods to specific destinations and purposes for a five-year duration, or longer if required.
It’s common knowledge that traditionally, if you are importing or exporting agricultural products you may go through up to 5 or 6 different middlemen before you actually reach the end customer. It can become tedious, costly, and quality can be reduced through this old school process.
Just like the food and beverage industry, the B2B agriculture industry is taking strides to remove the middlemen and directly pass that profit margin on to the producer, farmers, buyers, food manufacturers, aggregators etc.
The team at ProduceMart understands the importance of quality and fairness, we offer you the ability to effortlessly import and export agricultural products, wholesale via our agri ecommerce platform. Although it is not our responsibility to issue, supply, or check import/export licenses (keep reading to find more information about this), we have implemented multiple checking points to ensure transparency, effective communication, and secure transactions.
It is important to make sure you are up to date with all the latest legislations when importing/exporting agricultural products overseas. It’s common knowledge that the laws and regulations can change regularly. Therefore it can be extremely difficult to navigate through the intricate international import/export legal systems. We strongly advise hiring a professional or carrying out as much research on government-registered web pages.
But don’t all of these scare you.m Many businesses do this successfully on a daily basis. Importing or exporting B2B agriculture produce outside of your domestic market can have a tremendous impact on your business such as cost reduction, increasing profits, or minimizing risks by diversifying the market presence.
National & International Shipping Methods
Congratulations – you have finally got to this point! The sale has gone through and you need to ship your produce.
When it comes to sending your produce you have a few different options; train/rail, sea, trucking, air freight and express. Depending on where it is going, it might need multiple modes of transport.
The way and how you deliver the produce will depend on size, cost, and the time that the produce needs to be sent in.
If your buyer is in the same region, trucking may be the best option. However, if you are exporting overseas, shipping by air freight and sea freight might be your only option.
TIP: Some regions of the world like Europe have credits or certifications based on your total carbon emissions – not only in how your produce is manufactured but the method of transportation. This is something to consider when looking at how you transport your produce.
Next, you should consider if you need the assistance of a broker or freight forwarder. Many countries require an export declaration.
TIP: The United States + Canada have a free government website to file this declaration form.
However, in many other areas of the world, professional advice might be needed.
The correct paperwork requires the goods to be classified with a Harmonized Tariff code, which allows customs to track what is being exported. E.g. fresh vegetables and frozen vegetables are assigned two different tariff codes.
Your freight forwarder or broker will be able to help with all the different classifications. In countries like Mexico that have export taxes and duties, the declaration will help customs assess the fees.
(These companies can also secure better rates with truck, rail, air, and sea carriers!)
If you do decide to go solo! Remember: Every export will become an import. All customs authorities at the time of export and import ask three questions:
What is the product?
What is the product’s value?
Where was the product made?
Every international shipment requires a commercial invoice that tells customs what is occurring in each transaction. Your commercial invoice needs to fully answer those three questions and also state in detail all the parties involved in the transaction.
Some transactions may require additional paperwork such as a Certificate of Origin, a document from a Chamber of Commerce that certifies where your goods came from. This document is used at the time of import but is best to get this before export.
At the time of export, please be aware of any trade restrictions that may apply to your product internationally. These restrictions may require additional documentation.
Documentation is a vital part of international trade that you cannot afford to mix up. Omissions or documentation discrepancies can affect your export in various ways. It may cause delays, non-payment, or even complete seizure of the goods by customs officials.
Generally, the number and types of documents you will be required to submit will depend on the destination the product is being shipped to. As an exporter, you’ll have to find out all about the documents that will be needed to clear the shipment when it arrives in the other country.
Some countries may even have special documents in addition to the commonly-used ones. These documents only apply to certain types of products or show compliance with specific standards. It’s best to work with the importer on this to ensure you’re aware of the up-to-date requirements in the destination country.
Some of the common documents that may be required include
1. A commercial invoice
A commercial invoice is often requested in the buyer’s country at the point of clearing the produce. This document details the import duties and taxes that have been paid on the product that is being imported. The document needs to be completed in a specific way. How this is done depends on the requirements of the customs authorities in the receiving country. Some countries are more relaxed with their requirements. You can submit the document in any form as long as it contains the most essential information. You should consult a reliable source for the specific requirements for the destination country before filling out this form.
2. Certificate of Origin
The Certificates of origin (COO) is a document that confirms that goods in a shipment are wholly obtained, produced, or processed in their country of origin. This document may be requested by the buyer or even by the customs authorities in the country of importation.
There are two main types of certificates of origin. It can be generic (non-preferential), which means the goods do not qualify for any preferential treatment in the country of importation. The second type is issued for goods that qualify for specific incentives in the receiving country, such as preferential tariffs due to a free trade agreement between the two countries.
In addition to these two, several other documents may be required when goods are being shipped abroad. Some of these documents include:
- Bill of lading-this serves as proof of shipment
- Packing list – which serves as proof of packing
- Inspection certificate- this document certifies the quality of the produce
- Insurance certificate – which serves as proof that it is insured.
- Weight certificate- this confirms the gross weight of a product
You should look up these documents and others that might be required during the shipping process. This helps to avoid unnecessary delays and other issues during clearance with the customs authority.
Import and Export – Useful links, documents and general information
The World Trade Organisation have something called – The General Agreement on Tariffs and Trade (GATT) which covers international trade in goods. The original GATT did apply to agricultural trade but contained lots of loopholes. For example, it allowed countries to use some non-tariff measures such as import quotas and subsidising agricultural trade became highly distorted, especially with the use of export subsidies which would not normally have been allowed for industrial products
Fortunately, that has now changed. The objective of the new Agriculture Agreement is to reform trade in the sector and to make policies more market-oriented. This is to improve agricultural predictability and security for both importing and exporting countries.
The new rules and commitments apply to:
- Market access — various trade restrictions confronting imports
- Domestic support — subsidies and other programmes, including those that raise or guarantee farmgate prices and farmers’ incomes
- Export subsidies and other methods used to make exports artificially competitive.
https://oec.world/en/home-a (Import / Export World Trade Data)
For many, the market for importing and exporting agricultural produce is very complex and the advantages and requirements associated with the numerous certification programmes are not always clear. With a bit of research and strategy, gaining access to domestic and international markets is extremely beneficial for businesses of any size.
While ProduceMart hopes this has scratched the surface of “A Beginners Guide to Import / Export” it’s not intended to be a substitute for expertise.
We would recommend thorough research, reading and getting yourself familiar with the different organisations, regulations and institutions.