Necessary Information to Have Available Before Calling A Supplier

For the buyer of U.S. soybeans or soybean products, there are several factors that must be considered before a purchase contract can be initiated.

Communication
Usually sellers have difficulty starting the trade process because there is not enough information about the buyer. Before contacting a potential U.S. supplier, please have the following information available.

1. Contact Information (name/title/business/country/address/phone/fax/e-mail)
2. Type of buyer (examples: merchandising company, broker, feed manufacturer, industrial further processor, government buying agency, etc.)
3. Quantity (specific metric ton requirement)
4. Quality and specifications desired (be specific)
5. Shipment details (FOB, CIF, port of shipment/destination, etc.)
6. Date bids due and delivery (shipment) period
7. Financing/credit considerations (examples: user of U.S. government credit programs, private financing, specific financial needs)
8. U.S. and international bank references

Contract Negotiations
Prepare a draft proforma contract and send it to the intended supplier. Often the first draft sets the tone for trade negotiation. This draft will challenge the purchaser to examine and quantify knowledge of the current market. It represents a good format from which to ask and answer questions. For example, if the purchaser is unsure of the minimum amount required to ship economically, put the requirement into the performa and then ask the supplier.

Trade Finance
Payment is of critical importance to all international business transactions. How a payment will be handled is often the first question asked. The most common payment option is the Letter of Credit. Though it exists in several forms, the LC should set a time limit for completion and specify exactly the documents necessary to fulfill the terms of credit. A very common payment term required by many exporters is for the LC to be advised to and confirmed by a "first class U.S. or Western European bank acceptable to the seller." Other purchasing terms including credit terms are available to companies wishing to purchase U.S. soybeans or soybean products. These should be worked out in conjunction with the exporter, or through special financing programs available through local or U.S. banks.

The importance of good trade relations cannot be overemphasized. Most obstacles to trading flow are caused by poor communication and lack of effort in follow-up. It is important to view each trade with a long-term outlook and build enough trading flexibility into the operations to overcome obstacles. This flexibility will result in successful trade.