Supply Chain & Export
working capital gap in the coffee trade is real and serious
B
the coffee exports are usually the 60-90-day trekking date. Which means that if we're on a plane in January, the payments just started in March-April. While production and shipping costs should pay almost instantly.
To close that gap, there's a Letter of Credit option but it costs 1 -3% of the transaction value, not to mention bank administration costs. When the margins are thin, the cost of L / C is significant.
Credit access to operatives in Indonesia with real bank interest is also not easy. A small cooperative interest can be at 12-18% per year based on Indonesian Bank data for micro segments.
The pre-final of the buyer is the solution of the specialty market, but not all buyer wants and not all sellers can negotiate it. Any experience of ever navigating this problem?
To close that gap, there's a Letter of Credit option but it costs 1 -3% of the transaction value, not to mention bank administration costs. When the margins are thin, the cost of L / C is significant.
Credit access to operatives in Indonesia with real bank interest is also not easy. A small cooperative interest can be at 12-18% per year based on Indonesian Bank data for micro segments.
The pre-final of the buyer is the solution of the specialty market, but not all buyer wants and not all sellers can negotiate it. Any experience of ever navigating this problem?
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