Sunday, 5 July 2020

WHAT IS THE EXPORTABLE QUANTITY OF THE COMMODITIES YOU INTEND TO EXPORT?

Exportable quantity of a commodity simply means the least quantity of the commodity that one will be able to send to an oversea buyer. Are you one of the many who have attended at least one export seminar in the past and was super excited as various exportable commodities from Nigeria were listed? Did you see yourself as an exporter of one of those commodities and start to immediately scheme on how to take over that space?

One of the questions we ask every intending exporter is if the commodity or product they plan to export is available in commercial quantity. We go a step further to ask if they know the production figures of that product/commodity in their locality and country. Many people have signed contracts with foreign buyers only to discover while sourcing for the commodity /product that it is very scarce.

The downside of this is that most times, a contract contains a default and penalty clause which penalizes the supplier in monetary terms if he does not meet up with the terms of the contract- which in this case is quantity signed. The good news however is that knowledge of the available quantity relative to demand informs the production pattern of that commodity or product going forward. Proper arrangements can be made for increased cultivation or production as the case may be.

Commercial quantity most times is at least 17metric tonnes (17,000kg) or 16,000- 17,000 litres (for liquid contents); this would fill a 20ft container which is usually the test shipment size that most buyers would require if the cargo is travelling by sea. For cargo that is travelling by air, the quantity is much lower- most boxes are packaged as 25kg which most times serves as a sample order. One of the many benefits of commercial quantity is reduced costs due to economies of scale; another benefit is repeat business because the commodity is readily available for export.

Don’t be too quick to take on a contract before confirming that the product is available in commercial quantity. Conduct your research, be sure of the supply base, adopt measures to increase production before embarking on that journey so that you can run a sustained export business.

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