The business involves finding an exportable commodity,
networking with haulage companies and securing buyer contracts. The enterprise
is capital intensive depending on the scope and business model.
Agricultural export is a non-oil business that generates
billions of dollars worldwide. Many countries offer subventions and secondary
funding to boost the industry.
This is because such exports help the economy by increasing
the gross domestic product. Another derivative is increased foreign exchange,
job creation and diversification of the economy.
Benefits
of Starting an Agricultural Export Business
Apart from economic diversity, exportation is highly
profitable. It creates employment for farmers and haulage companies. Other benefits
include access to foreign currency and reduced post harvest issues.
What
Type of Agro Produce to Export?
Climatic conditions, geographical location, mechanization
and soil composition impacts on the type of agriculture practiced in each
country. Every country has something to offer the international market.
Common Agro products traded include ginger, kola, bitter
kola, rice, groundnuts and cashew. Others are fruits, garlic, cocoa, spices,
gum Arabic, shrimps and vegetables.
More agricultural products suitable for exports are
prawns, beans, plantain flour, ground melon, sugarcane, shea butter and
mangoes. The commodity you choose depends on abundance, price and government
regulations.
You need adequate startup funding, knowledge of the niche
and effective marketing strategy.
- Ginger
- Kola
- Bitter kola
- Rice
- Groundnuts
- Cashew
- Fruits
- Garlic
- Cocoa
- Spices
- Gum Arabic
- Shrimps
- Vegetables
- Prawns
- Beans
- plantain flour
- Ground melon
- Sugarcane
- Shea butter
- Mangoes
Items Unsuitable for
Export
There
are a few commodities that attract fair prices domestically that are not good
for export. Other reasons are too many contaminants and restrictions such as
deforestation or endangered specie.
Such
commodities are local artifacts, timber, maize, and antiquities. Others are
scrap-metal, raw hide, endangered wild life and unprocessed leather.
- Local artifacts
- Timber
- Maize
- Antiquities
- Scrap metal
- Raw hide
- Endangered wild life
- Unprocessed leather.
How to Start
Agricultural Export Business
To
start your agricultural export business you need to write a business plan. Then
carry out a feasibility study to determine what to export.
Find
farmers and suppliers of the produce and determine startup funding. Understand
the business requirements, availability of product and growth season.
You
need to secure export contract from reputable foreign companies and a letter of
credit. More things to consider include method of processing, packaging,
transportation and shipping.
It
is important learning the trade and hiring/ consulting professionals in your
commodity of choice.
- Write a business plan
- Carry out a feasibility study
- Choose a niche
- Incorporate the company
- Secure funding
- Find foreign partners
- Network with farmers and haulage companies
- Apply proper packaging and labeling
- Get appropriate documentation
Licensing and
Registration
Register
your export business as a limited liability company. You need an export license
and trade license.
Visit
your countries national export promotion council for guidelines. In some
countries you need to join a federal export association. You need insurance
cover and tax identification number.
Agro Export Contract
Sourcing
The
most important aspect of export business is finding legitimate buyers. You can
start your search through online resources.
Use
keyword search and visit export promotion council websites of markets of
interest. Use online directories, chamber of commerce and trade brokers.
Get
referrals from export agents and export consulting firms. Visit lots of international
trade fairs and seek assistance from friends and family.
Funding the Business
You
need financial loans to purchase, package and ship. Other fund requirements are
office equipment, leasehold, staff wages and transportation.
You
can approach financial institutions such as agricultural or commercial banks in
your locality. You could try partnership arrangement or find a core investor.
You
could sell equity in the business or borrow from friends and family. Make sure
the agricultural product is high quality without any contaminants.
Apply
proper packaging and labeling to avoid rejection. Before exporting the commodity
it should pass strict testing and sampling.
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