How you can benefit from International Trade Week
The Department for International Trade (DIT) has announced its first International Trade Week. Figures show that businesses that export are more productive and pay their staff more. The events are designed to help existing traders as much as 90 per cent of businesses that don’t yet export.
Between the 15th and 19th of November, there will be events across the UK raising participation and creating momentum. Existing traders can also find long-term support that might have eluded them so far, as the events will be hosted by expert trade advisors, parliamentarians and ministers.
“There has never been a more important time to talk trade, for businesses to embrace it,” said CBI international director Andy Burwell, “the International Trade Week must be a launchpad to get our nation exporting.”
Meanwhile, as part of Europe Trade Month, there’s an event on November the 9th to answer questions troubling exporters. Such as: How can you develop your exports to France and be compliant with the French Market?
Nik Haidar, founder of Quatre23 Consulting, will reveal the four changes needed before your faire un tabac rather than avoir le cafard in the French Market. Many British traders are completely at odds with French business culture, say the organisers, and it would help to be more aware of the differences in British and French formalities. British traders must learn not to expect to close the deal by the time the hors d’oeuvres arrive.
On the regulations side, Myriam Crolard, the Senior Consultant Customer Experience at CXB HUB, will demystify regulations around VAT and EORI. Meanwhile, after Brexit, the French and British are diverging over issues like transports, customs and logistics. This is a problem that Philippe Talon, CEO of AFC and Loïc Chavaroche, the Chief Brexit at the Sterne Group intend to resolve for the trading tout à fait.
Learn your Incoterms or you will be the weakest link in the supply chain
Exporters have been warned to expect Incoterms to make headlines when ‘delayed declarations’ on EU imports end and there are delays at customs. The Institute of Export and International Trade (IOT&IT) is pleading with traders to make sure Incoterms-related delays are not caused by them.
From January 1st 2022, import declarations must be completed for all imports entering Britain from the EU. There will be no more allowances by customs inspectors. The relaxation of rules, which allowed confused traders to delay declarations at the point of entry and gave them six months to document goods entering Britain, will end in six weeks.
Importers must prepare now to make instant Incoterms declarations and must brief their EU suppliers in readiness for the change. This stern warning about new import rules in the new year came from Kevin Shakespeare, the Academy Director for the IOE&IT.
Unless all parties in a goods movement are prepared, “something could go wrong in the supply chain,” said Shakespeare.“Importers and exporters need to agree their Incoterms because they will become fundamental,” said Shakespeare.
With the festive season looming traders have little time to become fluent in Incoterminology.
International Commercial Terms (Incoterms) are a globally-recognised series of trade terms that set out the responsibilities of both parties in a contract of sale involving the carriage of goods: the Buyer and The Seller.
There are 11 Incoterms that establish who is responsible for transport costs and insurance, who handles customs formalities for the goods movement, where goods are picked up from and transported to and who bears the risk in case of loss or damage at each stage of the journey.
The IOT&IT runs training courses to get traders - and by extension their supply chain - up to speed. There’s an Introduction to Incoterms course on Thursday 11 November. Try also the International Chamber of Commerce (ICC).
Covid nearly choked the tea business with rising costs – until government agents stepped in
Manchester-based Union Papertech (UP) is the sort of eco-friendly export business that Britain needs to back up its climate commitments. When Covid drove up its costs it got help from the government, and its commitment to sustainability opened the door to financial support.
UP creates paper tea bags for Tetley and Typhoo and helps Jacobs Douwe Egberts and Celestial Seasoning to be greener. It exports half its products to Europe, the USA and the rest of the world.
When Covid broke out UP struggled with tough shipping conditions as container freight rates surged. With unprecedented transport costs causing cash flow problems it began a search for funding.
The exporter might have been a Covid fatality if it hadn’t been for the support from the DIT, which helped Union Papertech to receive £720,000, of which £576,000 was a loan guaranteed by the government with the rest coming from an emboldened Natwest.
The scheme that helped UP is a General Export Facility (GEF), a UKEF initiative specifically designed to give UK businesses access to funds to cover the costs of international trade. GEF support offers financial flexibility and UKEF can expand this offering as demand increases outside of the UK market.
With the new funding, UP is developing more sustainable coffee and teabags for the domestic market and for increasing keen American and European brands. It has won two further contracts in India with a combined value of $1m a year.
“The pandemic presented a huge challenge for us. Fortunately, UKEF support played an instrumental role, allowing us to pursue new export contracts and expand our work in producing biodegradable paper,” said Stephen Todd, Union Papertech’s finance director.
Sustainability seemed to be the phrase that opens the doors to finance. “UKEF’s mission is to enable and empower British companies to realise their exporting potential,” said Andy Mannix, UKEF’s export finance manager, “increasingly, this mission is focused on empowering businesses that can make a difference with sustainable goods.”
UKEF recently expanded, adding four new regional country heads: Jesse McDougall in the USA, Mohammed Saad in Egypt, Valentino Dass in Malaysia and Tim Meaney is Country Head for the Philippines. Each promises ‘decades of experience in finance and business development’ and vital local knowledge in markets throughout the world.
Armenia out: Uzbekistan in. What’s that mean in the General Scheme of Preferences?
The Department for International Trade (DIT) has announced two key changes in the way it supports traders who wish to deal with developing nations. The Secretary of State for International Trade has decided to admit Uzbekistan to the UK’s Enhanced Framework. However, from 1 January 2022, Armenia will be removed from the UK’s Generalised Scheme of Preferences.
Having met the criteria of the framework central Asian Uzbekistan is now being addressed by a UK aid strategy whose ‘overarching UK objectives in Central Asia to reduce conflict, promote good governance reforms and build resilience,’ according to the government’s Central Asia Programme Summary document.
It belongs to a group of countries collectively known as the CARS (The Central Asian Republics) namely Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. These are described as 'strategically important and resource-rich' so there are opportunities for a select few with the right specialised skills in mining and engineering. This ‘potentially unstable and landlocked region’ is sandwiched between Russia, which sees them as lying within its sphere of influence, and China, which has invested heavily in the region challenging Russia’s claim to primacy.
The top Uzbekistan exports are gold, petroleum gas, non-retail pure cotton yarn, refined copper and ethylene polymers. Britain imports $2.39 billion worth of goods, making it Uzbek’s second-biggest customer. Uzbekistan’s main demand is for vehicle parts, packaged medicaments, refined petroleum, cars, planes, helicopters and spacecraft. Its top import suppliers are neighbouring countries, Russia, China and Afghanistan.
The General Scheme of Preferences rules that British businesses can get a reduced rate of Customs Duty (AKA a tariff preference or preferential rate of duty) for these goods. The government provides a tariff calculation tool on the DIT website.
“Make sure you import with the right commodity code, check they meet the rules of origin, and get proof of their origin,” advises the government.
How COP26 could finance British exporters into new markets
The Department for International Trade (DIT) used the COP26 conference in Glasgow to showcase ‘the global reach of excellence in the UK’ urging businesses to sell sustainable futures.
Green trade is set to be worth £1.8 trillion by 2030, delivering up to £170 billion of export sales in goods and services for the UK by 2030, the DIT says. Facilities such as UKEF help to create a £50 billion capacity to support UK exports.
In recent years, funding has helped UK businesses win export contracts in 81 countries, developing wind farms, solar-powered clean drinking water and sustainable transport. Export markets include including Spain, Taiwan, Dubai and Ghana. This gas helped support 64,000 jobs each year since 2018.
Lancaster-based wind farm supplier First Subsea, offshore engineering company ODE Group and clean water provider Aqua Africa have all won export contracts with DIT support.
Half of the multi-billion pound business development pipeline of deals is created by government funding of ‘clean and green’ exporters, according to UKEF, which is seeking to connect UK suppliers with international projects.
UKEF was one of many international Export Credit Agencies on the UK Pavilion at the COP26 climate conference, which had an unreported function as a trade show for UK exporters.
“As the world becomes greener, there are huge opportunities for businesses across the UK to be at the forefront of a sustainable future,” said International Trade Secretary and UK International Champion on Adaptation and Resilience for the COP26 Presidency, Anne-Marie Trevelyan.
UK Export Finance has a £2 billion lending facility to support small to medium-sized exporters.
“I would encourage other businesses to take advantage,” said John Shaw, MD of exporter First Subsea. “We saw renewables as an emerging industry, then realised it was a global market. The commercial proposition - financing, bonds and payment terms - was very different from oil and gas. But our bank and UKEF worked well together and delivered us a product very quickly.”
Traders hit by food prices driven up by crop devastation in producer nations
Market research analyst Mintec reports that cardamom and cinnamon are up 26 per cent and 25 per cent, while menthol and orange have also leapt in price.
Trade magazine The Grocer said spice traders blame the price hikes on destructive weather patterns which have devastated crops across key producer nations in Asia, Africa and South America.
In the past year, nutmeg has increased by 63 per cent, ginger by 60 per cent, and black pepper by 53 per cent.
Dried garlic and pimento have doubled and turmeric is up by 47 per cent. But the biggest rise has seen mace, which comes from nutmeg, jump 140 per cent in price.
Mintec reports that Rapeseed Oil prices rose to a 50 year high in November then dropped slightly as buyers took a tactical approach. Market participants say prices are still being driven up by high demand from the food and biodiesel sectors as some supplies, notably from Canada, fell off.
Prices for Durum Wheat continue to rise too. Again, buyers who’d avoided the market in recent weeks were compelled to return as physical supply is ‘very short’. The market might be eased by the vital supply of Mexican durum and the imminent Australian harvest - which was affected by a mouse plague. International buyers have limited options and prices reflect that. Even the almond market was in a large decline in October but, according to the Mintec Almond Report, there were signs of recovery at the end of October.
The dairy market still has price support as tight milk supplies maintain ‘bullish’ momentum across all European markets. Any sellers trying to capitalise on higher prices are facing ‘a distinct lack of buy-side interest’, says Mintec. This has resulted in small volumes being moved. European butter prices continued to move higher, with EU unsalted butter up over 5 per cent week-on-week.
Freight now coming in on Tangier to Dorset ‘Brexit Buster’ link to Morocco
In November a shipment of 100 freights of organic seasonal fruit and vegetables arrived in Dorset and was routed northbound. The route runs once per week and comprises dry and refrigerated freight.
The link cuts overall journey times on goods to and from the UK to fewer than three days, compared to more than six days via road. It could encourage British importers to source fresh produce and other products directly from Africa. Trade relations between the UK and Morocco have a long-standing history of over 800 years, and it is anticipated the link will further strengthen ties between the countries. Exporters are being encouraged to consider southbound trade to Morocco surrounding regions.
The route has taken over two years to move from planning to execution but it could now help bypass post-Brexit traffic congestion and import procedures on goods arriving via Europe. It cuts emissions significantly in comparison with road haulage.
With prices rising as a result of ocean-going freight rates United Seaways says its new direct line offers the most competitive prices through full logistics services needed by demanded by exporters and importers. Its offering includes road haulage, door to door services, customs clearance and warehousing.
In reaction to the HGV driver shortage, United Seaways will shift from a RoRo service (unaccompanied cargo only) to RoPax service (accompanied cargo).