S/C Financing – Rice Importer

Industry: Agricultural / Rice

From Arroz con Pollo and Paella to rice pudding, rice is an important dietary staple throughout Latin America and the Caribbean. The annual consumption averages around 81.57 pounds per person per year—or 1.3 cups per day per person. (1) With a population count of 609 million in 2015 (2), Latin America requires an abundant, continuous supply of this white grain to satisfy the region’s appetite.

Challenge

With demand for rice high, many Latin American countries simply cannot produce enough to meet the growing need. The supply gap is met by importing from other countries, making rice a commodity. Globally, trading of this food product is based solely on industry standards that require buying in large bulk units and accepting short payment terms that may not exceed 72 hours. That narrow payment window can be difficult for many importers, including the importer coming to ExpoCredit looking for a way to bridge the time between when he had to pay his suppliers for the large shipments of rice he was ordering (3 days or less) and when he received payment from his customers in Latin America—usually 90 days out.

Solution

As a firm specialized in all forms of alternative finance, ExpoCredit had several options in place for the Latin American merchant. ExpoCredit’s supply chain financing, developed specifically for international trade, proved to be the ideal solution. ExpoCredit was able to provide the rice merchant with the funds to pay his suppliers right away, successfully keeping the flow of imported rice coming into his facility uninterrupted and preventing any slack sales periods due to insufficient product supply.

Benefit

The merchant was able to pay his suppliers on schedule, with no penalties or interruptions of shipments—or his business operations. ExpoCredit was able to ensure the merchant’s customers were adequately supplied with the rice they needed to satisfy a Latin America hungry for this tasty commodity.

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