Chicken Paws are proving to be popular in China, as like chicken wings in the US. Paw imports in China slightly slowed down in the year 2020 and the mid of 2021, due to the impact of COVID 19. But now, the demand has been increased rapidly. To meet the demand, a buyer from China planned to import chicken paws from Brazil using a Documentary Letter of Credit.
What is Documentary Letters of Credit?
Documentary Credit or Letter of Credit is issued by the buyer’s bank in favor of the supplier to assure that the payment will be made, once the seller submits the shipping documents. By acting as a credit certificate for buyers, LC at Sight builds trust between buyers & sellers. By understanding the benefits of LC, nowadays, most of the global trade transactions are occurring using LC Payment Term. Below is one of our success stories in helping a Chinese trader to import Chicken Paws from Brazil using LC at Sight.
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Buyer’s Requirement of Documentary Credit
Since the demand for Chicken Paws is at its peak in China, the buyer decided to use this time to do some imports. They planned to import the paws from overseas sellers & resale them to the local market. So, they searched for the seller and find the best one from Brazil. The Brazilian seller offered the best quote for the buyer. But to proceed with the import, the buyer didn’t have enough cash funds in their hands; so they discussed with the seller to import the goods without making advance payments. Since the buyer was unknown, the seller didn’t want to take any risk. So, he asked the buyer to provide a Letter of Credit which assures that the payment for the supplied goods will be made right after the shipment. The buyer agreed to the seller’s demand and started looking for ways to get MT700.
Buyer Contacted Us with the Documentary Credit Request
The buyer’s MT700 request was declined by their bank due to a lack of cash funds to provide a cash margin. So, they looked out for other options to avail Sight LC. While searching online for the International Trade Finance Company, the buyer found us & submitted their MT700 request to us. Also, the buyer called us via phone to discuss their requirement. Since the buyer urgently required Import LC to import chicken paws, we put their Letters of Credit transaction on our utmost priority list & provided the proposal within a day. Since our proposal was well explained & the charges were nominal; the buyer signed the agreement with us & paid the admin charges to block the bank limit.
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Our Role in Providing Documentary Credit
As the next step, we structured their MT700 transaction with our bank based on their Chicken Paws deal and provided the LC MT700 draft along with the Bank Name and other details for the buyer’s review. Since the buyer had few doubts about the draft, they called us to discuss further. Hence, we arranged a video call via Google Meet and explained each & every clause in the draft to the buyer. Also, we explained the Letters of Credit Process such as – when the buyer needs to make the payment & when the seller can claim the LC, etc. Further, this made the buyer feel satisfied; and then, they proceed with the payment of LC issuance fee charges. After receiving the issuance fee, we instructed our bank to issue the required LC at Sight from our Bank Account in favor of the seller via SWIFT MT700.
The buyer conveyed their thanks to us for our timely service in issuing the required SWIFT MT700 at ZERO Cash Margin. With the issued LC, the seller started the shipment of Chicken Paws instantly.
How to Open Documentary Credit?
If you’re in need of LC at Sight from Good Repute Banks, you can contact us with your LC request. Since we have our own credit lines, we can support you to conclude your deals on time in a hassle-free way. Contact us now to discuss your Documentary Credit requirement in detail!
