Currency exposure and payment terms in international feed trade

Matching payment milestones to evidence

Tying a payment to shipment documents, an inspection certificate or a discharge result keeps a commercial lever available if quality does not match the contract. Milestones tied only to calendar dates remove that lever.

The real cost of payment security

Documentary instruments carry bank charges, documentation discipline and time. They reduce counterparty risk, particularly with a new supplier, and that trade-off is usually worth making on early shipments and less so on a long-established relationship.

Currency exposure

Where the sales currency of the finished feed differs from the purchase currency of the ingredient, exposure exists whether or not it is managed. The first step is to measure it per contract; hedging policy is a treasury decision, not a procurement one.

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