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How To Start Food And Agro-Commodity Trading With The World

The complete guide to know before starting food trading with the world

Starting an international business and trading with the world seems quite interesting. But the reality is it is too difficult and daunting. When one sits and pen down the requirements of a business. Let us first understand what is food or agro-commodity trading with the world before we start discussing the steps of strategies in detail.

International trade can exist between two companies, two countries, or even two individuals. Let’s make it even simpler by giving an example, Saudi Arabia is the exporter of oil which Japan imports to fuel its transports. America is the world’s largest exporter of software. However some small countries in Africa don’t export anything and have to depend on all the import services from different companies.

What are the best characteristics of companies trading with the world?

International trading is hard, and hence only a few companies can survive in such tough conditions. The companies have to ensure that they are good at sales on national levels. They are well ahead of their competitors. International trading of food and agro-products require a lot of paperwork and immigration along with quality analyses.

A number of producers compete to sell their products and therefore, trading with the world is important to heavy competition. Packing, price, advertisement, etc. play a very important role in deciding who will win over the market. Every country’s government exercises their control over national imports and exports.

The companies have to be flexible to welcome and work with people from different countries, cultures, and who follow different styles of business. They should try to adapt to these and develop good relations with them. I am doing research on international trading related to the business to avoid errors. One should also have the information about the specific business. Also must love to travel and be comfortable to work at flexible fluctuations of time-zones.

What are the different types of international agro-commodity trading with the world?

1. Commission-based international traders of food products

One of the most straightforward businesses for trading with the world is on a commission basis. Here the only job is to match buyers and sellers and ask commission percentage on each trade. One has to ensure that they have a long-term relationship with an increased number of clients to compensate for the purchase.

For example, if the buyer demands 50-ton oil from Saudi Arabia and Saudi Arabia sellers are out of stock. Then one must facilitate the purchase from America at fair prices. One must also find responsible buyers as the exporters will only pay the commission once they get their payments from importers.

2. Retail brokers who assist exporters

Brokers are middlemen between buyers and sellers. Sales agents who work as brokers and assist the exporters are retail brokers. In some exceptional cases, the exporters don’t have enough buyers. Hence they demand help from the brokers who can sell their products in a sufficient contract. The exporter pays commission slowly as the products get sold among importers until the end of the transaction.

3. Distributor

The distributor buys goods of interest from manufacturing companies all across the world by importing their goods. The next job is to purchase food or agro commodities from and export them to the international client all across the globe. The distributors select only the best products for both import and export at fair prices. They add their profit before selling them to wholesalers and retailers all across the globe. They are essential when manufacturers are not able to target and reach the markets on behalf of them. A distributor works very hard and dedicates himself towards building business relationships and trading with the world. 

Global trade for food and agro-commodities has increased

According to the food and agriculture organization of the United Nations, the market has doubled since the last two decades amounting to $1.5 trillion in 2018. The FAO director general also stated that the world has to rely on the global food system after the major outbreaks like covid-19, climate change, and locust eruption.

The agriculture and food markets play a significant role in sustainable development. Also certain schemes can promote fair trade, non-discrimination, and environment friendly farm practices. 

Digital technologies can help the market to perform better and farmers’ access to these technologies would also improve. Food e-commerce and other similar innovations can benefit both farmers and customers. However the division should be done ethically. So whenever every farmer should get the opportunity to develop themselves.  

The top food and agro-commodities for trading with the world

Understanding the commodities that earn a higher income for trading is necessary. There are various commodities and some of them include:

  • Cereals- The international training of cereals particularly wheat has been dynamic and others like rice, maize, and barley also have a high demand internationally. 
  • Meat- The trading of beef in foreign countries takes place in a greater number and countries like Japan, Mexico, Hong Kong, Canada are the biggest importers of beef. 
  • Fruits and vegetables- The contribution of fruits and vegetables in the international market takes place on a large scale. It provides various market opportunities to the traders. Each and every country can benefit from the trading of fruits and vegetables and starting as a beginner from this commodity would be of great benefit.

The bottom line

Although the task of trading is difficult, with full dedication and a lot of hard work one can achieve the targets and become successful. A tip from our side would be to create a list and read as many articles as possible to understand about international trading in depth. After the list is done, one should finally start working and tick off all the important elements from the list. We hope the article helps you in understanding about food and agro-commodities trading with the world and motivates you to begin.  For more information, contact Myanmar Golden Heart.

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