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What is Spice, Aromatic, Drug and Pharmaceutical Crop Finance?

Spices are one of the world’s oldest traded commodities. The volume of spices traded globally has grown steadily over the past decade, coupled with increasing demand for complex crops, herbs and spices from pharmaceutical industries and consumers in emerging market economies. As average order volumes rise and production becomes ever more industrialised, Trade Finance Global can help manage the increasingly complex transactions underpinning these exchanges.

Trade in Spices, Aromatic, Drug and Pharmaceutical Crops

The global market for seasonings, spices and herbs is booming, with total production nearing US$6.5bn per year. Supported by growing demand in food service and growing consumer fascination for different cuisines, the total flavouring markets maintain an upward trend in volumes and values. Moreover, global production of herbal, aromatic and medicinal plants is also increasing, largely as a result of rising interest in alternative health products. These commodities are processed into a wide variety of health foods, preventative medicines and alternative products (such as capsules, teas, tablets, oils and creams) and sold as over the counter remedies to common health problems.

These products are often grown and processed outside of the UK and EU, and can subsequently be subject to stringent constrictions on the quality and volume of receivable which can be imported and extensive customs checks – complex, when time is of the essence to preserve the quality of the receivable. However, Trade Finance Global can expedite these trade transactions using its proven support structure for international traders. Underpinned by private finance on flexible repayment terms, businesses can be assured goods are moving through supply chains, processing plants and ports through a series of performance-based payment structures including performance bonds or bank payment obligations, and teams can advise on appropriate transportation and warehousing solutions for these complex products.

Products financed

Key products financed include:

• Pepper
• Capsicum
• Ginger
• Vanilla
• Pimento
• Rosemary
• Thyme
• Oregano
• Opiates
• Borage
• Hemp

Spice Producer Finance Requirements

• Your accounts receivable are profitable and stable
•  It is appropriate for you and your business to take on credit obligations
•  A trusted buyer or seller has been identified for the venture you wish to undertake

How the transaction works

The production, processing, customs and regulatory dimensions of these products vary hugely between each one. Conducting transactions across international borders can be daunting for relatively inexperienced traders. More experienced businesses relying on these commodities as part of just in time supply chains can also find themselves exposed to a significant amount of operational risk due to these factors as even minor delays cause costly issues further along in the production process. Trade financiers can help mitigate this operational risk; their low capital requirements and flexible terms of repayment are more appropriate to highly capitalised producers, and their ability to construct bespoke financial products can help facilitate potentially complex transactions and reduce operational risk.

What is the SIC Code for Trade in Spice, Aromatic, Drug and Pharmaceutical Crops?

Speak to our trade finance team