$250,000 in sales following ITC advisory services
Exporters in Togo have sold a quarter-million dollars' worth of soybeans to new customers in Vietnam and the Netherlands, after International Trade Centre advisory services helped them improve their trade-related corporate procedures and strike deals with buyers.
Agriculture is critically important for incomes and food security in the West African country, where 41% of the population works in the sector. Diversification into soybean production helps to provide the country with a measure of insurance against yield and price volatility for traditional crops like cotton, cacao and coffee.
As part of an Enhanced Integrated Framework project to improve productive and commercial capacities in Togo's soybean sector, ITC has been working since May 2016 to improve Togolese SMEs' export management capacities and translate this expertise into increased international sales. To this end, ITC has trained the SMEs on understanding export procedures and conducting commercial negotiations with prospective customers and meeting their requirements. In addition, ITC has facilitated the companies' participation at food industry trade fairs in Europe and the Middle East.
This work yielded important dividends in March, when initial expressions of interest reached at the trade fairs matured into two purchase contracts.
Under the first deal, a Togolese agri-business company, sold 500 tons of conventional soybeans to an importer in Vietnam for $185,000, representing a rate of $370 per ton. The sellers and buyers met at the Gulfood fair in Dubai in early March.
The second contract originated at the Biofach organic trade fair in Nuremberg, Germany, in February. A Togolese firm specializing in organic production concluded a 100 ton exploratory sale of organic soybeans to a Netherlands-based company at a rate of €585 per ton, for a total of €58,500 ($65,400). The organic soya commanded a considerable price premium - around €252 per ton - compared to the conventional product.
The soybeans shipped to both destinations in April, after meeting various health and safety-related stipulations set out in each contract.
Both of the firms in Togo purchase soybeans directly from farmers.
The conventional soya purchases for export to Vietnam helped more than 500 producers make up for the absence from the market this year of longstanding buyers from India, after that country's demonetization reform forced many Indian businesses to change purchasing plans. Selling their soybean stocks allowed the Togolese farmers to save some money and invest in planting subsistence crops for the current season.
Farm gate prices for organic soya are approximately 20% higher than that for the conventional variety, and the Dutch purchase enabled more than 50 organic producers pay off microfinance loans. While the farmers need to produce to organic standards, the Togolese organics company bears all certification-related expenses.
The value of the two sales already exceeds ITC's $166,000 investment in the project. Similar transactions for substantially larger quantities of soybeans are expected over the next two years.