Trade Finance Services

Trade Finance Services

At GrainFuel Nexus®, we understand that the global trade of grains, fertilizers, and biofuels requires not only market expertise but also robust financial solutions to ensure seamless transactions. 


Our Trade Finance Services are designed to empower our clients by providing tailored financial solutions that bridge the gap between buyers and sellers, enabling smooth and efficient trade operations across the globe.


Why Trade Finance Matters in Commodity Trading


Commodity trading, especially in grains, fertilizers, and biofuels, involves significant capital requirements, long supply chains, and inherent risks such as price volatility, currency fluctuations, and counterparty risks. Trade finance acts as a critical enabler, providing the liquidity and security needed to facilitate transactions, mitigate risks, and ensure timely delivery of goods.


GrainFuel Nexus® offers a comprehensive suite of trade finance services tailored to the unique needs of the grains, fertilizers, and biofuels industries. Our solutions include:


Letters of Credit (LCs)

We facilitate secure and guaranteed payments through Letters of Credit, ensuring that sellers receive payment upon fulfilling contractual obligations, while buyers are assured of the quality and timely delivery of goods.

  • Reduces payment risk for both buyers and sellers.

  • Enhances trust between trading partners.

  • Supports international trade by complying with global trade regulations.

Pre-Shipment and Post-Shipment Financing

We provide working capital solutions to help producers, traders, and buyers manage cash flow throughout the trade cycle.


Pre-Shipment Financing: Enables producers and suppliers to finance the production and procurement of goods before shipment.

Post-Shipment Financing: Provides liquidity to sellers while awaiting payment from buyers.

  • Improves cash flow and operational efficiency.

  • Reduces the financial burden on producers and traders.

  • Ensures timely delivery of goods.

 

Inventory Financing

We offer financing solutions against commodity inventories, allowing clients to unlock the value of their stored grains, fertilizers, or biofuels.

  • Provides liquidity without requiring immediate sale of inventory.

  • Helps manage price volatility by enabling clients to hold inventory for better market conditions.

  • Supports warehouse and logistics operations.


Structured Trade Finance

For large-scale transactions, we provide structured trade finance solutions tailored to the specific needs of our clients. This includes syndicated loans, revolving credit facilities, and risk-sharing arrangements.

  • Supports high-value transactions and long-term trade relationships.

  • Mitigates risks through customized financial structures.

  • Enhances creditworthiness and access to capital.


Risk Management Solutions

We help clients manage risks associated with commodity trading, including price volatility, currency fluctuations, and counterparty risks.  Our solutions include:

  • Hedging Instruments: Futures, options, and swaps to lock in prices and reduce exposure to market fluctuations.

  • Credit Insurance: Protects against non-payment by buyers.

  • Currency Hedging: Mitigates foreign exchange risks in international trade.


Case Study: How GrainFuel Nexus® Enabled a Major Grain Transaction

Client: A leading grain exporter in Ukraine
Challenge: The exporter needed financing to procure and ship 50,000 tons of Corn to a buyer in Egypt but faced cash flow constraints.
Solution: GrainFuel Nexus® provided:

  • Pre-shipment financing for CPT cost.

  • A Letter of Credit to guarantee payment upon shipment.

  • Currency hedging  to mitigate exchange rate risks.
    The transaction was completed smoothly, with the exporter receiving timely payment and the buyer securing the shipment on schedule.


Requesting quotes 

For buyers, we suggest evaluating the sales procedures before requesting a quote. In this way, it will be possible to prepare your company to comply with the procedures within the agreed deadlines.

DO NOT SEND LOI – Most will be discarded when we receive them.
In order for you to be effective in your negotiation with GrainFuel Nexus, with regard to agricultural commodities, carefully follow the guidance below.

The Sugar Example 

Request a quote / Procedures:

  1. BUYER sends ICPO (Irrevocable Corporate Purchase Order)
    Complete buyer information about the issuing or confirming bank, it is essential to be a TOP 50 bank. We only accept full Bank ICPO from the recipient of the purchase, this document on PDF letterhead, complete banking and business information of the purchasing company (all information will be consulted).
  2. Seller issues FCO (Full Corporate Offer).
  3. The buyer returns the signed and stamped FCO and sends the BCL (Bank Confirmation Letter) and draft of the SBLC or LC for approval by the seller’s bank or the seller’s financial sector. The Purchaser’s ICPO together with the BCL and Draft Financial Instrument will be sent to the financier responsible for the operation to carry out Compliance. After approval by the buyer, the procedure continues as follows:
  4. Seller issues Contract Draft (SPA). After receiving the FCO approved by the buyer.
  5. The buyer returns the signed, stamped and scanned Draft Contract by e-mail and it will be considered legal and official Contract of Purchase and Sale until the copies are exchanged.
  6. The seller issues a Commercial Invoice.
  7. The buyer returns the stamped and signed Commercial Invoice.
  8. The buyer’s bank issues DLC (Documentary Letter of Credit); Sight L/C - At sight letter of credit (MT 700/760) and sends it to the seller’s bank within 15 working days. The bank instrument must be revolving, transferable or Non-Transferable to SBLC only and DLC only transferable, irrevocable, divisible, operational, renewable and confirmed by the top 50 bank, with Payment via MT 103 upon presentation of the shipping documents (B/L + SGS) by the seller at the port of origin or as agreed with Seller.
  9. After the open banking instrument, the seller’s bank sends to the buyer’s bank a PB (Performance Bond) of 2% within 12 working days in the amount of a remittance only for contract conditional on payment at origin, we will issue PoP (Proof of Product) within 15 days for any form of payment.
  10. The buyer will receive an invitation letter to accompany the shipment at the port if necessary. 
  11. In 35/45 days the ship will be loaded.
  12. Payment against the OBL and SGS shipping documents.

PAYMENT METHODS

Payment of 30% against pro forma invoice and 70% after sending shipping documents Note: Only for fractional orders in container

DLC + MT 103 | DLC with value equivalent to one month of supply and maturity of 1 year Plus 1 day, irrevocable, unconditional, transferable and divisible. Issued by the TOP 50 bank and payment for boarding the MT 103 LC – at sight, Conditional, Irrevocable, Transferable and Divisible Bank TOP 50 

Payment against NON NEGOTIABLE O/BL and SGS With Named Consignee, shipping documents, as noted above, as per the Documentary letter of credit (DLC/Sight LC). We always recommend DLC to our buyers.

Additional Notes :

  • We do not ship physical samples without exception.
  • We do not send BL or other shipping inspection certificates from previous customers for someone to review (Data Protection Act). No past performances.
  • We do not upload photos or videos to avoid infringing our suppliers’ privacy and identity.
  • It is evident that SGS is the market leader in inspection, verification, testing and certification of companies. It is recognized as a world reference in quality and integrity. For additional information, follow the website below:
    www.sgs.com