Why can we not accept the payment term to be 100% D/P or D/A towards the Tomato Paste exporting to Africa?

Every day we receive quite a lot of inquiries from African clients such as Togo, Nigeria and etc. They wish to develop the market of Tomato Paste with the payment term 100% D/P or D/A. Now please allow me to explain why this payment term is not able to continue.

In 2008, we started the exporting business of Tomato Paste to Africa. We could accept the payment term 100% D/P or D/A as SINOSURE is involved. The working procedure of SINOSURE is as follows:

1) We apply the quota from SINOSURE with the English name and address of the client’s company.

2) Once the quota is confirmed, we can sign the contract with the client with the payment term 100% D/P or D/A within the limits of the quota.

3) We fulfill the contract and arrange the shipment.

4) The client pays for the order. If the client does not pay, SINOSURE shall firstly compensate us 80% of the total amount and continue to chaise the rest 20% from the client.

With the protection of SINOSURE, the payment term 100% D/P or D/A is totally safe for the Chinese exporters. Therefore we’ve done years of business with African clients and developed many new clients with this payment term. It happens that some clients do not issue the payment in time, but we received all the payment with the help of SINOSURE.

Till 2014, as the compensation percentage is increasing a lot in African countries, SINOSURE had canceled the quota towards most of the African countries which means we could no longer apply the quota for the new clients as well as enjoy the 80% compensation. Considering 100% D/P or D/A is high risk towards the export companies, now we no longer accept the order under such payment terms. Normally the production will not start unless the prepayment is received from the new clients.