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Exporters face high payment default risks
20
Feb '09
The economic turmoil has unleashed a financial crisis which cannot be compared with any other situation in the past, other than the economic depression of the 1930's. Other than creating recession in global markets, liquidity in major markets has dried up, which is aggravating the impact of the recession.

Exporters from major countries, including China are bearing the full brunt of the liquidity crunch in global markets. This has led to delay in payments or cargoes being not off loaded as the importer is not in position to release the goods, which is also creating a logjam at major ports, with demurrage charges being borne by the exporter.

The Shaoxing Customs authorities are advising companies involved in foreign trade to be careful and first take a confirmation from the buyer before shipping the goods and in case it is still not released by the buyer, the consignment should be brought back immediately to avoid demurrage charges or even face auction by the customs of their goods.

A few days ago, a consignment of clothing worth US $200,000 was dispatched from the Shaoxing port to a Russian buyer on receipt of $30,000 in advance. But the merchant due to financial reasons has not released the consignment, due to which the exporter is bearing the high demurrage charges at the Russian port, revealed the customs.

According to estimates, 200 containers dispatched from the province of Shaoxing are still lying unclaimed in different Russian ports and if the number of unclaimed container figures from the whole country was to be considered it would tot up to a very high figure for Russia.


Fibre2fashion News Desk - China

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