A South African agri-food trader with a large network of local buyers planned to import IR64 raw rice from Pakistan. Since the supplier required secure payment terms, the buyer decided to use an LC Payable at Sight. Read how Bronze Wing Trading helped arrange the required Letter of Credit.
The Rice Buyer Required LC Payable at Sight
Our client, an agri-food trader in South Africa, needed to purchase 10,000 Metric Tons of IR64 Raw Rice every month. They searched for a reliable supplier who could meet the quantity regularly at competitive prices. Through an online B2B platform, the buyer found a supplier in Pakistan who was ready to supply the required monthly quantity. Although the supplier met the commercial terms, the buyer wanted payment security through an LC Payable at Sight.
The Bank Declined the Buyer’s DLC Request
The buyer first approached their bank to arrange an LC MT700. However, their existing banking facilities were fully utilised, so the bank declined the request. Other banks were willing to provide the MT700 but required a 100% cash margin. Since the buyer did not want to block working capital before shipment, they searched for another option.
While researching online, the buyer found information about arranging a DLC through European banks without a large cash margin. They reviewed our services and contacted Bronze Wing Trading by email.
The Buyer Availed the Required LC at Sight
The buyer shared the transaction details and supplier’s proforma invoice. Our team reviewed the rice deal, assessed the documents, and approved the request for an LC at Sight. We explained the process and formalities, after which the buyer signed the service agreement and completed the required charges.
DLC at Sight Issuance from European Banks
After receiving the charges, we structured the MT700 with our banking partner and prepared the DLC draft for review. The buyer approved the draft, completed the issuance formalities, and provided the required documents. We then instructed our European bank to issue the Letter of Credit at Sight in favour of the supplier through SWIFT MT700.
The Supplier Started the Shipment of Rice in 50KG Bags
After receiving the LC Payable at Sight, the supplier packed the IR64 rice in 50KG bags and arranged shipment by ocean freight. Once the goods reached the destination port, the buyer completed the payment process and received the original shipping documents. The supplier was then paid according to the agreed LC terms.
Apply for LC at Sight
If you are planning an import deal and need an LC at Sight, contact Bronze Wing Trading Ltd with your requirements. Our team can review your transaction and guide you through the Letter of Credit process.
