chalespinosa

Last year an acquaintance of mine  the principal of an export oriented SME  was recognized  last year by an export association as one of the best small exporter in Nicaragua.    The principal shareholder of the SME is an american who prior working in Nicaragua worked in the highly competitive market of software design and electronic payment industry in the West coast of the US.   People who know this person know him as being  professional , organized, precise, and accustomed to doing things correctly.  

What happened to this SME (exporter) is what happens to many small exporters who export commodity products to the US and/or other export markets.  Here is how it works.   The exporters sell their goods on open account basis to a broker/distributor in the importing country who takes possession of commodities upon arrival, inspects   and decides to accept or reject the product.   In our case the importer argued that the product shipped was too small, did not meet specifications stated in the sales contract.   Therefore since it did not meet specifications the exporter had three choices a) sell product at a discount b) take product back or c) destroy it at port of entry.   Commodity Brokers in any country enjoy  the bargaining power of customers (buyers) that is they have control and may force an exporter to accept their terms and conditions under duress.   In our case the exporter took his produce back, sold it  to another buyer  but at a deep discount taking a major financial loss, a loss that put his small company in jeopardy of going bankrupt.   The only recourse available to the exporter was to file a complaint with USDA under the Perishable Agricultural Commodities Act (PACA).  A year later the exporter is still fighting in the US to recover his losses but in the mean time to survive he has been selling assets to pay trade bills and financing expenses.   Exporter hopes to be back in business when and if he is compensated.