9 tips for organising your honey exports to Europe

Once you find a buyer who accepts your offer, you will have to start organising the export of your honey to the European market. To succeed, you have to consider several steps to get your product to the buyer. This can be challenging because of European import policies and buyers’ requirements. The tips below provide practical information on how to approach organising your honey exports to the European market.

1. Secure your payment: pick the right method in agreement with your buyer

International trade offers a range of payment terms, each with pros and cons. It is crucial to understand that different terms pose different risks for all parties involved. As such, it is essential to evaluate the risks and benefits of each payment term before reaching an agreement. 

As a honey exporter, several factors affect your choice of an international payment method. Keep in mind the goal of mitigating potential risks while finding common ground with your European buyers. Selecting the right payment method is crucial for establishing enduring relationships with buyers. 

European honey buyers mostly use the following methods of payment: Letter of Credit, Payment in Advance, Documentary Collection and Open Account.

Letter of Credit (L/C)

The Letter of Credit (L/C) method is the most used payment method, especially in new trade relations. L/C provides security to both buyers and sellers. This is because L/Cs allow both parties to engage a neutral party, typically a bank, to resolve disputes. 

The chosen bank guarantees the exporter full payment upon the dispatch of goods as long as the conditions outlined in the payment contract are met. Common conditions that need to be met before you get paid include the following.

• Documentation requirements: you have to present the required documentation, such as invoices and transportation documents, to the buyer or the bank.
• Shipping and delivery terms: you have to comply with specific requirements related to shipping and delivery. For example, you need to ship your product using the agreed mode of transport, and the product should arrive on time.
• Product quality: you must ensure that the shipped product meets the agreed level of quality.

The buyer can reject the goods if you cannot comply with any of the set conditions, and you will be exposed to the risk of not receiving payment. Accordingly, you should be careful when agreeing to an L/C payment method. Only agree if you understand and can meet the specific conditions outlined in the contract. 

One downside to this payment method is that it can be expensive because banks charge a fee for providing the service. You can make this less of a disadvantage by splitting the fees with the buyer. 

Payment in Advance 

Payment in Advance is a payment method in which the buyer pays you before receiving the product. This payment method requires a high level of trust on the buyer’s part. After all, the buyer makes the payment without any guarantee that you will deliver the products or comply with all their requirements. All of the risk lies with the buyer. Accordingly, this method is often only used once the buyer and the seller have a well-established relationship. 

Documentary Collection

This payment method gives you security because you keep control of the goods until you receive payment. Trade documents, such as invoices, shipping papers and insurance papers, are transferred through banks. You instruct the bank when the buyer can get these documents. Either you first require the buyer to make the payment (Document Against Payment – D/P) or you require the buyer to accept a contract for payment at a specified future date (Document Against Acceptance – D/A). This payment method means you stay in control of your goods until they are paid for. However, you are exposed to some risks as you have no guarantee that the buyer will make or accept the payment once your product has been shipped. The product could be at its destination and the buyer may fail to pay. If this happens, you can try to ship the product back or store it at the destination while you try to find another buyer. 

Open Account 

Open Account can be seen as the opposite of Payment in Advance; you have to deliver your product to the buyer before you receive payment. This method is different from L/C, for example, as you do not receive a guarantee of payment before you ship your product. This means that all of the risk lies with you: the seller. Similar to Payment in Advance, the Open Account method requires a well-established relationship between buyer and seller. As a seller, you should only agree to this payment method if you have a longstanding relationship with the buyer and are sure they will make the payment. 

Gaining a competitive advantage

As an exporter, you can gain a competitive advantage depending on the payment method you pick and your payment terms. Being flexible about the payment method can help you to make agreements with potential buyers. For example, you can gain an advantage by accepting a Letter of Credit as a payment method if your competitor only accepts Payment in Advance.

Again, when deciding on your payment method, remember that the most secure payment method for you is Payment in Advance, followed by Letters of Credit, Documentary Collection and Open Account (see Figure 1). For buyers and importers, it is the other way around. Ideally, when beginning a trade relationship with a new buyer, you want to ask for Payment in Advance to minimise your risks. However, buyers may not be willing to agree to this method as it is very risky for them. If they are unwilling to take the risk, you should insist on the Letters of Credit method so you can share the risks with the buyer. 

Figure 1: Payment Methods Risk Diagram

Source: ProFound, adapted from International Trade Administration, 2023

2. Use export financing to bridge the financial gap between harvest and sales

If you do not have enough money at the time of harvest, Export Financing (EF) can help. You can get a loan through EF if you need to buy honey for export. This can help you manage the time gap between spending money and receiving buyer payments. However, be aware that loans will cost money through interest and fees. 

Figure 2: Export Financing Timeline

Source: ProFound, 2023

When do you need Export Financing?

You should only consider EF if you cannot afford to buy the honey you want to export. Of course, you do not need EF if you have agreed on Payment in Advance with your buyer (see Tip 1), as you will be paid before buying the product. With other payment methods, you could consider using EF, but keep in mind that loans are not free. 

The longer the period between you buying the honey and receiving payment, the more useful EF can be. Due to strict quality requirements set by European buyers for honey, exporting honey to Europe can be a lengthy process. With sample tests, it usually takes at least eight weeks between acquiring honey and receiving payment (see Figure 3). 

Figure 3: Timeline of Export, including Double Sampling Requirements

 Source: ProFound, 2023

How do you get Export Financing?

You should determine if you need Export Financing (EF) before applying for it, as external financing comes with costs. The cost can be worthwhile if it allows you to expand your business and increase your income. 

Getting Export Finance will require the following steps:

1. Prepare your request. Determine how much money you need and what you need it for. You should also collect information about the prospective buyer (contact details and creditworthiness if possible) and be able to hand over a copy of the trade agreement. 
2. Choose and contact a bank or financial institution. Share your needs and prospects and ask about financing options. 
3. Consider the available financing options. Ensure that you know and understand all the terms for each option, including the interest rate, fees, repayment terms and required collateral. You should only take the next step if you can comply with the terms and the costs are within your limits. If not, you can try to find a better option at a different bank or financial institution. 
4. Apply for the financing. This will require you to submit documentation to the financial institution.
5. Once the bank or institution accepts your application, they will present you with an offer. Read through the offer carefully, and only sign if you can comply with the terms and conditions. 

Where can you get Export Financing?

There are several financial institutions where you can apply for Export Financing. You can visit a local commercial bank, export credit agencies, development banks or institutions, trade promotion agencies and international banks with an office in your country. 

Examples of large commercial trading banks include BNP Paribas, HSBC and Deutsche Bank. Development banks sometimes provide the same services at a discount because of their public function. Examples of development banks include the European Investment Bank (EIB), the Asian Development Bank (ADB), the African Development Bank (AfDB), the European Bank for Reconstruction and Development and the Inter-American Development Bank (IDB). Impact investors include Alterfin, Oikocredit, Impact Finance, Rabo Rural Fund, responsAbility and Root Capital. 

3. Get the sampling right: representativity is key

Buyers will require samples to check the quality of honey. You must send representative samples of the honey you sell. If your samples do not match the quality you sell, the buyer may reject your honey once delivered. This can damage your reputation and your relationship with the buyer.

How to take the right sample

Make sure your sample accurately represents the honey you will be selling your client. Follow these guidelines to ensure proper sampling:

1. Communicate with your (potential) buyer about the preferred sampling method and required quantity in each sample. 
2. The sample must represent the honey you plan to sell and ship to the buyer. If you have honey from different producers, you must take representative samples from each batch or producer. 
3. Use sterile/clean tools to take the individual samples to prevent contamination. 
4. Store and ship the samples in the right conditions to prevent contamination or quality loss. 
5. Provide the buyer with clear and detailed information about the samples, including batch identification and the volume you can supply. 

Quality testing

European buyers’ testing of honey has become increasingly strict over the past few years. Honey is tested to determine if it complies with European food regulations regarding maximum permitted levels of antibiotics, pesticides and residues, product authenticity and other quality parameters. 

Most buyers will test samples at two different points during the exporting process: 

1. Offer sample: Before the trade agreement, they want to examine the quality of the honey you offer. 
2. Arrival sample: This is taken once the honey is delivered to its destination. This sample is tested against the offer sample to see if the quality matches. 

European buyers prefer to do the testing in European laboratories to ensure a specific level of quality. This means you will likely need to send samples to Europe. If you cannot supply the requested volume of honey for a certain sample, always be open about this with the buyer. Do not supplement your shipment with another batch of honey.

4. Provide the proper documentation for customs

European customs control the flow of goods into the European Union and collect tariffs. While you may not be directly responsible for customs clearance as the exporter, providing your buyer/transporter with all the required documents and support is crucial. Failure to do so will result in your honey being refused entry to the European market, which will have significant negative consequences for your trading relationships. 

Required Documents

To get your honey shipment through customs, you must provide the following documents: a health certificate, an invoice for the buyer, the packing list of your shipment and a certificate of origin. 

The health certificate is the document that proves that the shipment of honey meets the health and safety standards set by the EU. To get this document, you need to get your honey tested by the local regulatory authority responsible for your country’s food and safety. This could be a government health department or an agriculture agency. If everything is in order, the authority will give you the health certificate, which confirms that your honey meets the necessary health and safety standards for export. 

The invoice to the buyer provides the details of the transaction and the goods being shipped. Customs use it to determine the value of the goods being imported and the corresponding tariff costs. 

Tariffs

Find out what tariff applies to exporting honey from your country to the EU. Tariffs on honey are specific to each trade relation between the country of export and the country of import. The standard tariff for imported honey from countries without special trade agreements is 17.3%. 

Your honey may be exempt from tariffs if your country has a trade agreement with the European Union. To make use of the exemption, you are required to provide a certificate of origin.

Use the My Trade Assistant tool to find the up-to-date tariff charged for honey exported from your country. 

Figure 4: Access2Markets Trade Assistant Tool

Source: European Commission, 2023 

5. Digitise your documentation to smoothen administrative processes

Together with the buyer, you can use the EU’s Trade Control and Expert System (TRACES) to digitise the health documentation needed for customs. This reduces administration for you and will speed up shipping your goods to the buyer. 

To use TRACES, you need to follow these steps: 

1. Create and set up an account. These instructions tell you how to do this. 
2. Agree to using TRACES with your buyer. 
3. The buyer initiates the process by filing the trade details in TRACES and creating a CHED registration request. 
4. If the necessary documents are not all registered in TRACES, you will be asked to provide them through the competent authority (CA) in your country. 
5. Once every document has been registered and approved, the CHED will be validated and registered in TRACES.
6. You can now ship your honey using the information provided in the TRACES system. 

Figure 5: TRACES request for CHED registration 

Source: ProFound, 2023

Besides simplifying the documentation requirements for your goods to pass through customs, TRACES also improves the traceability of goods. After handing your goods over to the transporter or forwarder, you can check where your goods are in the TRACES platform. This can also be valuable to the buyer. 

6. Select the most efficient way to organise international transport

The organisation of your honey transport depends on the ‘Incoterms’, short for International Commercial Terms, you agree with the buyer. Based on the chosen Incoterms, you have to account for conditions during transport, the cost of transportation and the time it takes to deliver your honey to its destination. Organising your transport in the right way will significantly impact your business, as it affects delivery times, costs and buyer satisfaction.

Incoterms

When negotiating with buyers, pay close attention to the Incoterms used in the contract. Choosing the right terms can significantly improve the deal by saving on costs and taking away risk. 

Understanding Incoterms is the first step to choosing the right terms. Incoterms are a set of standardised trade terms. They define the responsibilities and obligations of the buyer and seller regarding the delivery of goods and payment. 

The most used Incoterms in international honey trade are Free On Board (FOB) and Cost Insurance and Freight (CIF):

• FOB: You are responsible for delivering your honey to the ship at the agreed port of shipment. From that point, the buyer is responsible for transportation, insurance, customs, tariffs and taxes.
• CIF: You are responsible for the costs, insurance and transport until your honey is delivered to the agreed destination port. From that point, the buyer is responsible for unloading, customs, tariffs, taxes and insurance. 

As the exporter, FOB has the advantage that the responsibility for the goods is transferred to the buyer at an early stage in the transport process. It simplifies your export process because you do not have to insure your goods after delivering them to the specified port or solve any potential issues with customs. 

Figure 6: Incoterms division of responsibility and risks

Source: Freightos, 2023

Besides FOB and CIF, there are other pre-established Incoterms. Read about using Incoterms to learn about these other Incoterms standards.

Mode of transport

You need to ensure that your goods arrive on time. European buyers often prefer shorter delivery times to meet market demands. However, while air freight is faster, it is unsuitable for bulk honey due to its costs. The most common mode of transport for transporting honey is by cargo ship, which is cost-effective and allows for large volumes. Transport by ship also emits fewer greenhouse gasses, making it a more sustainable option than air freight. You could consider air freight if the buyer needs small volumes (e.g. samples). 

Conditions during transport

Make sure that the transport conditions meet the needs for your honey so it arrives undamaged. 

Honey must be kept at a low temperature during transport. High temperatures can lead to an increase in hydroxymethylfurfural (HMF) levels, which is an indication of quality degradation. If the delivered honey does not meet the set quality levels, the buyer may reject the honey and refuse payment. Ensure all transporting agents involved are aware and agree to regulating the temperature of your product. 

Your honey must also be kept away from other products or substances that can contaminate it. Make sure your honey is transported in shipping containers that are clean and free from strong contaminants. 

Costs of transport

The cost of shipping honey depends on the following features.

• Volume: larger volumes come with a lower cost of transport per unit of shipped honey.
• Distance: the longer the journey, the more expensive the shipping.
• Special requirements: if you need faster delivery, additional cooling or more sustainable shipping, this will cost more. 
• Market conditions: high demand for shipping and low supply increase costs. Low demand and high supply might lower the cost.
• Fuel prices: rising fuel prices increase the cost of shipping. 

7. Cover trade risks with insurance

Exporting your product comes with risks: buyers may not pay, your product may get damaged or stolen during transport, delivery can get delayed and changing legislation can cause your product to no longer meet regulations. To diminish risks, consider insuring your goods and payments, especially if you deal with high-value shipments. 

Export Credit Insurance

Payment default risks are often insured against. The insurance that covers this risk is called Export Credit Insurance (ECI). ECI covers situations where buyers cannot pay because they are insolvent or do not pay within the agreed time frame. ECI also covers the risk of non-payment due to events beyond the buyer’s or seller’s control; for example, there may be an issue with transferring money between countries. 

Unless you and the buyer have agreed on Payment in Advance, which eliminates the risk of non-payment, you should consider ECI. 

ECI can make you more competitive because it guarantees payment. Many European buyers prefer delayed payment methods like Letter of Credit or Documentary Collection. If you do not want to take the risk of non-payment associated with these delayed payment methods, you may lose out on business. To avoid this scenario, ECI can cover the risks, allowing you to offer delayed payment and increasing your chances of signing trade deals with buyers.

It is essential that you fully understand the terms and conditions before you sign and that you know what you are insured against and not. If you are unsure, ask the insurance company for an explanation or help. 

ECI providers include export credit agencies, commercial banks and other financial institutions. Many countries have government-owned export credit agencies to increase the competitiveness of their exports. These government-owned agencies should be your first choice for getting ECI, so try to find your local agency by contacting your local government trade department.

Other types of insurance

You need to consider freight insurance in addition to insurance against non-payment. 

If you have agreed to CIF Incoterms, you are responsible for insuring your honey during transport. If this applies, you should consider applying for freight insurance; you have to get insurance if you agree on this with the buyer. Transport insurance covers the risk of damage or losses during transport. For instance, it can cover damage to the quality of your honey from prolonged exposure to heat during transportation.

If you agree on FOB Incoterms, the buyer is responsible for insuring the product during transport. However, if you cannot rely on the buyer to do this, consider applying for Seller’s Interest Insurance. Seller’s Interest Insurance covers the risk of the buyer not insuring the goods during transport and not being able or willing to pay for damage or losses. 

The cost of product insurance depends on the total value of the goods you want to export, as well as the origin and the distance it must travel. 

Some international insurance companies that offer freight insurance are Gallagher, Maersk and AIG. You can find many other companies online. The buyer may require you to work with a specific insurance company. 

You should get insurance well before the shipment is loaded. While the possibility of damage or loss of goods during shipment is generally low, insurance is relatively low-cost and will save you a lot of trouble and expenses if anything goes wrong.

Tips:

• Refer to Berne Union – Member organisations of the Berne Union for a list of reliable insurance companies. Alternatively, ask your local government trade department where you can purchase reliable insurance from.
• Find suppliers of ECI via Trade Credit Insurance | ICISA.
• Have your documents ready when applying for insurance. Insurance companies will ask for information on the contract, buyer and your business plan.
• Comply with all the requirements and conditions in the insurance policy. If you do not comply, you risk not being compensated if you have to make a claim. 
• Pay attention to what is covered by the insurance. Insurance does not always cover 100% of the potential losses you insure against. The policy contract will state the terms and amount of insurance payment in the case of damage.

8. Use safe packaging with the required labelling

You have a lot to gain by carefully selecting and designing the packaging of your honey. You should consider several packaging aspects, including protective features, contamination risks and unit size. In any case, always consult your buyer about packaging requirements to ensure your packaging is compliant. Failure to correctly package your honey can result in loss of product quality, dissatisfied customers and issues with customs. 

Protective features

Protection is the primary function of packaging. Honey can be transported in different containers that have different protective properties. In terms of protection, new BPA-Free stainless steel drums are considered the best choice for transporting honey in bulk as they offer better protection against contamination than plastic drums and IBC containers. Plastic containers have a higher risk of contaminating the honey due to their slight permeability, making them less protective against their surroundings.

Steel is also a good choice because it is more robust. Steel drums are less vulnerable to external shocks, such as falling or forces inflicted by being handled by heavy machines. 

Always consult with your buyer if you want to use food-grade plastic linings inside containers for extra protection against contamination. The lining can be a problem for some buyers when they empty the containers. The plastic lining can get stuck in their processing equipment. A beeswax lining may be an alternative solution.

Figure 7: Pictures of an IBC, steel drum and bucket

 

Sources: AB’s Honey and Anel, 2023 

Unit size 

Most European buyers of bulk honey prefer larger containers, such as 210 litre drums or 1,000 litre IBC containers because they use heavy equipment, such as forklift trucks, to move them efficiently. Note that the requested unit size affects container options. It can also be cheaper to use larger containers, so be aware of this when discussing the unit size with the buyer. 

Information 

Information about the product and handling of the product has to be visible on the outside of the packaging. You have to comply with the labelling guidelines, following the European regulations for labelling foodstuffs. 

• Honey (quality of honeys listed below requires specification)
• Net quantity (litres)
• Best before date (best before dd-mm-yyyy or yyyy)
• Storage conditions (e.g. do not expose to high temperatures, keep out of direct sunlight, moisture level)
• Country of origin
• Company name and address
• Lot marking (identification code of batch; L XXX)

If your honey is one of the following, it is mandatory to list it as such:

• Filtered honey:   Honey that has mostly had pollen removed by taking out foreign materials.
• Comb honey:     Honey stored by bees in combs, sold in sealed whole combs or sections.
• Chunk honey:     Honey that contains one or more pieces of comb.
• Baker’s honey:   Lower-quality honey with an HMF content higher than 40mg/kg. 

If you ship Baker’s honey, you must list it as ‘Baker’s Honey – intended for cooking only’. 

Sustainability 

Consider using recycled, reusable or recyclable packaging and minimising the use of plastic and resource-intensive materials. The EU’s Circular Economy Action Plan aims to reduce plastic and waste. European businesses are under pressure to align with sustainability goals through targets and policies, and they are influenced by buyer preferences. In the coming years, it is expected that new restrictions on the use of plastic will follow. Spain, for example, introduced a plastic tax on non-reusable plastic packaging. Accordingly, it is best if you do not wrap your contained goods with plastic. 

You should not pack your honey in used containers either because this may lead to contamination, except when the containers previously contained honey or other products that do not contaminate honey. 

9. Use the support of organisations that can help to organise your exports

Seek support from relevant agencies and organisations to increase your success in exporting to the European market. Engaging in export promotion programmes and working with industry groups will improve your exporting activities. It is highly recommended that you join these programmes if you can. This will help you improve your knowledge of trading with European partners. Some programmes also help with setting up networks and connecting with buyers. 

Some of the organisations that can provide information or help: 

European government agencies

• CBI – the Centre for the Promotion of Imports from Developing Countries is a Dutch governmental agency that assists exporters in developing countries who want to enter European markets for export. They offer coaching, trade fair visits, training and market studies to help exporters access European markets. 
• IPD – the Import Promotion Desk supports importers and tour operators find overseas business partners, opening up new supply sources for them in selected developing countries and emerging markets. The IPD facilitates access to the EU market for small and medium-sized enterprises (SMEs) in the partner countries. 
• OTGS – Open Trade Gate Sweden supports companies from developing countries to export to Sweden and the European Union. They assist exporters in understanding rules and procedures, as well as providing them with market information. 
• SIPPO – the Swiss Import Promotion Programme’s overall objective is to integrate developing and transitioning countries into global trade by advising and supporting business support organisations. 

Non-government agencies

• ITC – the International Trade Centre is a development trade agency that offers informative articles and studies, such as ‘How to Access Trade Finance’ and ‘Model Contracts for Small Firms’, practical courses through the ITC SME Trade Academy, and advisory services. 
• COLEAD – the Committee Linking Entrepreneurship-Agriculture-Development is a European-based organisation that promotes sustainable and inclusive agricultural trade and development. The organisation provides a variety of services, including technical assistance, market access and development, standards compliance, institutional strengthening, networking and advocacy. 

You can find more support organisations by looking for government trade agencies in both the destination country and your own. For example, the Nigerian Investment Promotion Commission provides support for Nigerian entrepreneurs looking to export their products.

Figure 8: Logos of different support organisations

Source: Various, 2023

ProFound – Advisers In Development carried out this study on behalf of CBI.

Please review our market information disclaimer.