Negotiating payment terms when importing olive oil

In brief. Payment terms balance the risk between buyer and seller. The healthy standard for exporting olive oil: 30% deposit on order + balance against documents, or a confirmed letter of credit (LC) on high-risk markets, backed by COTUNACE credit insurance. Open account (payment after delivery) is the riskiest mode for the seller.

Payment is the clause where buyer and seller have opposing interests: one wants to pay as late as possible, the other wants to be sure of getting paid. Good negotiation finds the balance — not the power struggle.

The main payment modes

Mode	Seller security	Buyer flexibility	When
Deposit + balance/documents	High	Medium	Healthy standard
Letter of credit (LC)	Very high (if confirmed)	Low (costly)	High-risk markets / first dealings
Open account	Low	High	Proven customers only

The standard: deposit + balance against documents

A 30% deposit on order commits the buyer and funds the start of production; the balance against documents (the buyer pays to obtain the documents of title to the goods) protects the seller. This is the most common and best-balanced compromise.

The confirmed LC: for high-risk situations

The letter of credit brings in the banks: the buyer's bank commits to pay against a compliant presentation of documents. When confirmed by a bank in the seller's country, it offers maximum security — at the cost of commissions and strict formalism (the slightest discrepancy blocks payment). Essential on markets such as Libya or when facing an unknown buyer.

COTUNACE: export credit insurance

COTUNACE credit insurance covers the risk of non-payment. Strongly recommended as soon as a sale is not fully paid in advance. Approval of the foreign buyer must be requested upstream — plan ahead.

The golden rule

Never ship a container without a firm order + 30% deposit + balance against documents (or confirmed LC) + COTUNACE. This discipline, even if it slows a first sale, prevents the most common outright loss in exporting: the unpaid invoice.

Box: buyer side / seller side

• Buyer side: a higher deposit is a lever to obtain a better price or longer terms. Paying in advance reassures the seller and can be traded.
• Seller/exporter side: never give up on payment security to win a sale. One unpaid invoice wipes out the margin of several containers.

FAQ

What is the safest payment mode for the exporter?

A letter of credit (LC) confirmed by a bank in the exporter's country: the bank guarantees payment against compliant documents. It is the safest but also the most costly and formalistic.

What does "balance against documents" mean?

The buyer only receives the documents allowing them to take possession of the goods (including the bill of lading) after paying the balance. This protects the seller without tying up the buyer too early.

Is a 30% deposit negotiable?

Yes, up or down depending on trust and the trade-off. A higher deposit can justify a better price; a lower deposit is offset by an LC.

What is COTUNACE?

The Tunisian export credit insurance body. It compensates the exporter in the event of non-payment. Buyer approval must be requested before the sale.

Should open account be avoided?

On a first order or with an unproven buyer, yes: you ship without any payment guarantee. Reserve it for long-standing customers.

How do you negotiate payment on a high-risk market?

Require a confirmed LC (Libya, unstable markets) and cover the balance with COTUNACE. Document the payment purpose precisely to avoid banking blocks (e.g. Russia).

---

Structure your first operation with confidence. Request a quote: we specify the payment terms suited to your case. Full method in the negotiation guide.