1.

Prepare export proposal

a. Identify the Objectives: selling products.
b. Know the customer: ABC Trading Co., Ltd. (Japan).
c. Preparation of issues related:
● Product:
- Commodity: Robusta Coffee.
- Quantity: 1000 tons.
- Quality: As sample agreed by two parties.
● Selling price:
- Selling price: 1,650 USD/MT FOB Saigon port.
- Buying price: 32,000,000 VND/ton (includes packaging fee and inland
freight to Saigon port).
● Transport:
- Term of sales: FOB, Saigon Port.
- Time of delivery: Before December 10th, 2021.
● Payment: L/C time draft, 03 months after receiving goods.
d. Profit and Loss:
● Total revenue: 1,650 USD/MT x 1,000 = 1,650,000 USD
● Total cost:
Buying price: 32,000,000 VND/MT
Financial fee (interest rate): 32,000,000 VND/T x 3 x 0,7% = 672,000 VND
Total cost per unit: 32,000,000 + 672,000 = 32,672,000VND = 1,402.3 USD
Total cost: 32,672,000 x 1,000 = 32,672,000,000 VND = 1,402,231.76 USD
● Total profit:
Total profit per unit: 1,650 - 1,402.3 = 247.7USD/ MT
Total profit: 247.7 x 1,000 = 247,700 USD
● Exchange rate of export (Re):
Re = Total cost per unit (VND)/Total revenue per unit (USD)
= 32,672,000VND/1,650 USD
= 19,801 VND/USD < Rc = 23,300 VND
2. The buyer proposes the price lower than USD 1,600/MT FOB Saigon port,
and L/C 06 months after receiving goods . How about ZOPA in this case? How
to create value to exchange in this deal?
Total cost:
Total cost per unit:
Buying price: 32,000,000 VND/MT
Financial Fee (Interest rate 0,7%/month) = 32,000,000 x 0,7%x 6 = 1,344,000 VND
=> Total cost per unit = 32,000,000 + 1,344,000 = 33,344,000 VND= 1,431.07 USD
=> Total cost = 1,431.07 x 1000 = 1,431,070 USD.
The seller sells Robusta coffee for a minimum price of $ 1431.07/MT, while buyers
are willing to buy for lower than $ 1600 / MT. So, Zone of Possible Agreement
(ZOPA) in this case is $1431,07 - $1600.

How to create value to exchange in this deal?

Discount: Discount for buyers if buyers buy in large quantity, which can increase
sales and profits, buyers can buy at a lower price.
Maximum discount of 10,56%:(1,600-1,431.07) / 1,600 = 10.56%
Delivery time: Earlier time of delivery
Payment period: If buyers pay in advance, pay at sight or pay early, the seller will
accept a certain discount. If the buyer accepts the higher price offered by the seller,
the seller may accept a longer payment period
3. As the seller, prepare an export proposal to get a profit of at least
USD120/MT.

a. Identify the Objectives:

- Get profit more 120/MT

b. Know the customer Partner: ABC Trading Co., Ltd. (Japan)

c. Prepare key point Product:
- Commodity: Robusta Coffee
- Quantity: 1,000 tons
- Quality: As sample agreed by two parties
- Price:
● Financial fee (interest rate): 32,000,000 x 3 x 0,7% = 672,000 VND
● Buying price: 32,000,000 VND/ton (includes packaging fee and inland freight
to Saigon port)
=> Total cost per unit: 32,000,000 + 672,000 = 32,672,000VND = 1,402.3 USD
● So to get the profit at least 120 USD/ MT
=> Selling price: 1,402.3 + 120 = 1,522.3 USD/ MT
- Term of sales: FOB, Saigon Port
- Transport:
● Mode of transport: vessel
● Time of delivery: Before 20 December 2019
● Term of delivery: FOB, BNEX has to deliver coffee to Saigon port and be
responsible for the risks of cargos until the coffee is on vessel board at Saigon
port.
- Port of loading: Saigon port
- Payment:
● Method of payment: L/C time draft, 03 months after receiving goods
● Terms of payment: Deferred Payment.