A lack of available credit combined with excessive caution among financial executives are making life extremely difficult for companies looking to source and purchase fresh fruit and vegetables, according to a number of key players in the trade.
Speaking exclusively in the April issue of Eurofruit Magazine, one trader, who asked not to be named, said there was currently 'too much fear and prudence' among those running finance departments.
'Belts are being tightened, but those belts are far too restrictive,' he said. 'As credit limits are cut back and doing deals becomes more difficult, these people are increasingly reliant on the goodwill of their suppliers.'
Finding a means to overcome the issue of disappearing credit limits is difficult but not impossible. 'Like many in Europe, I'm no longer following my own company's official policy when it comes to ticking the box on a client's credit limit,' he revealed. 'Instead, I'm trusting my own instincts. Yes, risky, but as long as I ensure I'm dealing with people I know and trust, I believe everything will be fine.'
Renzo Piraccini, managing director of Italian company Apofruit Italia, confirmed there were increasing problems associated with credit access for Italian companies involved in production and marketing.
'The problem is particularly significant, because the country's fresh fruit and vegetable trade is particularly fragile and the majority of its companies in the short term have low market capitalisation and are in debt,' he told Eurofruit Magazine.
However, Mauro Stipa, export director at fresh produce packaging specialist ILIP, pointed out that, despite tension surrounding clients’ credit facilities, many service providers preferred to trust more in the information received from their own commercial networks rather than from credit insurers.
'We cannot and will not cut off supply to trusted clients simply because credit insurers undertake to downgrade ratings in certain market,' he insisted. 'Perhaps we’re taking risks in some cases, but at this time our customers are an asset we need to protect.'
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