The weakness of sterling against other global currencies is creating export opportunities, but businesses are being warned to approach these with caution.

The British Chambers of Commerce (BCC) believes that there are benefits to seeking foreign markets in the current environment, but any exports should be carefully considered and very well researched before being undertaken.

John Dunsmure, md of BCC, said: “The weak sterling does traditionally open the door to export opportunity. We are hearing from businesses that falling global demand has had an impact on international orders but the opportunity is still very significant. However, businesses turning to export while times are tough at home should tread carefully.

“It’s all too easy for overseas orders to turn sour if you don’t know the market. Every opportunity must be properly assessed, looking at everything from shipping costs to local regulations, to ensure that a profit can be made and identify any longer-term potential.”

Davis (Louth) Ltd has been exporting for a decade and has long-established clients in the Middle East as well as Europe. Managing director Peter Davis warns of problems with getting credit insurance and warns would-be exporters of scams.

He said: “I have seen several companies go for the export market because they have been contacted by a foreign company and when they have checked them out everything has seemed fine, so they sent the produce but were never paid. Of the three companies I know this has happened to, two went bust.”

This sort of scam has been found in Italy and Russia and involves a person working with no more than a phone and a fax machine, having stolen a company’s letterhead.

Apart from such illegal activity, Davis warns that any potential senders should be prepared for long payment terms in Russia. He said: “We used to get 50 per cent payment on departure and 50 per cent on arrival. Now it is taking six or seven months to get payment.”

Rob Burrow, market information manager at the British Potato Council, believes that opportunities opened up in current market conditions can bring long-term gain, however.

He said: “About 80 per cent of British potato exports are to the Canary Islands and Ireland, and from the comments that exporters have made to us, the trade is seeing an uplift in volumes this year. The weak sterling is definitely an opportunity for exporters and any new business made in periods like this, in my experience, can lead to long-term contacts for the future.”

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