How Can I Obtain A Soft Quote?
A soft quote can be obtained by contacting us and outlining the details of your desired order. We will need information pertaining to the quantity of sugar required, the type of sugar required, the grade of sugar required, and any other requirements you may have. We will also need to know the intended destination port for shipment, and the type of payment you are prepared to make (Letter of Credit, etc) in order to provide a soft quote.
May I See Your Price List?
Unfortunately there is no price list available for viewing by potential buyers, simply because such a document does not exist. Sugar prices fluctuate daily due to the fact that sugar is a commodity freely traded on various global commodities markets.
The price of sugar is affected by many factors, such as the cost of oil, which greatly impacts on transportation costs. As sugar is sold CIF (Cost, Insurance, Freight), oil prices have an immediate effect on sugar prices.
The method of payment which a prospective buyer is prepared to use is also a factor in determining the price of sugar. Sellers like safe forms of payment, and not all forms of payment are created equal, so preference and lower prices are given to buyers who are willing and able to make payment according to the seller’s preferences.
What Is The Preferred Method Of Payment?
The preferred method of payment is a Bank Guarantee, however a Standby Letter of Credit or a Fully Funded Direct Letter of Credit are also acceptable. In all cases, the financial instrument must be issued or guaranteed by a Top 25 world bank. Letters of credit must be transferable, divisible, and payable on sight. If the sugar is to be shipped in installments, then the letter of credit must revolve to cover each subsequent shipment.
What Forms Of Payment Are Unacceptable?
Neither non transferable letters of credit and revocable letters of credit will be accepted as payment.
When Must Payment Be Made?
Payment becomes due upon delivery (however there is a guarantee in place in form of Stand by Letter of Credit way before first shipment takes place).
What Documentation Will Be Needed To Obtain A Firm Corporate Offer?
Several items of documentation will be required in order to successfully negotiate a shipment of sugar. The soft quote is the first piece of documentation the buyer will receive. If the terms of the soft quote are agreeable, then the buyer will be required to sign a NCND (Non Circumvention, Non Disclosure agreement). This document provides necessary protection to both the buyer and seller as they move forward in the trading process. A Letter of Intent (or Irrevocable Corporate Purchase Order – ICPO) is the first piece of documentation required from the buyer, and it should be accompanied by a Bank Comfort Letter – BCL. When these documents have been received and verified, a Firm Corporate Offer (FCO) will be issued to the buyer.
How Recent Must My Letter Of Intent Be?
In order to proceed in good faith, the seller requires that the LOI (Letter of Intent) is no more than ten days old.
Do I Need To Supply Bank Details With My Letter Of Intent?
Yes. The seller requires bank details to be submitted with an LOI / ICPO in order to conduct a soft probe of the buyer’s accounts. The soft probe is used to gather evidence that the buyer is able to cover the cost of the trade, and provides assurance to the seller that the proposed trade is viable.
The buyer’s Letter of Intent therefore must include bank details, authorization for a soft probe, and contact details for the buyer’s banking officer.
Why Does It Take So Long To Get A Firm Corporate Offer?
Buyers occasionally express frustration that obtaining a FCO is a lengthy process. In order to expedite the receipt of a FCO, the buyer should take care to provide all required documentation in a timely fashion. The seller will need time to assess the letter of intent, conduct a soft probe on the buyer’s accounts, and verify that the buyer is acting in good faith before they are able to issue a FCO. This should take about 2 working days.
Can I See SGS Reports Prior To Sending An LOI?
No, sellers do not supply SGS reports prior to opening negotiations. Proof of product is provided at a later state in the negotiation process. At the time that the seller requests a PoF (Proof of Funds) from the buyer’s bank, the seller will also provide a PoP, (Proof of Product.) These documents are handled bank to bank, not from the seller to the buyer or vice versa.
Who Pays For SGS Inspections, And Where Do They Take Place?
SGS Inspections are paid for by the seller, and are carried out at the port of loading.
Can I View Sugar Before Committing To Purchase?
In most cases no. This is because the sugar may very possibly not have been produced yet. Due to the nature of the sugar industry, it is not uncommon for sugar to be sold in advance of production. The seller will have a contract with a refinery to produce the sugar, and the sugar will be shipped to the buyer over a period of months. Unlike other commodities, it is highly unlikely that there will ever be a warehouse full of sugar simply waiting for a buyer. However, you can see it at loading time.
Can I Order a Trial Shipment?
Buyers are free to order any reasonable quantity of sugar they desire, however they should be aware that the seller will not regard any shipment as a ‘trial’ shipment, and that no extra sugar will be held in reserve for a buyer for subsequent orders. The price will be based on the ordered quantity.
What Is The Standard Procedure?
The standard sugar trading procedure is CIF, or Cost, Insurance, Freight. The seller must prepare the goods for shipment, pay shipping costs, pay insurance on the shipment, and also organize and pay for SGS inspections. Only after the sugar has been delivered does the seller receive payment for the shipment.
Can This Procedure Be Changed?
Generally speaking, no. The standard procedure is in place due to the fact that it is regarded as providing the highest possible levels of protection to both sellers and buyers.
I Am A Broker, How Will My Commission Be Secured?
All soft quotes include a broker fee of one dollar per metric ton. If you wish to charge a higher brokerage fee, you will need to double it and add it to the per ton price of the soft quote, as added commissions are shared between suppliers and brokers. For example, if you wish to be paid an extra dollar per ton, you will need to add two dollars per ton to the soft quote before presenting it to your client.
I Need Several Million Tons Of Sugar, Can You Supply Me?
Sugar is not usually sold in such large amounts because the cost is prohibitive. If you are in the unique position of having funds in place to cover the full amount of such an order, and can provide a Stand-By Letter of Credit (or Bank Guarantee) covering several months worth of shipments and thus guaranteeing payment to the seller, then please contact us to discuss your requirements.