These terms may prove useful for those seeking to trade with us.
ASWP – An acronym standing for the term ‘Any Safe World Port’, which is used to indicate that delivery, can be made to any safe port that the buyer designates. These are the biggest and popular ports.
BCL – Bank Capability Letter, or alternately Bank Comfort Letter. This is a letter issued to the seller by the buyer originating from the buyer’s bank which indicates that the seller is able to cover the total cost of purchasing the sugar.
CIF – Cost Insured Freight. Sugar sold with a CIF agreement is insured by the seller on behalf of the buyer, and the freight of the sugar is included in the total cost. This coverage is in place from the time of leaving the buyer’s hands, during the entire length of transport until such time as the sugar arrives in port.
Ocean Bill Of Lading – This is the contract that sets out the terms of transport between an international carrier and an exporter. The contract is generally set out by the international carrier and issued when the shipment has been received and is on board a vessel. The bill of lading stipulates which vessel the shipment is aboard, and the destination of said vessel. It also states any additional terms and conditions under which the international carrier has accepted the shipment for transport. The ocean bill of lading comes in two forms and can be either negotiable or non negotiable.
Non negotiable bills of lading are the simplest form, and are comprised of an agreement for the carrier to deliver the named shipment to a specific consignee at a specific destination, both of which are named in the bill of lading, pending payment of transport fees.
Negotiable bills of lading are somewhat more fluid, and the destination and consignee can be changed by the shipper. Negotiable bills of lading are normally required when payment is being made via banking channels using, for example, a letter of credit or documentary collection.
Draft Contract – As the title suggests, a draft contract is a preliminary contract that is sent from the seller to the buyer and is subject to the buyer’s consideration.
Formal Contract – Following on from the draft contract, the formal contract is the final contract where both parties have agreed upon the terms.
(LOI) Letter Of Intent / (ICPO) Irrevocable Corporate Purchase Order -These are documents outlining the intended transaction between the buyer and the seller.
Prime Bank – A now outmoded term which describes an international bank that is well known and has good standing (Barclays, HSBC, etc). Now often called ‘money center’ banks.
Proforma Invoice – A proforma invoice is a quote that can be verified by an existing published price list which facilitates prepayment. This document is of use to corporate buyers who will need to consult with accounting departments in order to obtain prepayment for goods. The invoice contains details of the intended sale including specifics such as the intended date of shipping, quantities, price, and destination port. This invoice is generally effective for a period of sixty (60) days.
SGS Inspection – This is an inspection carried out by SGS, who are widely regarded as being the best inspection company in the world. SGS offers many services, including inspections, testing, and certification. Buyers normally prefer to have sugar inspected, tested and certified by SGS prior to purchase as a means of verifying the quality of the product they will receive.
Letter Of Credit (LC) - A letter of credit is a legal document which is issued by the buyer’s bank which allows payment to be made with the presentation of stipulated documentation. This letter is a guarantee from the buyer’s bank that payment will be made upon receipt of proof that terms and conditions of trade have been met. Making payment by letter of credit affords protection for both seller and buyer, as goods must be shipped before payment is made by the buyer, and as long as the shipment is sent according to the terms of trade, then payment will be made to the seller. There are many different types of letters of credit, as laid out below.