Incoterms for Spice and Coffee Buyers: FOB, CFR, CIF and DAP Explained
Incoterms 2020 explained for spice, coffee and pulse buyers — who pays for freight, insurance and duties, where risk passes, and which terms suit first-time importers.
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Incoterms decide who pays for what and when risk passes from seller to buyer. Getting them wrong can mean surprise costs or uninsured cargo.
The terms you'll see most
| Term | Seller pays | Risk passes |
|---|---|---|
| EXW | Goods ready at the warehouse | At the warehouse |
| FOB | Export clearance and loading on the vessel | On board at the port of loading |
| CFR | FOB plus sea freight to your port | On board at the port of loading |
| CIF | CFR plus minimum cargo insurance | On board at the port of loading |
| DAP | Delivery to your named place | At your named place (duties on you) |
Which to choose
- First-time importers: CIF or CFR is simplest, because the seller books the freight
- Buyers with a forwarder: FOB gives you control of freight cost and schedules
- Want door delivery? DAP, but you still handle import clearance and duties
Watch out for
- CIF insurance is minimum cover, so consider topping it up
- Risk passes at loading under FOB, CFR and CIF, even though the seller pays freight under CFR and CIF
- Destination charges (terminal handling, delivery) are usually yours
Example
A buyer in Hamburg buys pepper CIF Hamburg. We ship from Kochi and pay freight and insurance, and the buyer pays destination charges, duties and delivery to their warehouse.
See our export & shipping page.
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