Procedures and Conditions for Selling ICUMSA 45 Sugar
This document provides a step-by-step guide to facilitate understanding and execution of ICUMSA 45 sugar transactions.
Accepted Payment Guarantees
- Transferable/Non-Transferable SBLC (Top 50 Bank):
- Transferable and non-transferable, issued by a Top 50 global bank.
- Fund Blocking/Bank Guarantee:
- Guarantee in the buyer’s account in favor of the seller or their fiduciary, via MT760.
- Cash Deal:
- 30% deposit and 70% balance upon BL/SGS issuance.
- Transferable DLC/LC:
- Irrevocable, confirmed, auto-renewable for 12 months.
- Escrow Account in Swiss Bank:
- Account in REYL & Cie SA or Intesa Sanpaolo SpA, no LC/SBLC required.
General Payment Conditions
- Payment instruments must name our company or fiduciary as the first beneficiary.
- Issued by Top 50 global banks.
Payment Release
- Buyer pays via MT103/TT against official shipping documents, including BL and SGS report at the loading port.
Notes
- Only SGS inspection at the loading port is accepted for payment release.
- CIQ inspection at the destination port is not accepted as a payment condition.
Procedures
- CIF Procedure (Incoterms 2020):
- Buyer pays via MT103/TT within 3 banking days against official shipping documents at the loading port.
- FOB Procedure (Incoterms 2020):
- Buyer pays via MT103/TT within 3 banking days against official documents at the loading port.
- Sugar Shipments by Containers:
- Annual contracts only, minimum 10 FCL x 12 months, cash deals 40%/60% at the loading port.
Detailed Procedures by Payment Guarantee Type
- Transferable/Non-Transferable SBLC:
- Buyer sends LOI and ID of the signatory.
- Seller sends FCO to the buyer.
- Buyer returns FCO with ICPO via corporate email.
- Seller sends draft SPA to the buyer.
- Within 48 hours, buyer signs SPA and sends required documents.
- Seller signs SPA and sends proforma invoice.
- Buyer returns signed proforma invoice with RWA issued by buyer’s bank.
- Within 7 business days, buyer issues financial instrument draft to seller.
- Seller validates draft with fiduciary.
- Within 10 days, buyer’s bank sends SWIFT MT760.
- Delivery starts within 35-40 days after financial instrument is opened.
- Payment is released within 3 business days after receiving shipping documents including SGS report.
- Fund Blocking/Bank Guarantee:
- Similar procedure to SBLC, but SWIFT message is MT760 for the bank guarantee.
- Cash Deal:
- Buyer sends LOI and ID of the signatory.
- Seller sends FCO to the buyer.
- Buyer returns FCO with ICPO via corporate email.
- Seller sends draft SPA to the buyer.
- Within 48 hours, buyer signs SPA and sends required documents.
- Seller signs SPA and sends proforma invoice.
- Within 5 business days, buyer makes a 30-40% deposit.
- Balance is released within 3 business days after receiving shipping documents including SGS report.
- Transferable DLC/LC:
- Similar procedure to SBLC, with LC issued via MT700 instead of MT760.
- Escrow Account:
- Buyer sends LOI and ID of the signatory.
- Seller sends FCO to the buyer.
- Buyer returns FCO with ICPO via corporate email.
- Seller sends draft SPA to the buyer.
- Within 48 hours, buyer signs SPA and sends required documents.
- Escrow agreement is signed between bank, seller, and buyer.
- Buyer transfers one month’s face value purchase to the escrow account.
- Delivery starts after funds are in the escrow account.
- Payment is released within 3 business days after receiving shipping documents including BL and SGS report.
Note for Intermediaries and Brokers
- A maximum of 9-10K commissions above net prices are accepted.
- Complete identification of all intermediaries is required before the transaction.
Latest News
- Non-transferable SBLC accepted only from Top 50 banks.
- Increased ICUMSA 45 sugar allocation by 1 million metric tons.
Typical Timeline in Days
- Timeline varies based on order parameters (quantity, destination, loading time, weather, and maritime conditions).
Procedures and Conditions for Selling ICUMSA 45 Sugar
1. Preparation Phase
Market Research:
- Check current global market prices for sugar.
- Define your demand and ensure readiness to issue financial instruments such as SBLC or LC from top 50 banks.
Document Preparation:
- Prepare a Letter of Intent (LOI) and Identification (ID) of the signatory.
2. Initial Contact
Send ICPO:
- The buyer sends an Irrevocable Corporate Purchase Order (ICPO) with the buyer’s company’s letterhead, duly signed and stamped.
3. Offer and Negotiation
Receive FCO:
- The seller sends a Full Corporate Offer (FCO) to the buyer.
Draft Contract:
- Both parties negotiate and sign the draft Sales and Purchase Agreement (SPA).
- Buyer provides proof of funds (POF) and identification documents.
4. Contract Finalization
Sign SPA:
- The buyer and seller sign the SPA, including an RWA (Ready, Willing, and Able) letter issued by the buyer’s bank.
5. Financial Instrument
Issue Financial Instrument:
- Buyer issues the financial instrument draft (SBLC or LC) within 7 business days.
- Seller validates the draft with a fiduciary firm.
SWIFT Message:
- Buyer’s bank sends a SWIFT MT760 or MT700 message to the seller’s fiduciary bank.
6. Shipment and Payment
Delivery:
- Delivery starts within 35-40 days after the financial instrument is opened.
Release Payment:
- Payment is released by MT103/TT within 3 business days after receiving shipping documents, including BL and SGS report, at the loading port.
7. Additional Considerations
Inspection:
- Only SGS inspection at the loading port is accepted for payment release. CIQ inspection at the destination port is not accepted.
Intermediaries and Brokers:
- Commissions are accepted up to 9-10K above net prices, with complete identification required before the transaction.
Summary of Key Points
- Ensure all financial instruments are issued by top 50 global banks.
- Use escrow accounts in Swiss banks if necessary, without requiring LC/SBLC instruments.
- Adhere to the timelines for issuing drafts, SWIFT messages, and delivery schedules.
Detailed Step-by-Step Guide for Purchasing ICUMSA 45 Sugar
1. Preparation Phase
Market Research:
- Check current global market prices for sugar.
- Define your demand and ensure readiness to issue financial instruments like SBLC or LC from top 50 banks.
Document Preparation:
- Prepare a Letter of Intent (LOI) and Identification (ID) of the signatory.
2. Initial Contact
Send ICPO:
- The buyer sends an Irrevocable Corporate Purchase Order (ICPO) with the buyer’s company’s letterhead, duly signed and stamped.
3. Offer and Negotiation
Receive FCO:
- The seller responds with a Full Corporate Offer (FCO), including detailed company information and banking details.
Proof of Funds:
- The buyer sends a Ready, Willing, and Able (RWA) letter directly from their bank to the seller’s bank to demonstrate financial capability.
Draft Contract:
- The seller issues a draft Sales and Purchase Agreement (SPA) that outlines all terms and conditions of the transaction.
4. Contract Finalization
Review and Sign SPA:
- The buyer reviews and signs the SPA, then returns it to the seller.
- The seller reviews and signs the SPA, then sends it back to the buyer along with a proforma invoice for final acceptance.
5. Financial Instrument
Issue Financial Instrument:
- Buyer issues the financial instrument draft (SBLC or LC) within 7 business days.
- Seller validates the draft with a fiduciary firm.
SWIFT Message:
- Buyer’s bank sends a SWIFT MT760 or MT700 message to the seller’s fiduciary bank.
6. Shipment and Payment
Delivery:
- Delivery starts within 35-40 days after the financial instrument is opened.
Release Payment:
- Payment is released by MT103/TT within 3 business days after receiving shipping documents, including BL and SGS report, at the loading port.
7. Additional Considerations
Inspection:
- Only SGS inspection at the loading port is accepted for payment release. CIQ inspection at the destination port is not accepted.
Intermediaries and Brokers:
- Commissions are accepted up to 9-10K above net prices, with complete identification required before the transaction.
Warehouse Visit:
- The buyer may be invited to visit the warehouses to verify stock, documentation, and product collection as agreed in the SPA.
Commodity Classification
Energy:
- Includes oil, coal, natural gas, etc.
Industrial Metals:
- Copper, nickel, zinc, etc.
Agricultural Products:
- Wheat, corn, soybeans, and livestock.
Grains:
- Soy, wheat, corn, rice, oats, etc.
Livestock:
- Beef, pork, chicken, etc.
Soft Commodities:
- Cotton, cocoa, coffee, etc.
Summary of Key Points
- Ensure all financial instruments are issued by top 50 global banks.
- Use escrow accounts in Swiss banks if necessary, without requiring LC/SBLC instruments.
- Adhere to the timelines for issuing drafts, SWIFT messages, and delivery schedules.
Address for World Trade Products Africa
Unit 1 Floors, Brand Street, Langebaan Industria, Langebaan, 7357, South Africa