The picture “The Main Port, Cartagena, Colombia” by Reg Natarajan is protected underneath Attribution 2.0 Generic (CC BY 2.0).
FOB, that stands for “free on board,” is a tenure that’s bandied about utterly openly by these digital pages, mostly but definition.
Yet for as common as a tenure is as a cost metric for immature coffee exchange — generally as a specialty coffee attention gravitates towards some-more tolerable sourcing and cost transparency — it’s also ordinarily misunderstood.
For starters, FOB is not by any means a loyal illustration of prices paid to coffee farmers. However, given it relates to sea burden shipping and is found on scarcely each immature coffee agreement between buyers such as importers and sellers such as exporters, it is one of a usually reasonable price-comparative collection during a coffee industry’s disposal.
But did we know that it’s also strictly an Incoterm, partial of a copyrighted collection of terms determined by a International Chamber of Commerce to emanate a common denunciation for general trade?
For this explanation and others about FOB, we spin to a latest part of Coffee Economics with Karl, featuring Karl Wienhold of a Colombian coffee trade association Cedro Alto.
Said Karl, “For folks that are some-more into coffee than general shipping, we done this video as an introduction to a concepts described by incoterms, including FOB. We explain what accurately is meant by a ‘FOB price’ in a coffee supply sequence and hopefully bust some misconceptions about what a FOB cost for immature coffee means and doesn’t mean.”
For some-more in a Coffee Economics with Karl series, check out:
- What is Coffee’s Farmgate Price, Really?
- Coffee Economics with Karl: A Better Understanding of ‘Farmer Price’
- Coffee Economics with Karl: Currencies and Exchange Rates
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