What is an Incoterm?

Incoterms - International Commercial Terms - are a set of standardised rules published by the International Chamber of Commerce that define who pays for what, and who bears the risk, at each stage of an international shipment. They appear on every green coffee contract as a three-letter code followed by a named location: FOB Mombasa, CIF Rotterdam, DDP London.

The current version is Incoterms 2020, which contains eleven terms. Each one draws a clear line: on one side, it's the seller's cost and risk; on the other, it's yours. Understanding where that line falls - and what it means for your insurance, your freight arrangements, and your exposure if something goes wrong - is fundamental to buying green coffee confidently.

The most commonly used terms in specialty green coffee trading are FOB (seller loads at origin port), CIF (seller pays freight and basic insurance to destination port), DDP (seller handles everything including import duties), and increasingly FCA and CIP for containerised shipments.