What does Free on Board (FOB) mean?

FOB is the most common Incoterm in green coffee trading. The seller gets the coffee to the named port and loads it onto the vessel - once it crosses the ship's rail, risk and all freight costs from that point transfer to you.

A price quoted "FOB Mombasa" or "FOB Santos" includes everything needed to load the coffee at origin: the cost of the coffee itself, inland haulage to port, export clearance, and port handling charges. What it doesn't include is the ocean freight to your country, marine insurance, import duties, or anything on your side of the journey.

FOB is useful because it creates a clean, comparable benchmark. When you're looking at two coffees from different exporters - one quoting FOB Mombasa, one quoting FOB Djibouti - you can add the same freight and insurance costs to both and compare them on an equal footing. Most of the green coffee pricing you'll see on offer sheets and in futures markets is quoted FOB.