We are always interested in buying White Refined Cane Sugar – Icumsa 45.

All Suppliers capable to supply goods must regster their willingness to do so by filling in and returning the general “OTS” (Offer to Sell). We will send you the form by email on request. The Offer to Sell is not legally binding. It only defines to imply that the supplier is offering goods in his possession and will supply such goods over a defined period of time for purchase consideration by us. If such purchase is attempted, it is subject to final contract.

All information given is strictly held confidential even against competing supplier unconditionally.

 Terms and Conditions when offering Sugar to us

(1) Only suppliers in possession of goods (owners) may apply to provide Offer to Sell
(2) We will only consider modes of delivery defined as FOB from named port of shipment or FAS, FCA and EXW offers.
(3) All offers must be assured for a minimum term supply.
(4) First delivery must be ready to be initiated 120 days or more, not less-after offer/contract is accepted.
(5) Seller’s offer is not legally binding and is subject to final contract
(6) Only PSI (Pre Shipment) Inspection considered at supplier expense – If supplier is not prepared to offer PSI inspection, cost fo the account of the buyer accepted upon further discount on initial price provided. ISO certifications are not accepted.
(7) Rules of Trade: English language, English Law in port or fully, UCP 600, Incoterms 2000, URC522 Collection.
(8) Offer to Sell is provided to us so that assurance of Supply is proven as being genuine. It is up to our own discretion to purchase the goods offered accordingly.
(9) Minimum lot must be offered; – Once such ofer to sell is accepted by us, we will buy such total lot assured as required within the period of time applied as needed, shipment per shipment at quantities requested.
(10) All other Terms and Conditions as apparent on Offer and final Contract.

 These are our buying procedures: 

a) Sellers sends us the offer
b) Contract is drafted and accepted
c) Documentary Letter of Credit is advised and accepted
d) Performance Guarantee is issued
e) Delivery of Documents at Sight
f) Collection of payment
g) Deal closed.

Send us your offer

If the above terms are acceptable please send your offer to:

email: info @ icumsa45.com
fax: +43-316-231-100021

Icumsa 45

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By Andrej Lavrenc – Independent commodity sourcing agent, and CEO of Raw Polymers Ltd.

Win The War Against Fraud

Buyers, sellers and brokers all share a common enemy: the scammer. With each passing year, scammers seem to become more ubiquitous, preying on the strong and the weak alike, and making off with billions of dollars of honest people’s money. This boom in fraudulent activity has occurred in direct proportion to the growth of the Internet. It is no secret that advances in communication technology have opened up the world for trading, and where the title of ‘broker’ was once highly esteemed and difficult to attain, now anyone with an Internet connection can call themselves a broker and start trading.

Hiding behind the anonymity of the Internet, registering sites for mere dollars at a time and creating convincing fronts for businesses which never existed, these scammers mean that the term ‘world wide web’ has never been more accurate. Like a literal web, unwary traders become tangled in seductive threads of lies and are bled dry by the more skillful predators.

As a modern broker, your success depends in large part on building a rock solid reputation for reliability and results. Repeat business is often the best business a broker can get, and it comes as a result of performing well for your clients who are paying you not just to find the right goods at the right price, but to protect their funds from scammers. When a broker is scammed, its not just the money risked on the trade that is lost, it is also a substantial amount of future earnings disappearing as clients lose faith and move on to more reliable brokers.

The good news is that even in today’s world of virtual trading, there are ways to keep things real. This booklet/site will teach brokers, sellers and buyers how to avoid scams and seal real deals which will ensure success and profitability for many years to come.

Who’s Who Of Fraud

The first step in avoiding fraud understanding it, which means also understanding who the players are. This section explores both sides of the fraud coin, offering insight into those that scam, and those who are scammed.

Who Are Fraud Victims?

Fraud victims are often portrayed as naive dull witted individuals who all but throw their money at any opportunity which comes along. This is a stereotype which scammers welcome, as nobody considers themselves a fool, which means that most people consider themselves immune to fraud from the outset. An arrogant trader who thinks he or she knows it all is one who is likely to be stung by experienced scammers who foster the arrogance, using it as a tool to keep the unwitting victim on the hook and in the dark.

It is very dangerous to look down on victims of fraud for a two reasons. The first reason is that the scammed victim could well be you one day if you are not careful, and two, whilst you are gloating and feeling superior, you are not learning from the other person’s mistakes, and are in fact, setting yourself up to fall into the same trap.

The reality is that every trader is a potential fraud victim, and it is the rare (and perhaps non existent trader) who has never been the victim of some fraud, be it minor or major. The old adage ‘pride comes before a fall’ is never more true than when it is applied to international trading.

Who Are The Fraudsters?

Being able to identify a fraudster is an invaluable skill, and one that will grow with time and experience. However even experienced traders can sometimes be taken in by a smooth talker with a slick pitch. An entire section has been devoted to the tricks of fraudsters, so that will not be dwelled upon too much here. Suffice to say, most scammers appear to be very personable people. It is their job to falsely gain the trust of unwitting victims, and many of them are very good at it indeed.

Scammers by Geography

Nigerian scammers have become well known even to non traders, and though I must caution that nationality is not evidence of fraud in itself, it is wise to thoroughly investigate trade leads and offers which emerge from Nigeria and other African nations. As China further develops into an economic superpower, similar scammers are emerging, as are many in Eastern European countries. There are certain commonalities in all these cases, the scammers come from countries which have seen severe economic repression, where making an ‘honest’ dollar is a far greater challenge than in other, more developed countries.

Organized Crime

Organized crime is quite commonly behind many scammers, which is a powerful reason to stay well clear of deals where you cannot identify all parties and sources. The consequences of becoming entangled which such groups and leaving oneself financially, or even physically vulnerable can be extreme. Traders should be aware that in some jurisdictions, organized crime may be integrated into the official bureaucracy and government offices, so additional care should be taken when dealing with business partners in unfamiliar jurisdictions. A trader should always research the unique climate of a new jurisdiction with regards to organized crime, amongst other things. Information on how to do this is provided in later sections of this guide.

Lone Wolves

Perhaps the most dangerous of all scammers, lone wolves are scammers who work alone or in small groups, disappearing completely once the fraud has been carried out successfully, then reappearing under a completely different guise weeks or months later. These scammers are exceptionally hard to catch because they are so independent with few ties, and also because they are often very good at what they do.

In general, scammers and fraudsters have no qualms about defrauding honest traders out of large sums of money. Many show sociopathic tendencies, knowing that what they are doing is wrong, but feeling no sense of guilt or remorse about it. To them, fraud is but a game, and like any game those better at it deserve to win. This can be disheartening for honest traders, but it is a reality in of the world of international business.

Tricks Of A Fraudster

Though fraud is ostensibly a commercial game, underlying all types of fraud are psychological games and tricks that lure the ‘mark’ into giving up their hard earned cash. Many brokers and traders think they are above such games, perhaps because they often use well known selling techniques in order to close deals themselves. A successful broker isn’t necessarily one who has the best trade leads, or even the best prices, it’s one who understands people and knows how to make them feel both excited about the deal that is being presented to then, and confident about committing large sums of their own money.

Scammers and fraudsters use the same techniques and tricks that honest salesmen, marketers, and yes, traders do in their day to day business. The only difference is that the scammer is far from honest. Fraudsters can make millions of dollars a year separating not fools, but overeager, greedy, and lazy people from their money.

Good fraudsters are charming, well mannered, personable people. It is not uncommon for victims of fraud to feel emotionally bereft after being scammed, because fraudsters inveigle their way the affections of the ones they are scamming and become a friend, perhaps even a confidant. The betrayal isn’t only fiscal, it is also personal.

Here are a few questions to ask yourself when dealing with a potential contact:

Do they often turn the conversation to personal matters?

Wanting to talk about you is not just the sign of a friendly person, it may also be the sign of someone trying to ‘profile’ you. The more a scammer knows about you, the easier it is for them to trick you. Scams are all about finding weak points and exploiting them. A single man’s weak points, or ‘buttons’ are quite different from those of a family man, or a married woman, and the scammer knows this and will often try to find out as much personal information about you as possible in order to create a tailored approach.

If you end up discussing how your children are getting along at preschool during the first phone conversation with a potential trading partner, be aware that you may be giving away vital information.. Though there are naturally friendly, chatty people out there, most brokers don’t have the time to talk about other people’s personal lives during work hours, and certainly not at the outset of a business relationship.

Remember, a scammer is trying to get to know you in order to form a rapport with you. They’ll be trying to identify your underlying belief systems, and discovering what makes you tick. Are you trying to support a growing family? Are you in the trading business for a quick buck? Are you an adrenaline junkie? Information that may seem innocent and irrelevant to you can provide a scammer with vital information.

By all means it is good business to develop a friendly relationship with one’s trading partners, but these sorts of relationships develop naturally over time, not in the first contact. Keep things professional, and not only will you be more efficient in your work, you will also be side stepping the potential scammer’s trap.

How do you feel when talking to this person?

Most people, and traders especially, are fairly good at judging people. In many senses, a broker lives and dies by his or her wits. Those who have been scammed often claim that they were suspicious at the outset, but allowed themselves to be lulled into a false sense of security. Don’t make that mistake. If you are suspicious at the outset, maintain your guard and make sure all procedures are followed to the letter, and your ‘homework’ is well done in terms of verifying contacts, goods, the vessel the goods are to be shipped on, every element of the deal. No matter how friendly you may feel towards a trading partner, it is always a mistake to take them at face value and omit to do the leg work which is required in every transaction.

Scammers often get away with fraudulent deals because the trader comes to trust them to the point where they don’t bother to do the essential groundwork which should be done when it comes to any deal. If you find yourself cutting corners, or neglecting to research the details of the trade, be warned that you could be the victim of a scam in very short order.

Are you excited and anxious when it comes to this trader and their proposed deal?

One of the oldest sakes tricks in the book is creating a false sense of urgency. The victim of a scam is whipped up into a frenzy by the scammer’s talk of limited time offers, high demand commodities, special invitations, and other such verbal traps which make the victim believe that not only is this the best deal they will ever get, they must take it now, now, now!

As a trader, you already know the value of being cool and calculating when it comes to business. Hundreds of thousands, even millions of dollars are often at stake, which is far too much money on the line for the trader to be making decisions based on emotion. If a potential partner tries these cheap tricks on you, it may be time to walk away, even if the deal is not a scam, this is not the way reputable traders do business. The global market is not a second hand car yard, and you don’t want to be dealing with people who use that sort of approach.

Does the deal have you slavering at the mouth?

Perhaps the main tool in the scammer’s arsenal is the victim’s own sense of greed. Every year, thousands of people loose millions of dollars chasing after ‘dream deals’. Scammers offer products at less than half their market value, explaining away the suspicions of the trader by claiming that the goods available because of seasonal excess, or because the original buyer fell through. No matter what a ‘trader’ tells you, remember that it is called a market value for a reason – that’s what a commodity is worth on the open market. Nobody in their right mind would sell anything for substantially less than the current going rate, and this is especially true in the world of international commodity trading. A private seller may discount a car or house because they need a quick sale, a reputable broker with access to the open market does not need to discount their product by large percentages, ever.

Advising against purchasing goods which are being sold for a fraction of their value seems so obvious as to be entirely redundant, but a large number of traders are suckered into scams this way because their greed takes over, and they trust the scammer because unlike them, he has done his homework and knows exactly what buttons to press, and they put their money, or perhaps worse, their client’s money on the line, and lose the lot. This can be a career ending mistake. Don’t make it.

Tools Of The Fraudster

In addition to the elements listed in the ‘Tricks of the Fraudster’ section, here are some additional tools that scammers often use.

Useless Documentation

It is surprising how much nonsense documentation is out there in the world of trading. Oftentimes these useless documents are the result of the desire of fraudulent or simply desperate traders to ’seal the deal’. The buyer thinks they are bound by documentation that actually has no legal standing or use whatsoever. Sometimes useless documentation arises when traders with experience in one commodity try to trade a new commodity without learning the protocols associated with that particular commodity. Be aware that every industry has their own standards, and every country has different rules which govern trading in their jurisdiction. Buyers, sellers, and brokers all need to educate themselves on the proper legal procedures for their industry and location.

Offshore Havens

Offshore havens are paradises for scammers, but also legitimate locations of business for those who wish to protect their assets. Offshore havens attract scammers due to the privacy they guarantee, and also through legal protections which are extended to offshore businesses operating in the haven. In many such jurisdictions, bank accounts are not able to be viewed or touched by third parties, even when the owner is being prosecuted for fraud.

The Broker as a Tool of Fraud

As a broker, one runs the risk of being put in the unenviable position of being simply used to commit fraud. Scam ’suppliers’ make offers which brokers then take to their clients without doing the necessary leg work to verify them. The upshot is an upset, defrauded client, and a broker facing legal action. Whilst it may be unfair to prosecute based on fraudulent intent, certainly brokers who allow their clients to be scammed are guilty of negligence.

Though the Internet is the source of many legitimate trade leads, it is also the source of dead ends and scams. Sometimes offers are posted on boards years after they have expired, in other cases, legitimate leads are tweaked to suit scam artists. All too often, eager traders pick up on these leads and present them to their clients as potential deals. The client, trusting the trader, makes a financial commitment, and subsequently loses their investment in very short order.

As a trader, it is your responsibility to be certain of the legitimacy of an offer before you present it to your client. Though verifying trade leads can sometimes be arduous, and the temptation to get the offer on the table before someone else does can be great, it is exactly these feelings that have allowed scammers to flourish in the new trading world.

The barriers to becoming a trader have fallen with the proliferation of the Internet and related technologies, and people who at one time would have been unable to conduct a career as a trader are suddenly able to wheel and deal with the best of them. The pond has become a great ocean teaming with small fry which predatory scammers feed upon and grow rich and fat whilst clients become disillusioned and promising trading careers are ruined.

The Number One Form Of Fraud

The major form of fraud taking place in international trading today is documentation fraud. It is quite common in many industries that the goods are never sighted by trader or buyer until after the transaction is complete, monies paid, and goods shipped. Though this may seem odd to the uninitiated, it is a successful method of conducting trading because the seller does not receive payment until after the goods are shipped. In an ideal world, this means that the seller must prepare the goods for shipment, have them inspected by independent inspectors, and then ship them before they collect payment, which they do so presenting the documentation from the inspections and shipping company. The financial instrument which allows this to occur is called a letter of credit.

A letter of credit is a document issued by the buyer’s bank which assigns the value of the letter to the beneficiary (the seller) upon presentation of documentation which confirms that the goods have been shipped to the buyer. However, if documentation is falsified by the so called seller, and the bank makes payment on the letter of credit, then the buyer can easily be out both the cash and the goods through no fault of their own. The reason for this is explained more thoroughly in the next section, ‘Letter of Credit Fraud’.

Remember that banks deal in documents, not goods. This means that a scammer who appears to have the right documentation can often make off with the proceeds of a Bank Guarantee or Letter of Credit before the poor victim even knows what happened.

Letter of Credit Fraud

Letters of credit provide great capacity for fraud because they are used in transactions where goods are not sighted directly by the buyer, and are often paid for after shipment, not upon receipt, thus trading globally provides great capacity for profit, but also great capacity for deception.

Letters of credit have proved to be one of the safer financial instruments, and have a long history indeed, however they are vulnerable to fraud due to the fact that they are entirely dependent on documentation. If documentation presented along with a letter of credit appears valid, then a bank will pay the amount stipulated on the letter of credit. If the transaction is later revealed to be fraudulent, the bank takes no responsibility for the buyer’s loss. In fact clauses in the Letter of Credit itself specifically absolve the bank of any responsibility for paying out

These clauses are outlined in the UCP 600, a document issued by the ICC (International Chamber of Commerce) which covers the Uniform Customs and Practice for letters of credit. This document is made up of several Articles which comprise the guidelines under which letters of credit are issued, used, verified and otherwise handled. Article 34 is a specific disclaimer which absolves banks of any responsibility in the event of document fraud.

UCP 600 Article 34: Disclaimer on Effectiveness of Documents

A bank assumes no liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any document, or for the general or particular conditions stipulated in a document or superimposed thereon; nor does it assume any liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods, services or other performance represented by any document, or for the good faith or acts or omissions, solvency, performance or standing of the consignor, the carrier, the forwarder, the consignee or the insurer of the goods or any other person.

Buyers should therefore be wary when it comes to issuing letters of credit, being aware that whilst there is a certain level of protection inbuilt into the letter of credit, an unscrupulous scam artist with well forged documentation can quite easily claim the full value of the letter of credit, leaving the buyer with no goods, and no legal recourse.

In many cases those perpetrating fraud into the millions are never caught. The money is sent to offshore sheltered accounts, and the scam sellers disappear underground. For this reason it is imperative that traders seeking to deal with sellers verify the authenticity and background of the seller. Scammers normally do not spend years building solid reputations simply to destroy them with one dirty deal, which means that a buyer can protect him or herself simply by researching a seller’s background, or a broker’s background if one is going through a trade intermediary. If there is little to no background, steer clear, at best this means that the trader or seller is inexperienced, at worst, they are a scammer.

A clear sign that a proposed transaction may be fraudulent is when a commodity is offered far below market value. Whilst it might be tempting to try and pick up a cheap deal often advertised as stock which has gone unsold after another buyer pulled out, or which was found to be surplus after a bumper crop, one must keep one’s head. Scammers often trap buyers by their greed, enticing them into deals that are quite simply too good to be true, and making off with their money whilst the buyer gets nothing.

This makes for a rather intimidating trading climate for some buyers. Realizing that they have little to no protection in the event of fraud, one might wonder how it is that more fraudulent activities are not reported. Indeed, the playing field seems skewed towards fraudsters, and banks, whilst happy to keep one’s money, are disinclined to safeguard funds when a letter of credit is presented.

However, doing a little research is an excellent way to protect oneself. Fraudulent documentation can be detected by doing a little research. Does the carrier exist? Can the reports be independently verified? Accepting things at face value without checking the veracity of claims is a surefire way to eventually become the victim of a scam, which brings us to our next section, preventing fraud.

Financial Instruments And Financial Instrument Fraud

The most secure form of financial instrument is a Letter of Credit, though even these are not entirely scam proof. A letter of credit allows a buyer to make a financial commitment to a deal and not expose themselves to financial loss without the seller first dispatching the goods. Letters of credit have been used for centuries, and are in many ways the backbone of international trade.

Bank Guarantees

Bank guarantees are riskier than letters of credit as they do not require documentation in order to be honored. A bank guarantee is simply a document which guarantees the beneficiary payment of a certain sum in the event of their client defaulting on a transaction. Banks are happy to issue bank guarantees as long as their client has sufficient funds in place, and once issued to a beneficiary, a bank guarantee can sometimes be used to fraudulently obtain funds.

Bank guarantee fraud also takes place in the reverse instance. In some cases, scammers issue fake bank guarantees as performance bonds, financial guarantees against loss on the part of the buyer. A fake bank guarantee is a serious matter indeed, and in many cases it is the innocent bearer of the bank guarantee who is prosecuted when it is found to be fake, not the scammer, who is long gone.

There are also instances in which bank guarantees are sometimes ’sold’ at a discount. This is a scam intended to trap the unwary trader who may not have the funds in place to arrange for their own bank to issue a bank guarantee. Along comes a brilliant offer, a bank guarantee selling for less than its stated value. This is a scam. Bank guarantees are not documents which can be sold or leased, they are issued from a bank on behalf of its client. The bank guarantee itself cannot be transferred to another party, though the proceeds may be assigned to another party. Simply put, the beneficiary of a bank guarantee can request that the proceeds of the bank guarantee be paid to another party, but they cannot assign the bank guarantee to another party who then draws on it.

For this reason, leased bank guarantees are also a scam. In both cases the unwary trader pays a substantial sum of money which represents a fraction of the alleged worth of the bank guarantee. The scam artist then makes off with the funds and the trader is left with nothing.

Long story short: Bank guarantees are not tradable items. Do not attempt to buy or lease a bank guarantee, you will be scammed.

When accepting a bank guarantee, one should exercise great care and caution. The first order of business must be to ensure that the bank guarantee is issued by one of the top 25 world banks. Small operations in tax havens often operate small banks, which are near impossible to hold to account if things go wrong. This also applies to small national banks, which, depending on their location, may be restricted in their ability to trade on a global scale. This is particularly an issue for USA based traders, as the patriot act forbids major US banks from dealing with many smaller offshore banking institutions. A bank guarantee issued from an unknown bank may be effectively worthless even if it is real.

Signs of Investment Fraud

Investment fraud is one of the most common forms of fraud because it is a nebulous area to begin with. Successful investing requires a shrewd understanding of markets, a knowledge and understanding of the field in which you are investing, the financial climate surrounding the industry, and other relevant factors pertaining to a particular investment. It is quite common for fraudsters to attempt to solicit investments from the unwary, claiming incredible returns in very short time frames.

The three main signs of fraudulent investment are:

Impossibly high returns.

If an investment is presented as an opportunity to triple your money inside a year or similar such glib claims, it is likely to be fraudulent. Fraudsters always appeal to the mark’s sense of greed, and will do their best to impress upon them how lucky they are to be offered such a special opportunity.

No risk.

Fraudsters will almost always claim that an investment is a ’sure thing’ with very low risk. In reality, the higher the possible returns, the higher the risk. High returns with low risk is a pipe dream.

Limited Time Offer.

Because the fraudster wants your money, and wants it now, they will not want you to go away and research the offer, nor will they want you to think about it. If this ‘excellent investment opportunity’ requires you to invest in short order (quite often then and there), then the savvy investor walks away.

What the fraudster is trying to do is first appeal to your greed, then reassure you that it is perfectly safe, then when you are hyped up and excited about the deal, get you to commit right away. The fraudster takes your money and is gone before you even realize that you’ve been had.

Keys To Fraud Prevention

You might be forgiven for feeling a little dismal about the world of international trading. Opportunities are rife for scammers, and legal recourse for those who are scammed is scarce. Too often scammers are never caught, or if they are, they simply serve their time and go on their merry way, living on the profits of their fraudulent transactions which are often sheltered in so called ‘tax havens’, which provide sanctuary not only from taxation, but also from legal proceedings. In many jurisdictions an entity can open a bank account or a trust which can then not be touched, even if the money is proven stolen in another jurisdiction. Because the cure is sometimes impossible to obtain, prevention is the key to avoiding fraud. Fortunately, legitimate brokers and traders have a wide range of weapons in their arsenal which can be used in the fight against fraud, they just have to make sure that they actually use them.

Know Your Market

In all things, knowledge is power. This is especially true when it comes to commodity trading. A successful trader needs to know much more than how to obtain an letter of credit and contact sellers and buyers, he or she needs to know the industry they are working with inside and out. If you are trading Brazilian sugar, for instance, you need to know and understand the Brazilian sugar industry. You need to be able to answer questions like:

What is Brazil’s production capacity?
Who are the major producers?
When is the peak season?
What are current market rates for Brazilian sugar?

Many get caught out in sugar scams because they are lured by promises of impossibly large shipments for ridiculously low prices. Many times the trader being scammed does not know that the shipment they are being promised is pure fantasy, because they do not understand the market.

For instance, take the following example. A scammer offers 20 million tons of Brazilian ICUMSA 45 sparkling white sugar.

Suzie Trader leaps at the deal, not knowing that shipments of millions of tons of ICUMSA 45 sugar are virtually impossible to obtain for a new buyer. In reality, Brazil produces relatively little ICUMSA 45, and the bulk of it is sold ahead of time to traders who purchase it on the futures markets. Small amounts of Brazilian ICUMSA 45 can occasionally be obtained if there is a surplus after harvest, but new entrants to the market will not be able to secure large shipments in their first foray into the market.

In spite of this being fairly common knowledge which can be obtained with just a little research, many people are scammed out of millions of dollars after attempting to buy several million tons of ‘discounted’ ICUMSA 45 Brazilian sugar.

Know The Price

All commodities have a price, and whilst small fluctuations occur, and discounts can be gained by purchasing in bulk, reputable traders still sell commodities at market rates. If the market rate for sugar is currently 10 cents a kilogram, offers selling sugar for 3 cents should be immediately discarded. Those who try and take advantage of such deals are usually the first ones to be taken advantage of themselves.

Scammers sometimes try to explain away the lowered price by claiming that another sale fell through, or that the material they are selling is ‘excess’. Don’t be fooled by such claims. Every commodity has a market value for a reason – there is a demand for it. If a supplier genuinely has a commodity in their possession which is worth a certain amount there is no way that they are going to contact an hitherto unknown trader and try to sell it to them at a reduced price. Think about it, if you had a car to sell, even if it was a spare car, would you sell a $50,000 machine for $500? No.

Google Is Your Friend

The Internet provides a vast resource for traders. Simply Googling the details of a potential trade can unearth useful and relevant information, and save a trader a great deal of wasted time and potential fiscal loss.

Then there are multiple forums where traders congregate and share tips and information. These places are veritable mines of information, and while none of it should be taken entirely at face value, it will point you in the right direction. These are excellent places to make new contacts and to deepen your understanding and knowledge of trading. Time spent learning more about your field is never wasted time, as even small snippets of information picked up in the course of conversation can prove to be invaluable later on.

Common Sense Is Your Ally

Tales of scams are sometimes as ridiculous as they are sad. In some cases, traders are lured to foreign countries under the pretense of ’seeing the goods’ themselves. Of course, they are also encouraged to bring with them cash to exchange for the goods. Those who take scammers up on these types of offers can quite often end up dead, killed for the cash they trustingly brought with them.

In today’s world, no trade should require you to carry large amounts of cash on your person at any time. The only possible reasons for anyone to do this are illegal ones. Cash is a means of avoiding the prying eyes of the law, and those who wish to avoid the eyes of the law are not the ones you want to be dealing with.

Don’t Be Afraid To Offend Your ‘Friend’

If a potential buyer or seller becomes offended because you background check them, their firm, and their credentials, it is wiser not to deal with them. The scammer will always try to develop a personal relationship with you in order to make you trust them. Your attempts to check them out independently will therefore be tantamount to betrayal of your new ‘friendship’. Remember that this is business, and that your money, your reputation and indeed your life could be at stake.

Those who take themselves seriously as traders do develop friendships and business relationships, but they do not allow them to supersede common sense. A reputable trading partner will not only not mind you investigating and verifying them, they may well encourage it, or provide references. Once again, these references should not be taken at face value, but should be investigated as well. Do the referees actually exist? Did the trades they claim to have undertaken with this person actually take place?

Being a successful trader is not unlike being a detective, and though it may be time consuming to delve into the backgrounds of new trading partners, it is infinitely more time consuming to be scammed.

Get Global

Becoming familiar with the country with which you are trading is also wise. Understanding business practices in the jurisdiction with which you are trading will help you evaluate whether your partner is acting in good faith, or if they are setting you up for a scam. There are variances from country to country.

Being familiar with the practices and laws of your trading partner’s country will also allow you to investigate them more thoroughly. The best way to learn about a country you wish to do business in is to contact your embassy in that country. Embassies are goldmines of ‘on the ground’ information, and they are usually pleased to assist citizens in their dealings with the foreign state.

As has been mentioned in previous sections, in some countries scams aren’t just run by small time scammers, they are run by large organized crime groups who can sometimes own entire banks. In these cases, a little research is not enough, because the corruption runs right up into governmental and commercial ranks. This does not mean that you have no recourse however, it simply means that your knowledge base needs to be wider than the one your potential trading partner provides you with. Contacting your embassy in the country can provide valuable help in avoiding these types of scams, as these crime syndicates are quite often well known.

What’s Their Feedback Like?

Who are you dealing with? Who else have they dealt with? Scammers often pull up stakes once they have defrauded one victim and move on, this means that they often do not have much, if any ‘back story’. If the person you are dealing with claims to be very experienced and well established in his or her field but nobody has ever heard of them before, a large red flag is raised.

A little like Ebay, good traders have lots of positive feedback, an independently verifiable reputation, and a public history. It is always more of a risk dealing with a ‘new’ trader than one who has already proven their reliability and expertise in other areas.

 Commodity Trading Manual

Until now very few books dealt with International trading, importing and exporting. Books on international trading or commodity markets are generally geared towards large corporate purchasing or export managers. Up untill now Intermediaries such as Export Trading Companies and Brokers had to individually learn a complex system of application involving the highest levels of International finance. Those without experienced mentors in the industry were utterly lost. 

Terminology

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20 years ago if a buyer wanted to purchase sugar from Brazil, he had to deal with one central selling agency. Now he can buy directly from the Brazilian sugar mills or even foreign companies (investment funds) who own large sugar allocations, etc. Today the buyer can build and run his own terminals, deal in Brazilian domestic market and even invest in the sugar production process. Admittedly it is risky and the risks have to be priced accordingly but the choice now exists where it did not before.

Better education as a result of increasing wealth in developing countries has increased the sophistication of both producers and consumers. Nowadays producers and consumers often take over the role of the traditional trade houses. Middle East sugar refiners are negotiating purchase contracts directly from Brazilian producers. Russian importers buy FOBs (free on board) and ship the sugar themselves. Brazilian producer groups deliver their sugar to the New York future exchange, etc. Nowadays everyone seems to be in the “Do it Yourself” sugar trading business. Naturally because of that the market is full of amateur traders, brokers, agents, even scammers who throw around prices as if they are selling cookies. It is often difficult to filter out the “noise” and find real suppliers.

95% of the enquiries we get are from “agents” who are just fishing for info (prices, suppliers, etc..) and have no intention or capability to actually purchase sugar. We don’t mind working with brokers but you have to follow procedure as outlined below. If you have to use us as your source of education, there is plenty of information published on this website and you are free to use it but please understand that we have to reserve our time for the real buyers and will not reply once we determine that you (or your buyer) cannot perform according to procedure specified below.

Sugar Ordering Procedures

(1) Quote is issued then returned filled in as accepted (Non legally binding)
(2) Offer is issued – which the End Buyer returns as accepted (Legally binding)
(3) Draft contract is issued/negotiated upon and returned as accepted.
(4) End Buyer issues Pre Advised Documentary Letter of Credit as per offer/contract
(5) Proof of Seller’s interests – verifications of goods advised as per contract
(6) Pre Advised Documentary Letter of Credit reverts to a fully active Documentary LC
(8) Performance guarantee is issued by the seller as per UCP600 Stand-by Letter of Credit rules.
(7) Delivery is initiated by document presentation as per offer/contract
(8) Collection is applied per each shipment until final delivery

Payment terms:

The Buyer shall open a UCP600 Irrevocable, Non transferable, Confirmed, Pre-advised Documentary Letter of Credit, payable 100% on sight, valid for the duration of the contract period for an amount in US dollars sufficient to cover one hundred percent of one month (100%). If multi shipments are advised, the the credit shall be opened as non cumulative, revolving.

Performance Guarantee:

(LDD) Late delivery discount to apply as a Performance guaranttee if delivery is late. P.G. LDD will be advised on offer and is enforced by the contract.

The above procedures and payment terms are the least expensive of all Documentary Letter of Credit applications. Once the pre-advised credit is opened and accepted, full proof of interest is advised which converts the credit into a full active instrument.

As you are aware a Documentary Letter of Credit (DLC) is financially worthless (it cannot be cashed) untill all the required delivery documents have been provided and accepted by your own bank issuing the credit.

Buy Sugar from us

Please contact us through this form below and let us know your detailed requirements.

Brazilian Sugar

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White sugar is refined sugar processed from the natural sugars which can be found in sugar beet or sugar cane. The industry name for the sparkling white sugar which is often known to consumers as ‘table sugar’, is ICUMSA 45. The name ICUMSA 45 is taken from the body which regulates sugar testing methods, known as the International Commission For Uniform Methods Of Sugar Analysis. ICUMSA testing allows suppliers and buyers to know with precision just how refined a sugar sample is, and provides an accurate rating system for trading sugar internationally. In most Western and developed nations, the only refined sugar approved for sale to the general public is ICUMSA 45 sugar. Other types of white sugar include ICUMSA 100 and ICUMSA 150, refined white sugars that lack the clear sparkling appearance of ICUMSA 45, but which are nonetheless still safe for human consumption.

Why White Sugar?

Since the time that effective sugar refining techniques were developed, white sugar has been a favorite of consumers and governmental regulating bodies alike. The main, and most practical reason for this is the fact that highly refined sugar is the safest type of sugar for consumers in terms of contamination levels and bacteria counts, having very low levels of both. The white coloration does not arise from additives or bleaches, but rather from the processes used to remove contamination from raw sugar, which is a deep brown color, and contains a great deal of undesirable elements, including high bacteria counts which can cause severe illnesses in humans.

How Is White Sugar Made?

White sugar is refined from raw sugar, which is usually extracted from sugar cane juice. Both sugar beet and sugar cane are natural sources of sugar, however sugar cane is more plentifully cultivated, and therefore most of the world’s sugar originates from this source.

Refined sugar is essentially pure sucrose, and there is very little difference between sugar extracted from sugar cane and sugar extracted from sugar beet. Only careful chemical analysis can determine whether a sugar sample was made from sugar beet or sugar cane, so practically speaking there is no difference between the sources.

Raw sugar is usually transported to the refinery, which may be in a different country from the mill in which it was produced. Some mills are also refineries however, and specific configurations differ from country to country, and facility to facility. When raw sugar arrives at a refinery, it can be in one of two forms. Most raw sugar products are now VHP raw sugar, processed raw sugar which whilst not being refined in the proper sense, contains a higher sucrose content and lower contamination level than traditional raw sugar. It is normally a light brown color, and can be refined in one step using a process called ‘carbonization’.

Carbonization involves dissolving the sugar into a liquid solution and then adding milk of lime. The milk of lime travels through the solution, forming calcium carbonate as it goes. As calcium carbonate forms it attracts the colorants and contaminants in the solution, and it locks them away as it falls to the bottom of the carbonization chamber. By the end of the carbonization process, all that is left in the sugar solution is water and sucrose. This solution is then boiled to remove the excess water, and the sucrose is crystallized.

If the refinery is working with raw sugar however, there is an additional step undertaken prior to carbonization. Called ‘affination’, this process involves the raw sugar being mixed with a high sucrose syrup to form a mix called magma. This magma is sent into a centrifugal chamber, a chamber which spins at very high speeds. As the magma is spun, it separates into liquid and solid components. The solid components are sucrose crystals, and the liquid is made up of everything else in the magma. The sucrose crystals still contain a level of contamination however, and are a brown color, but the bulk of the brown sticky mess which characterizes raw sugar is left in the liquid drawn off during affination, and is known as molasses.

The sucrose crystals are gathered after affination and then sent on to the next stage of the refining process, carbonization.

Is White Sugar Healthy?

White sugar is sometimes referred to as being an unhealthy food product because it is refined, and therefore falls into the ‘processed’ foods category. In many cases people misunderstand what this means and think that like other processed foodstuffs, white sugar has had dangerous chemicals added to it. This is of course, not the case. The refining process is designed simply to remove unwanted elements from raw sugar and to create a product which is as close to being pure sucrose as is possible.

Ironically, those who choose to use ‘brown’ sugar instead of white sugar do consume more additives, as most brown sugar is simply large crystal white sugar with colorants added. Brown sugar is not to be confused with consumable raw sugar, which is a brown color, but which usually has a completely different texture, ranging from crunchy to crumbly, and has a unique flavor which is due to the molasses still being part of the sugar. Consumable raw sugars do contain more healthy ingredients such as potassium, calcium, magnesium and iron, but they must also undergo various purification processes in order to make them safe for consumption.

 White Sugar Supplier

Please contact us and let us know your detailed sugar requirements and we will get back to you with product availability and price quotation shortly

Brazilian Sugar

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A soft quote can be obtained by contacting us and outlining the details of your desired order. We will need information pertaining to the quantity of sugar required, the type of sugar required, the grade of sugar required, and any other requirements you may have. We will also need to know the intended destination port for shipment, and the type of payment you are prepared to make (Letter of Credit, etc) in order to provide a soft quote.

May I See Your Price List?

Unfortunately there is no price list available for viewing by potential buyers, simply because such a document does not exist. Sugar prices fluctuate daily due to the fact that sugar is a commodity freely traded on various global commodities markets.

The price of sugar is affected by many factors, such as the cost of oil, which greatly impacts on transportation costs. As sugar is sold CIF (Cost, Insurance, Freight), oil prices have an immediate effect on sugar prices.

The method of payment which a prospective buyer is prepared to use is also a factor in determining the price of sugar. Sellers like safe forms of payment, and not all forms of payment are created equal, so preference and lower prices are given to buyers who are willing and able to make payment according to the seller’s preferences.

What Is The Preferred Method Of Payment?

The preferred method of payment is a Bank Guarantee, however a Standby Letter of Credit or a Fully Funded Direct Letter of Credit are also acceptable. In all cases, the financial instrument must be issued or guaranteed by a Top 25 world bank. Letters of credit must be transferable, divisible, and payable on sight. If the sugar is to be shipped in installments, then the letter of credit must revolve to cover each subsequent shipment.

What Forms Of Payment Are Unacceptable?

Neither non transferable letters of credit and revocable letters of credit will be accepted as payment.

When Must Payment Be Made?

Payment becomes due upon delivery (however there is a guarantee in place in form of Stand by Letter of Credit way before first shipment takes place).

What Documentation Will Be Needed To Obtain A Firm Corporate Offer?

Several items of documentation will be required in order to successfully negotiate a shipment of sugar. The soft quote is the first piece of documentation the buyer will receive. If the terms of the soft quote are agreeable, then the buyer will be required to sign a NCND (Non Circumvention, Non Disclosure agreement). This document provides necessary protection to both the buyer and seller as they move forward in the trading process. A Letter of Intent (or Irrevocable Corporate Purchase Order – ICPO) is the first piece of documentation required from the buyer, and it should be accompanied by a Bank Comfort Letter – BCL. When these documents have been received and verified, a Firm Corporate Offer (FCO) will be issued to the buyer.

How Recent Must My Letter Of Intent Be?

In order to proceed in good faith, the seller requires that the LOI (Letter of Intent) is no more than ten days old.

Do I Need To Supply Bank Details With My Letter Of Intent?

Yes. The seller requires bank details to be submitted with an LOI / ICPO in order to conduct a soft probe of the buyer’s accounts. The soft probe is used to gather evidence that the buyer is able to cover the cost of the trade, and provides assurance to the seller that the proposed trade is viable.

The buyer’s Letter of Intent therefore must include bank details, authorization for a soft probe, and contact details for the buyer’s banking officer.

Why Does It Take So Long To Get A Firm Corporate Offer?

Buyers occasionally express frustration that obtaining a FCO is a lengthy process. In order to expedite the receipt of a FCO, the buyer should take care to provide all required documentation in a timely fashion. The seller will need time to assess the letter of intent, conduct a soft probe on the buyer’s accounts, and verify that the buyer is acting in good faith before they are able to issue a FCO. This should take about 2 working days.

Can I See SGS Reports Prior To Sending An LOI?

No, sellers do not supply SGS reports prior to opening negotiations. Proof of product is provided at a later state in the negotiation process. At the time that the seller requests a PoF (Proof of Funds) from the buyer’s bank, the seller will also provide a PoP, (Proof of Product.) These documents are handled bank to bank, not from the seller to the buyer or vice versa.

Who Pays For SGS Inspections, And Where Do They Take Place?

SGS Inspections are paid for by the seller, and are carried out at the port of loading.

Can I View Sugar Before Committing To Purchase?

In most cases no. This is because the sugar may very possibly not have been produced yet. Due to the nature of the sugar industry, it is not uncommon for sugar to be sold in advance of production. The seller will have a contract with a refinery to produce the sugar, and the sugar will be shipped to the buyer over a period of months. Unlike other commodities, it is highly unlikely that there will ever be a warehouse full of sugar simply waiting for a buyer.  However, you can see it at loading time.

Can I Order a Trial Shipment?

Buyers are free to order any reasonable quantity of sugar they desire, however they should be aware that the seller will not regard any shipment as a ‘trial’ shipment, and that no extra sugar will be held in reserve for a buyer for subsequent orders. The price will be based on the ordered quantity.

What Is The Standard Procedure?

The standard sugar trading procedure is CIF, or Cost, Insurance, Freight. The seller must prepare the goods for shipment, pay shipping costs, pay insurance on the shipment, and also organize and pay for SGS inspections. Only after the sugar has been delivered does the seller receive payment for the shipment.

Can This Procedure Be Changed?

Generally speaking, no. The standard procedure is in place due to the fact that it is regarded as providing the highest possible levels of protection to both sellers and buyers.

I Am A Broker, How Will My Commission Be Secured?

All soft quotes include a broker fee of one dollar per metric ton. If you wish to charge a higher brokerage fee, you will need to double it and add it to the per ton price of the soft quote, as added commissions are shared between suppliers and brokers. For example, if you wish to be paid an extra dollar per ton, you will need to add two dollars per ton to the soft quote before presenting it to your client.

I Need Several Million Tons Of Sugar, Can You Supply Me?

Sugar is not usually sold in such large amounts because the cost is prohibitive. If you are in the unique position of having funds in place to cover the full amount of such an order, and can provide a Stand-By Letter of Credit (or Bank Guarantee) covering several months worth of shipments and thus guaranteeing payment to the seller, then please contact us to discuss your requirements.

If you have any further questions, feel free to contact us.

Terminology

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Setting the standard which other types of sugar are measured against, ICUMSA 45 sugar is the world’s leading consumer sugar. A highly refined sugar product, it is easily recognizable by its distinctive sparkling white color and pure sucrose taste. ICUMSA 45 is perpetually in high demand as it is the safest form of sugar, due to the fact that the refining process by which it is created removes the bacteria and contaminants often present in raw sugars which can pose a threat to human health.

But what does ‘ICUMSA 45′ actually mean? ICUMSA is an acronym for the International Commission For Uniform Methods Of Sugar Analysis, an international regulatory body which sets the standard for sugar analysis tests thereby creating a system which can be used anywhere on the globe to accurately and quickly describe the properties of sugar. This is an essential system due to the fact that the sugar trade is a global one, and often buyers and sellers will be operating in completely different parts of the world, not to mention sometimes contending with a language barrier which can complicate negotiations. The ICUMSA ratings method allows a meaningful and accurate description of the product which can be easily understood by interested parties no matter where they come from.

ICUMSA Ratings

ICUMSA ratings are based on a test which determines the precise color of the sugar and communicates this in a numerical reading. This test works because the color of sugar is directly related to how much refining it has undergone. Raw sugar is very dark in color, whereas highly refined sugar is the familiar sparkling white color most often associated with sugar.

The ICUMSA test is carried out with an instrument called a tristimulus colorimeter. This is a machine that fires various wavelengths of light at the sugar sample, and detects which were absorbed by the sugar sample, and which were reflected back. Dark colors absorb a great deal of light, whereas light colors absorb very little. For this reason the colorimeter returns a low result of ICUMSA 45 when analyzing highly refined sugar, and a higher ratings of ICUMSA 1000 or more when analyzing more raw sugars.

ICUMSA 45 Manufacturing

ICUMSA 45 is refined from sugar cane or sugar beet. One often sees suppliers declaring that sugar is made from either sugar cane or sugar beet specifically, but practically speaking there is no real difference between sugar made from either source. In fact, the only way to tell whether ICUMSA 45 sugar has been refined from sugar beet or sugar cane is to subject it to a series of tests which are, for the most part, completely unnecessary.

Of course, the methods used for extracting the sucrose from the source material differ between sugar beet and sugar cane. In the case of sugar cane, the cane is crushed through rollers, and the sucrose rich juice which seeps out of it is taken away for refining. In the case of sugar beet, the beets are thinly sliced and placed into a hot water diffuser which leeches the sucrose from the beet flesh.

In both sugar cane processing and sugar beet processing, the result of the initial stage of processing is a raw juice rich in sugar but also loaded with contaminants and colorants. Because sugar from sugar cane is more common, we will focus on this type of sugar refining.

From the raw juice, raw sugar is extracted by one of several methods. In some cases the liquid may simply be evaporated off, or in others the sugar juice may be boiled, crystallized, and sent into a centrifugal chamber to create VHP raw sugar.

Refining Sugar

Affination

The first step in removing the contaminants in raw sugar is mixing the raw sugar with a high sugar syrup to create what is called ‘magma’. This magma is then put into a centrifugal chamber where it is spun at high speed, driving off the liquid content and leaving light brown sugar crystals behind. This stage is often unnecessary if the refinery is working with VHP raw sugar.

Carbonation

To create a high quality ICUMSA 45 product however, more refining is necessary. In the next stage of the refining process, the sugar crystals are removed from the centrifugal chamber, washed, and dissolved into a liquid solution that is roughly half sugar and half liquid. To this solution milk of lime is added. As the milk of lime travels through the solution it forms small deposits of calcium carbonate (chalk). These deposits leech color from the solution and also attract contaminants, locking them away within the chalk deposits. Because calcium carbonate is heavier than water, it sinks to the bottom and is subsequently removed. What is left is a high purity solution of sucrose and water.

Boiling

This solution is then boiled to remove excess water and to encourage sugar crystal growth to occur. When the sugar crystals have grown, they are once more sent into a centrifugal chamber which drives the excess liquid off and leaves the final product, sparkling sweet ICUMSA 45 sugar.

Of course this is a fairly simplified description of the sugar refining process. There are various methods and means of creating ICUMSA 45 sugar, but by and large they are all variations on the process outlined above. The Russian method, for instance, skips the affination stage entirely, but is much more rigorous in the carbonization stage. Other refining methods involve the use of phosphorous instead of milk of lime, a process known as phosphation.

Regardless of the method used in its production, the qualities of ICUMSA 45 sugar are easily and accurately gaged by SGS testing according to ICUMSA guidelines.

ICUMSA 45 Warning

Whilst ICUMSA standards are international, they do vary slightly in Europe from the rest of the world. In Europe, raw sugar is sometimes referred to as ICUMSA 42. This may prove confusing for buyers, but the simplest way to ensure that you understand what kind of sugar is being offered is to ask the seller the rating of the sugar according to the Brazilian SGS standard, which classifies highly refined sugar as a low ICUMSA 45, and increases proportionately with the rawness of the sugar.

Brazilian Icumsa 45 for sale

We work directly with a Brazilian co-op which is in control of over 200 sugar mills. We also work with several big hedge funds who own Brazilian sugar allocation in large quantities at any given time. Whoever is able to give us the best offer is who we go with when a potential buy offer comes our way. Please contact us through this form below and let us know your specific requirements. We will get back to you within a few hours.

Icumsa 45

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Sugar buyers are often warned about scams in the sugar industry. Because this is such a large industry, and because there are so many dealers and brokers, not to mention buyers, sellers, and mills in the world, it can sometimes be difficult to gage what is a good, safe deal, and what is not.

Much of the sugar trading process is designed to provide reassurance and proof that both the buyer and the seller are acting in good faith. Normally in order to conduct a successful sugar trade, a buyer must submit a letter of intent, followed by banking details which allow the seller to conduct a soft probe of the buyer’s accounts and ascertain whether or not funds really are in place to cover the cost of the trade, then a contract must be signed and a stand by letter of credit (or bank guarantee) supplied which serves as guarantee that the buyer will perform. The guarantee is usually an amount equal to several months worth of shipments, and can be drawn upon if the buyer does not pay. The seller normally provides a soft quote, then a firm corporate offer, as well as a proof of product, and a performance bond (2% of the total value) in the form of a letter of credit or bank guarantee. The seller must also sign the contract which is agreed upon by both parties, and it is the seller’s responsibility to have the sugar shipment inspected by independent SGS inspectors before it leaves the port. These inspection certificates are normally required in order for the seller to obtain payment.

As is fairly obvious even from that brief and simplified description, the sugar trading process has safeguard after safeguard built into it, yet still there are instances where buyers can scammed. This most often occurs when buyers get greedy, and seeing offers for large amounts of sugar at rock bottom prices leap at the chance to get a deal. The fact of the matter is that sugar is normally traded on the international market at a fairly fixed price, and discounts are rare. There are two red flags that should prompt any buyer to be wary, and those are heavily discounted sugar, and inordinately large amounts of sugar.

Buyers should be aware that it is not only unscrupulous brokers who sometimes claim to have access to sugar that does not exist, sometimes a mill will claim to have large amounts of sugar that they simply do not have. Scam offers often claim that the sugar is a result of a canceled order, or is simply a ‘bargain’ offer. Buyers flock to take advantage of these offers, but then find that the proof of product (POP) is not forthcoming, or worse, a fraudulent POP has been issued.

Buyers need to know the market in which they are buying, and understand it before they start trying to buy sugar. Brazil is the largest exporter of sugar in the world, but most of this sugar is VHP raw sugar. If you are trying to purchase ICUMSA 45 sugar, you should be aware that relatively small amounts of ICUMSA 45 sugar are produced in Brazil, and the bulk of this sugar is made for existing buyers. There is no such thing as an order of 70-100 million tons, so do not be fooled. If an offer seems substantially better than the bulk of other offers on the market, it is highly likely that it is a scam offer.

If you need large amounts of sugar, be prepared to secure these in advance. Most buyers who require large amounts of Brazilian sugar have deals which may last for a year or more, and involve multiple smaller shipments over a period of time. Brazilian sugar is also heavily traded on the futures market, and it may be possible to secure a deal for sugar which has yet to be produced, or even planted. Most of the ICUMSA 45 produced in Brazil is secured in this fashion, so be prepared to make a long term commitment if you are serious about securing an ongoing and reliable sugar supply.

The good news is that sugar prices have been trending downwards for some time now, however since Brazil has begun using sugar to produce Ethanol fuel, a lot of it will be used in that manner and there will be less of it to go around. Future sugar secured at today’s prices could prove to be a good investment if the price of sugar rises again in the coming years.

Essentially, buying sugar is like making any other major purchase. Buyers need to do their research and be realistic about what is on offer. Most people wouldn’t try to buy a Lamborghini Countach that was advertised for $50.00, because they would be aware that a car normally worth over $100,000 just isn’t going to be sold for $50.00. The same logic applies to sugar trading. At the time of writing, sugar prices are currently around ten cents per pound. Therefore, offers selling sugar for four cents a pound are likely to be scams. It is quite easy to obtain data on the current price of sugar, one simply needs to consult the Intercontinental Commodities Exchange (ICE), formerly known as the NYBOT.

Whether buyers are acting independently, or using the services of a broker, they need to do the necessary research to understand whether or not they are getting a good deal, and whether or not deals proposed to them are likely to be scams. Most sugar scams are not perpetrated by mastermind criminals using advanced technology. Most of them are fairly simple to see through as long as the buyer has their wits about them, only enters into reasonable deals, and takes all due care to see that documentation is authentic.

As a buyer, your success at securing a reliable sugar source is largely in your own hands. Yes there are scammers out there, but there are also a great many honest sellers, brokers, and mills who will contribute to the success of your operations rather than cheating you out of your hard earned dollars. Seek out reliable suppliers and brokers in the same fashion you would seek out any other kind of business partner, and don’t waste time chasing after impossible deals which will only result in disappointment, and sometimes even financial ruin.

Icumsa 45

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ASWP – This acronym stands for ‘Any Safe World Port‘. It is quite common for sugar sellers to offer delivery to any safe world port of the buyer’s choice.

BG – An acronym standing for ‘Bank Guarantee‘, which is a financial instrument issued by a bank on behalf of their customer for the benefit of another party to whom the bank’s customer has a contracted financial obligation. In the event that the bank’s client does not make payment on a contract, the beneficiary of the bank guarantee can draw on the bank guarantee and receive payment.

BG 100% Payable Instrument – This is a type of bank guarantee which meets several conditions. It must be issued or guaranteed by a top 25 world bank, be irrevocable, confirmed, and transferable. It must also cover the entire amount of the contract, and be payable on sight upon presentation of authentic shipping documents.

Bill of Lading (B/L) - A bill of lading is a contract which defines the terms of carriage for a shipment. This contract is set out by the carrier and issued to the exporter (the seller) when the shipment has been received and loaded aboard the vessel. The bill of lading is an essential document, as it proves that sugar was indeed shipped, and that a carrier has taken responsibility for ensuring delivery to the buyer. In order to claim payment for the shipment using a letter of credit, the seller will invariably have to present the bill of lading at either the confirming or issuing bank.

BCL – An acronym standing for ‘Bank Comfort Letter‘. A bank comfort letter is a letter issued from the buyer’s bank to the seller. This letter states that the buyer has sufficient funds to cover the cost of the order. A bank comfort letter is one of the first pieces of documentation that a prospective buyer must provide to a seller in order to negotiate a deal. It is does not, however, constitute an agreement to pay the seller anything, nor does it make the bank liable in any fashion.

CAD – This acronym stands for ‘Cash Against Documents‘, and is indicative of a type of sale where title documents are only transferred when payment is made.

CIA – This acronym stands for ‘Cash In Advance‘, which is a type of sale in which the full amount of the purchase price of an order must be paid upfront. This is not standard procedure in the sugar trading industry, and it is not advised that any buyer pays upfront for sugar that has not yet been shipped.

CIF – ‘Cost Insured Freight‘. Cost insured freight is part of the standard deal for most sugar traders. This means that the seller bears the cost of both shipping and insuring the sugar until it reaches the destination port.

Commodities Exchange – This is an association which governs the rules of trading in a jurisdiction. Being familiar with the guidelines of the commodities exchange in the jurisdictions in which you are doing business is always advised.

Commodity Futures Contract – Often used for sugar futures trading, a commodity futures contract is a contract which details an agreement for the sale of as yet unproduced sugar at a future date. These contracts are very common in the sugar industry, as buyers often need to secure ongoing supplies of sugar for their own production lines. These contracts are also useful for avoiding potential future surges in price, but can be problematic if world sugar prices drop considerably, in which case the buyer may find themselves paying well above market value for sugar.

Confirming Bank – A confirming bank is a bank which agrees to honor a letter of credit issued by another bank.

CPR – Stands for ‘Cédula de Produto Rural‘, which can be translated to ‘Agricultural Product Certificate.’ These certificates are issued by the Brazilian government and offer discounts on large purchases of sugar. This allows the buyer to secure sugar for a specified period at a low rate, and the Brazilian government to quickly raise capital.

CPR- F – These ‘Cédula de Produto Rural’ certificates relate to future sugar which has yet to be produced.

CPR -X – These ‘Cédula de Produto Rural’ certificates relate to sugar which has already been produced.

CWO – ‘Cash With Order‘. In a cash with order situation, the buyer makes payment at the time of the order, and the seller is legally obligated to fulfill the order. This is not a common payment arrangement in the international sugar trading industry.

DC – ‘Draft Contract‘. A draft contract is an initial contract which is drawn up and sent from the seller to the buyer. The buyer has the opportunity to make amendments and send it back to the seller for consideration. This process continues until both parties are satisfied with the terms of the contract.

Deed of Assignment – This is a document relating to of a letter of credit in which the beneficiary may assign all or a portion of the proceeds of the letter of credit to a third party.

FFSBLC – ‘Fully Funded Standby Letter of Credit‘. This document is a standby letter of credit which covers the entire amount of the order, is payable on sight if the correct documentation is presented alongside it, and is irrevocable, transferable, confirmed, and issued or guaranteed by a Top 25 world bank.

FFRDLC – ‘Fully Funded Documentary Letter of Credit‘. This is a letter of credit which revolves to cover several shipments of sugar. Especially in instances where large amounts of sugar are purchased, it is quite common for the sugar to be shipped in several installments over a period of months. The revolving documentary letter of credit is made out for the full amount of one of these shipments, but can be drawn upon multiple times in accordance with the terms of the contract. These terms will also be stated in the revolving letter of credit. These letters of credit must also be transferable, confirmed, and irrevocable.

FCO – ‘Full Corporate Offer‘. Issued by the seller after the preliminary stages of negotiation are complete, such as a letter of intent having been issued by the buyer, and a soft probe having been conducted on their accounts by the seller. A full corporate offer is a document which outlines the conditions of the sale.

FOB – ‘Free On Board.’ If the terms of a trade are ‘FOB’, then the seller is obligated to have the sugar delivered to a port of the buyer’s choosing on board a ship that is also of the buyer’s choosing.

Formal Contract – When the negotiation stages of the draft contract are complete and both parties are satisfied, then a formal contract is drawn up and signed by both parties.

ICPO – ‘Irrevocable Corporate Purchase Order‘. This is a document drawn up by commercial buyers, and contains the quantities of sugar required, the type of sugar required, and other conditions that the buyer would like the sale to proceed under. Once submitted to the seller, this is deemed to be binding and the corporation is obliged to complete the sale.

ICPO With Banking Coordinates – This is an ICPO which includes the company’s bank details in order for the seller to conduct a soft probe on their accounts in order for the seller to satisfy himself that there are sufficient funds in place to cover the cost of the sugar..

ICUMSA – ‘International Commission for Uniform Methods of Sugar Analysis ‘ This is an international body that regulates and standardizes sugar testing processes. It is also used to refer to various grades of sugar, such as ‘ICUMSA 45′ for instance.

ILOC – ‘Irrevocable Letter of Credit‘ An irrevocable letter of credit is a document issued from the buyer’s bank to the seller which guarantees payment upon the presentation of stipulated documentation. As an irrevocable document, it cannot be canceled, and the buyer’s bank is legally obligated to make payment at such time as the beneficiary fulfills the terms set out in the letter of credit.

Irrevocable Confirmed Letter of Credit – An irrevocable confirmed letter of credit which is confirmed by another bank, normally one in the beneficiary’s jurisdiction. A confirming bank is one which undertakes to make payment on the letter of credit on behalf of the issuing bank at such time as the beneficiary meets the terms and conditions outlined in the letter of credit.

Issuing Bank – The issuing bank is the buyer’s bank which issues bank guarantees and letters of credit on behalf of their client.

LC/LOC – ‘Letter of Credit‘ These acronyms are commonly used when referring to letters of credit. Letters of credit are documents issued from the buyer’s bank to the seller which guarantee payment to the beneficiary of the letter of credit (the seller), as long as the terms and conditions set out in the letter of credit are met. This generally means presenting stipulated documentation to a confirming bank within a set time frame.

LOI – ‘Letter Of Intent‘. A letter of intent is a document issued from the buyer to the seller which indicates that the buyer would like to enter into negotiations with the seller in the hope of purchasing sugar. The letter of intent is not legally binding, but it does provide a starting point for negotiations.

MOQ – ‘Minimum Order Quantity‘. This is often expressed by sellers who have a minimum amount of sugar that they are prepared to sell in any one shipment. Smaller quantities do not represent sufficient profit margins to be worth the effort that the seller must go to in preparing sugar for shipment.

Ocean Bill of Lading – Another term for bill of lading, referring to transportation which is undertaken via ship. For further information, refer to ‘Bill of Lading’.

POF – ‘Proof of Funds‘. Usually proof of funds is obtained by conducting a soft probe on the buyer’s accounts. Proof of funds is normally required by a seller before they will proceed with negotiating a sugar sale.

PB – Performance Bond. This is a type of bank guarantee which is issued from the seller to the buyer. It guarantees that the seller will meet the terms of the contract. Normally issued in the amount of ten to fifteen percent of the total amount of the contract, a performance bond can be drawn upon by the buyer in the event that the seller breaks the contract and fails to provide the sugar which was stipulated in the contract.

Revolving Letter of Credit – A revolving letter of credit is a letter of credit which can be drawn upon multiple times. These financial instruments are often put in place when a seller is to make multiple shipments to a buyer, and allows the seller to claim payment for each shipment without the need for a separate letter of credit being issued for every shipment.

SBLSC – ‘Standby Letter of Credit‘. A standby letter of credit is a letter of credit which acts as an assurance from the buyer’s bank that sufficient funds are in place to cover the entire cost of the shipment. Standby letters of credit are not normally drawn upon. If a seller wishes to have payment guaranteed by the buyer’s bank then a letter of credit is normally used.

Sight LOC – ‘Sight Letter of Credit‘. This is a letter of credit that is payable on the sighting of both the letter of credit, and necessary documentation as stipulated in the letter of credit.

SWIFT – ‘Society for Worldwide Interbank Financial Telecommunication‘ This is a global service which is responsible for facilitating communication between banks. Most payments are made via SWIFT.

SGS Inspection – Before sugar leaves the port of sale, an inspection is carried out by SGS, the world’s most respected independent sugar inspection company. SGS inspections provide peace of mind for the buyer who can be assured that the sugar is of a high quality if it is cleared by SGS inspectors.

Transferable Letter of Credit – A transferable letter of credit is a letter of credit which the beneficiary can use to assign some of the funds from the letter of credit to another party. This is common in the case of sellers paying their ultimate suppliers.

RWA – ‘Ready willing and Able‘. This is a document which is issued by the buyers bank. The bank confirms that their client has the sufficient funds in their possession and is willing and able to engage in the contract.

Prime Bank – top 25 worlds bank. These are trusted banks which are preferred (or in most cases even mandatory) in commodity trading.

Terminology

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