Vietnam coffee exporters told to ship FCA over FOB

Domestic coffee exporters should sign export contracts in FCA (FreeCarrier) term rather than FOB (Free on Board) which is not suitable for container shipments, the Vietnam Coffee and Cocoa Association (Vicofa) suggested.

Vicofa has sent a letter to the Ministry of Industry and Trade and the Vietnam Chamber of Commerce and Industry, asking the two bodies to warn coffee exporters against FOB contracts, which should apply for loose cargoes only, the Vietnam News Brief Service reported.

Van Thanh Huy, chairman of Vicofa, said many foreign countries were presently using the FCA term for containerised goods transport.

The FCA term requires exporters to take responsibility for all risks and costs until the goods are delivered to the named place and collected by the carrier nominated by the buyer. Besides, exporters are responsible for the export customs clearance.

In return, FCA helps exporters receive payment from importers earlier, instead of waiting for bill of lading from carriers.

Coffee is now the biggest foreign currency earner among Vietnam's agricultural products, generating US$1.32 billion in terms of export turnover in the first seven months of this year.

With its coffee being shipped to 71 countries and territories worldwide, Vietnam has become the world's largest Robusta coffee producer and exporter, making up 43 percent of the global market share.