When you request pricing from an Indonesian green coffee exporter, you'll almost always see "FOB" quoted. But what exactly does FOB include — and what falls on you as the buyer? This guide explains it clearly.
What FOB Means
FOB (Free On Board) is an Incoterms 2020 trade term. When a seller quotes "FOB Belawan," it means:
- The seller covers all costs and risks until the goods are loaded onto the vessel at Belawan Port
- Once the goods cross the ship's rail, all costs and risk transfer to the buyer
What the Seller Pays (FOB)
| Cost | Covered by Seller? |
|---|---|
| Green coffee purchase from farms/cooperative | ✓ Yes |
| Milling, grading, sorting, bagging | ✓ Yes |
| Export license (ETPIK) | ✓ Yes |
| Phytosanitary Certificate | ✓ Yes |
| Certificate of Origin | ✓ Yes |
| Inland transport to port | ✓ Yes |
| Port handling / loading onto vessel | ✓ Yes |
| Export customs clearance | ✓ Yes |
What the Buyer Pays (FOB — Buyer's Side)
| Cost | Covered by Buyer? |
|---|---|
| Ocean freight | ✓ Yes |
| Marine insurance | ✓ Yes |
| Destination port handling / unloading | ✓ Yes |
| Import customs duties & taxes | ✓ Yes |
| Import clearance costs | ✓ Yes |
| Inland delivery at destination | ✓ Yes |
FOB vs CIF vs EXW: Which Should You Request?
FOB is the most common term in green coffee trade. It gives buyers full control of freight costs and carrier choice — often allowing better rates through your own freight forwarder.
CIF (Cost, Insurance, Freight) means the seller arranges and pays ocean freight to your port. Simpler for first-time importers, but you lose freight negotiation leverage. CIF price = FOB + freight + insurance.
EXW (Ex Works) means you collect from the seller's warehouse. All costs from that point — including export handling, port fees, freight — are on you. Rarely used in coffee trade.
Recommendation: Start with FOB. Once you have a freight forwarder relationship, FOB gives you the best price transparency and freight control.
Indonesian Export Ports for Green Coffee
| Port | City | Serves Origin |
|---|---|---|
| Belawan | Medan, North Sumatra | Gayo, Mandheling, Lintong |
| Panjang | Bandar Lampung | Lampung Robusta |
| Tanjung Priok | Jakarta | Java, consolidated lots |
| Makassar | South Sulawesi | Toraja, Kalosi |
| Surabaya | East Java | Flores, East Java |
How to Compare FOB Prices from Multiple Suppliers
Always compare FOB prices at the same port. A USD 4.90/kg FOB Belawan vs USD 4.75/kg FOB Tanjung Priok for the same Gayo Arabica aren't directly comparable — freight costs differ by port. To normalize: add indicative freight to a common destination (e.g., Rotterdam) for true landed cost comparison.
Willkin Green Coffee quotes FOB from Belawan, Panjang, Tanjung Priok, or Makassar depending on origin. Request a detailed FOB quote here.