This page of our website deals with the basic elements of the standard FCO (Full Corporate Offer also known as Firm Corporate Offer) which FTS issues to buyers prior to signing a final contract.
The information is provided as reference for potential buyers who may wish to gain a greater understanding of our trading procedures.
It is important to note that these procedures might subject to changes to suite the deal without prior notice or update to this site.
FCO Details
The quality of or products refers to the Thai Rice Standards. An official translation for Hom Mali and for Thail Long Grain Rice Standards are referenced on the webpage below.
The price of the products is to be determined in negotiations and will depend upon quantities ordered, the current going rate the Thai Rice Exporters published market pricing and other relevant factors like shipping cost etc.
For Organic and or Fairtrade Hom Mali we can ship a maximum of 800 metric tons per month, and the yearly total is regularly limited by availability of the organic paddy.
For conventional Hom Mali we can ship a maximum of 2000 metric tons per month.
Standard packaging is new woven PP bag with net weight of 50lbs, 25kg, 60lbs, 50kg or new woven PP bigbags of 1000kg
Ordering Procedures
Procedures relating to payment terms and conditions and contract negotiations will be detailed in the FCO.
Once the buyer receives our soft corporate offer (SCO), they will need to send an ICPO (Irrevocable Corporate Purchase Order), and permission for the seller to conduct a soft probe on their accounts. Bank Comfort Letter (BCL) might also be required.
Once the soft probe has been conducted, the seller will send the buyer a FCO (Full Corporate Offer) within three days. After the buyer returns the signed FCO, seller will issue the draft contract.In some cases the FCO step might be skipped and negotiations can go directly to draft contract.
The buyer is free to review the contract at their leisure, and make any desired changes. The contract, with changes, is send back to the seller, and the seller reviews the changes, makes any additional corrections, sends it back to the buyer for their review, and so on and so forth until both parties are satisfied and the draft contract is agreed upon.
Within five days of the draft contract being received and signed, the buyer’s bank should send a SWIFT message MT799 to the seller’s bank with a notification that the buyer is RWA (Ready Willing and Able) to issue the necessary financial instruments. This step is also known as POF (Proof of Funds).
Once this is received, with seller’s bank approval of the buyer’s financial instruments, the seller will produce six hard copies of the contract and send them to the buyer who must review and initial each page within two days, then send four copies back to the seller.
If the contract is for more multipe shipments:
The buyer’s bank must SWIFT a non operational financial instrument to the seller’s bank at this time (Stand by Letter of Credit, covering a predefined number of monthly shipments).Within five days after the non operational financial instrument is received by the seller’s bank, the seller will SWIFT POP (Proof of Product) which includes a license to export and an approval to export, both issued by the Thai government, a warehouse receipt or a millers commitment to produce the rice.
Payment for rice is made via a documentary letter of credit which is issued or confirmed by a well reputed bank that is acceptable to the sellers bank, payable 100% on sight. If shipments are to take place over the course of several months, then the letter of credit should be revolving.
A standby letter of credit for the value of (at least) two shipments is also required to cover the seller in the event of the buyer breaching the contract.
The buyer will also receive a stand-by letter of credit from the seller as a performance bond. The performance bond is equal to two percent of the total value of the contract, and is valid for the duration of the contract with an additional thirty day extension.
Simplified procedure if the contract for single shipment:
Payment for rice is made via a documentary letter of credit which is issued or confirmed by a well reputed bank that is acceptable to the sellers bank, payable 100% on sight.
Once a contract is signed, and the buyer’s financial instruments have been activated, shipments begin within twenty eight to forty five days.
Before shipments leave the port they are inspected by qualified and independent SGS inspectors see "SGS Thailand Standard Procedure" .
The buyer will receive the following documentation upon shipping of the rice:
The buyer is also welcome to inspect the product in person at this stage.