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Trade · Contract

Incoterms for coffee

The International Chamber of Commerce’s three-letter trade terms that say where green coffee changes hands, who carries the risk on the way and who pays freight, insurance and customs clearance.

Source-checkedby Coffearium verification pass· Last source-checked 16 Oct 2026· Prepared with AI assistance· 13 sources (7 tier A)· Updated 16 Oct 2026
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Contents
  • The Incoterms rules are 11 three-letter trade terms of the International Chamber of Commerce (ICC). Each sets where the seller delivers, where risk passes and who pays which costs.1,2
  • As of October 2026, Incoterms 2020 is the current edition. ICC committees give late 2029 as the planned launch of Incoterms 2030.5,6
  • Most green coffee export contracts are free on board (FOB): risk passes when the coffee is on board the ship, and the buyer pays the costs from then on.7,9
  • For containerised goods handed to a carrier before loading, the ICC’s introduction to the 2020 rules advises selling free carrier (FCA) rather than FOB.1
  • “Ex dock”, “ex warehouse” and “in store” are delivery terms of coffee trade contracts, not Incoterms rules.1,10,11

What the Incoterms rules are#

The Incoterms rules are 11 three-letter trade terms published by the International Chamber of Commerce (ICC).1,2 Each term says where the seller delivers the goods. It also says where the risk of loss or damage passes to the buyer and how the costs are divided.1 A green coffee contract “FOB Santos” uses one of them: the seller delivers the coffee on board a ship at the port of Santos.7

The rules are not a contract of sale in themselves. They become part of a contract only when the contract names them.1 They do not settle when, where or how the price is paid, or when ownership of the coffee passes.1 The ICC advises naming the rule, the place and the edition in the contract.1

As of October 2026, the current edition is Incoterms 2020. It came into effect in January 2020.4 The ICC has begun a revision. Two national ICC committees give late 2029 as the planned launch of Incoterms 2030.5,6 Until then, Incoterms 2020 remains the applicable edition.5 The rules are an ICC publication; this entry describes them in its own words.2

The terms used for green coffee#

This entry covers seven rules. Six are named in the coffee trade documents opened for it: FCA, FOB, CFR, CIF, DAP and DDP.9,10,11 The seventh, EXW, is included for comparison with the contract term ex dock. The rules differ in two points: where risk passes, and how far the seller pays for transport.1

  • EXW, ex works. The seller makes the coffee available at its own premises or another named place. The seller need not load it or clear it for export.7
  • FCA, free carrier. The seller hands the coffee to the carrier named by the buyer. Risk passes at that point.7
  • FOB, free on board. The seller delivers the coffee on board the ship named by the buyer, at the named port. Risk passes on board; the buyer pays all costs from then on.7
  • CFR, cost and freight. Risk passes on board, as under FOB. But the seller pays the freight to the named port of destination.7
  • CIF, cost, insurance and freight. As CFR, and the seller also buys insurance against the buyer’s risk during the voyage.7
  • DAP, delivered at place. The seller carries the risk until the coffee arrives at the named place, ready for unloading.7
  • DDP, delivered duty paid. As DAP, but the seller also clears the coffee for import and pays the duties.7

The figure follows one shipment from the seller’s warehouse to the buyer’s. Each row shows where a term moves the risk and the costs.

EXWFCAFOBCFRCIFDAPDDPEx dock12345
  1. Seller’s premises. Under EXW the coffee is delivered here, at the buyer’s disposal.7
  2. Handover to the carrier. Under FCA, risk passes when the seller hands the coffee to the buyer’s carrier.7 A coffee export guide names the place of embarkation and mentions the term for exporters in countries without a seaport.9
  3. On board at the port of export. Risk passes here under FOB, CFR and CIF.7
  4. Port of import. Under CFR and CIF the seller pays the freight to here, although the risk has already passed.1,7 Under the ex-dock term of the Green Coffee Association (GCA) contract, risk passes on the dock here.10
  5. Buyer’s premises or another named place. Under DAP and DDP the seller carries risk and costs to here; under DDP also import clearance and duty.7
Where the seller’s risk (ink line and disc) and costs (dashed arrow) end under seven Incoterms rules. The hollow ring marks the ex-dock term of the GCA contract, which is not an Incoterms rule. Schematic, not to scale.

According to a government export guide, most contracts in the international coffee trade are FOB.9 The guide says buyers prefer FOB because they can negotiate freight rates that single exporters cannot get.9 A coffee textbook describes second- and third-wave roasters as notable FOB buyers who organise their own freight and insurance.13 How the FOB price fits into the full cost of a coffee is shown in How a coffee price is made.

FOB or FCA for containers#

Under FOB, risk passes only when the goods are on board.7 According to an article on the ICC’s training platform, the term dates from before containers existed.8 Coffee in a container may be handed to the carrier before it is loaded onto the ship.1 Under FOB, the seller still carries the risk during that wait.1,7

For such goods, the ICC’s introduction to the 2020 rules says the seller is well advised to sell FCA rather than FOB.1 An article on the ICC’s training platform describes FOB as a term for port-to-port shipments only, and FCA as the term for containers.8 A government guide for coffee exporters calls FOB usually favourable for exporters in coastal countries, and FCA for those in landlocked ones.9

Insurance under CIF#

Under CIF the seller must insure the coffee during the voyage. By default the cover is only the minimum set of standard marine clauses, the Institute Cargo Clauses (C). The parties may agree more.1,2 The related rule for any mode of transport, CIP, requires the broader Institute Cargo Clauses (A).2

The insurance covers the buyer’s risk, because risk has already passed on board.7 Under the FOB, CFR and FCA terms of the GCA contract, the buyer covers marine and war risk insurance.10 Under FOB the buyer is responsible for insurance from shipment, according to a government guide for coffee exporters.9 A coffee textbook describes second- and third-wave roasters who buy FOB arranging their own insurance.13

Coffee contracts and their own delivery terms#

The coffee trade has its own standard contracts.12 In Europe most buyers use the contracts of the European Coffee Federation (ECF); in the United States the GCA issues the standard contract.9,12 How these contracts are built is explained in Green coffee contracts.

These contracts use some Incoterms rules, and also their own delivery terms. The ECF’s European Standard Contract for Coffee (ESCC) covers coffee sold “in store” or “ex store” in Europe, according to a food-industry body.11 The GCA contract defines “ex dock” and “ex warehouse” delivery in the importing country.10 None of these is among the 11 Incoterms rules.1

Ex works and ex dock sound alike but sit at opposite ends of the route. Under EXW the coffee is delivered at the seller’s premises.7 Under the GCA’s ex-dock term, risk passes on the dock at the port of destination, after freight is paid and customs entry is made.10

Shipment months in a contract follow the crop of each origin; see Harvest calendars.

Reference values: the seven terms compared#

Term Transport group Delivery and passing of risk Seller pays carriage to Clearance stated in the sources
EXW Any mode1 Goods at the buyer’s disposal at the seller’s premises or another named place7 – Seller need not clear for export7
FCA Any mode1 To the carrier or other person nominated by the buyer7 Place of handover GCA FCA: seller delivers cleared for export10
FOB Sea and inland waterway1,7 On board the vessel nominated by the buyer at the named port of shipment7 On board; buyer pays all costs from then7 Not stated in the sources opened
CFR Sea and inland waterway1,7 On board7 Named port of destination7 Not stated in the sources opened
CIF Sea and inland waterway1,7 On board7 Named port of destination, plus minimum insurance2,7 Not stated in the sources opened
DAP Any mode1 On the arriving means of transport, ready for unloading, at the named place of destination7 Named place7 Not stated in the sources opened
DDP Any mode1 As DAP, cleared for import7 Named place7 Seller clears for export and import and pays duties of both7

Summary of the rules as described by the ICC and by HM Revenue & Customs; the ICC text prevails. The 11 rules fall into 7 for any mode of transport (EXW, FCA, CPT, CIP, DAP, DPU, DDP) and 4 for sea and inland waterway transport (FAS, FOB, CFR, CIF).1 CPT, CIP, DPU and FAS do not appear in the coffee documents opened for this entry and are left out of the table.

Two critical points in the C terms#

In the F and D terms, the place of delivery marks both the passing of risk and the split of costs.1 The C terms (CFR, CIF) separate them. The place named after a C term is the destination to which the seller pays carriage; according to the ICC introduction it never becomes the place of delivery.1 Risk passes on shipment.1,7

A coffee sold “CIF Hamburg” is therefore at the buyer’s risk during the voyage, while the seller has paid the freight and the insurance.1,7

The GCA contract keeps an older wording. Under its FOB and CFR terms, risk passes when the coffee “crosses over ships rail”.10 Incoterms 2020 places the passing of risk on board the vessel.7 Which wording governs a given sale depends on the terms that contract names.1

Containers and the on-board bill of lading#

Sellers and buyers, often through their banks, may want a bill of lading with an on-board notation when goods are sold FCA for carriage by sea.1 Under FCA, delivery is complete before loading, so the seller may not be able to obtain such a bill from the carrier.1

Incoterms 2020 added an option to FCA for this case.3 If the parties agree, the buyer instructs its carrier to issue an on-board bill of lading to the seller after loading. The seller then passes it to the buyer, typically through the banks.1,2 The seller takes on no duty regarding the terms of the contract of carriage.1

Insurance in detail#

Parameter CIF (Incoterms 2020) CIP (Incoterms 2020) GCA contract
Who insures Seller, at its own expense1 Seller1,2 Buyer under FCA, FOB, CFR; seller under CIF10
Default cover Institute Cargo Clauses (C)1,2 Institute Cargo Clauses (A) or similar2 Marine and war risk insurance (buyer, FCA, FOB, CFR); “All Risks” policy (seller, CIF)10
Higher cover Open to agreement1 – –
Document Insurance certificate to the buyer9 – Certificate of insurance with the CIF documents10
Arrival terms – – Seller keeps marine insurance under ex dock, ex warehouse, delivered and delivered-at-frontier terms10

The ICC changed the CIP default to (A) in 2020 and kept (C) for CIF, which is reserved for maritime trade.2,3 The ICC introduction describes the higher CIP cover as increasing the cover the seller obtains for the benefit of the buyer.1 A government guide notes that insurers generally do not pay for losses from uncontrollable external events that a policy may call force majeure.9 No source opened for this entry measured how often coffee buyers insure above the minimum.

Contract terms that are not Incoterms#

The GCA contract defines its own delivery terms for the importing country.10

GCA term Where risk passes Costs and conditions Time limits
Ex dock (EDK) On the dock at the port of destination10 Risk passes after ocean freight and terminal handling are paid and customs entry and government requirements are met10 At least 5 days free of dock or container demurrage for the buyer10
Ex warehouse (EWH) At the warehouse10 All ex-dock costs plus moving the coffee into a warehouse10 At least 2 weeks of unexpired storage, and the same time to weigh10
Free on trailer (FOT) As FOB; differs only in the type of conveyance10 Buyer pays the freight10 –
Delivered (DLD) Not read for this entry All inland transport; receiving charges for the buyer10 –

On landed weights, GCA coffee is weighed within 15 days of availability at the port of destination, and differences from the pro-forma invoice weights are adjusted at the contract price.10

According to FoodDrinkEurope, the ESCC distinguishes three kinds of contract. Shipment contracts cover coffee from the port of shipment to the port of destination. Delivery contracts cover coffee for delivery at an agreed place in Europe, on in/ex store or FCA terms. Spot contracts cover coffee already in a European warehouse, on in/ex store, FOB, FCA, DAT, DAP or DDP terms.11 DAT is not among the 11 rules of Incoterms 2020; the ICC renamed it DPU (delivered at place unloaded) in 2020.1 The ESCC text itself was not opened for this entry.

EXW is not ex dock. Under the ICC rules, EXW delivery is at the seller’s premises or another named place, with no export clearance by the seller.7 Delivery on the dock at destination, after freight and customs entry, is the GCA’s ex-dock term.10

Clearance, documents and the EUDR#

Each term says who handles export clearance, shipping and insurance.9 The two ends are clear: under EXW the seller need not clear the coffee for export, and under DDP the seller clears it for import and pays the duties.1,7 The ICC introduction notes that EXW may cause problems with loading and export clearance. Under DDP, import clearance can only be performed within the buyer’s country.1

A government guide for coffee exporters to Europe lists the usual documents: commercial invoice, bill of lading, certificate of origin (an ICO certificate or an EU certificate from a chamber of commerce), phytosanitary certificate, export licence, packing list and export declaration.9 Under CIF the exporter must also provide an insurance certificate.9

For the due-diligence documents needed for coffee placed on the EU market, see EU Deforestation Regulation (EUDR).

Open questions#

  • FCA in practice. The ICC advises FCA for containerised goods, but no source opened for this entry measured how many coffee contracts use FCA rather than FOB.1,9
  • Incoterms 2030. As of October 2026 the revision is under way and its content is not published.5,6
  • Insurance level. No source opened for this entry measured how often coffee shipped CIF is insured above the minimum (C) cover.

Key documents#

Debattista, 2019 – Introduction to Incoterms 2020. The ICC’s own introduction explains what the rules do and do not cover, why the C terms separate the place of delivery from the destination, and why FCA suits containerised goods. It also sets out the 2020 changes to FCA and to the insurance in CIF and CIP.

International Chamber of Commerce, ICC Digital Library · library.iccwbo.org

Green Coffee Association, 2021 – Contract Terms and Conditions. The standard US green coffee contract, first effective in 2002 and amended since. It defines its own delivery terms, including ex dock and ex warehouse, and says who insures under each term.

Green Coffee Association, New York · greencoffeeassociation.org

CBI, 2024 – Organising coffee exports to Europe. A Dutch government guide for exporters. It describes FOB as the usual term, FCA for exporters in landlocked countries, the insurance duty under CIF and the documents an export needs.

CBI, Netherlands Ministry of Foreign Affairs · cbi.eu

Nadelberg et al., 2017 – Trading and transaction. A textbook chapter on how coffee is bought and priced. It describes second- and third-wave roasters as FOB buyers who organise their own freight, insurance and containers.

The Craft and Science of Coffee, Academic Press, ch. 9 · sciencedirect.com

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Sources

  1. ADebattista, C. (2019). Introduction to Incoterms® 2020. International Chamber of Commerce, Incoterms® 2020 (ICC Digital Library).
  2. A(2026). Incoterms® 2020. International Chamber of Commerce.
  3. A(2019). ICC releases Incoterms® 2020. International Chamber of Commerce, news release, 10 September 2019.
  4. A(2018). ICC issues warning on fake Incoterms® rules and deceptive training offers. International Chamber of Commerce, news release, 19 October 2018.
  5. B(2026). Incoterms® 2030. ICC Austria (Austrian national committee of the International Chamber of Commerce).
  6. B(2026). Incoterms® 2030: a Dutch Working Group is being formed. ICC Netherlands, 31 August 2026.
  7. A(2026). Customs valuation: Incoterms. HM Revenue & Customs, GOV.UK (published 25 June 2025, updated 14 April 2026).
  8. BBustamante Morales, M. A. (2024). Incoterms® 2020: FCA or FOB?. ICC Academy, 19 November 2024.
  9. A(2024). 10 tips on how to organise your coffee exports to Europe. CBI – Centre for the Promotion of Imports from developing countries, Netherlands Ministry of Foreign Affairs (last updated 17 July 2024).
  10. A/BGreen Coffee Association (2021). Contract Terms and Conditions (effective 1 May 2002, amended 27 September 2021). Green Coffee Association (GCA), New York.
  11. B(2021). European Standard Contract for Coffee: facilitating the green coffee trade. FoodDrinkEurope (page on the European Coffee Federation contract, 4 April 2021).
  12. AInternational Trade Centre (2012). Contracts (chapter), The Coffee Exporter’s Guide, Third Edition. International Trade Centre (ITC), United Nations, Geneva.
  13. BNadelberg, E.; Polit, J. R.; Orjuela, J. P.; Ranitzsch, K. (2017). Trading and Transaction – Market and Finance Dynamics. In: Folmer, B. (ed.), The Craft and Science of Coffee, Academic Press, ch. 9, pp. 205–224.

Tier A · authoritative · B · trade and expert · C · general. Supporting quotes for every source are in the data version of this entry. If a publisher’s site refuses access, try the doi link or “other copies”.

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