The importer/purchaser contacts one or several potential suppliers (refer to the USA Rice supplier list) and requests a quotation on rice. These potential suppliers include brokers, millers and exporters. To give a proper price quotation, the supplier must have certain information from the prospective purchaser. The list of information usually required includes:
• Type/Form of rice
• Firm name and type, address, person to contact, telephone number or fax number
• Delivery date, port and other delivery information
• Type or terms of payment
• In addition, financial references may be required
NOTE ON ROLE OF BROKERS: Brokers can assist in providing the above information and other details necessary to consummate a transaction. They are often used to guide and assist the prospective purchaser to accomplish objectives. The broker's fee is usually paid by the seller.
The potential supplier will study the request for quotation and determine how the requirements can best be fulfilled. After making any adjustments necessary, the quote is usually sent by fax to the buyer. This quote is usually good for 24 hours. Other time limitations may be specified.
If the importer is interested, he or she now responds with an acceptance of the offer or a request for certain revisions.
After the price and trading terms are agreed on, the sale is confirmed for the specified quantity to be delivered within a specified period of time. A contract is then usually issued spelling out the terms and conditions of the sale.
Depending on the trading terms, the importer/ purchaser goes to a bank in his or her country and makes the necessary arrangements for the agreed mode of payment. Such methods might be Letter of Credit, Sight Draft, or Cash Against Documents.
The supplier delivers the rice in accordance with the terms of the sale and secures documents as required by the terms of the sale.
The seller's invoice with the required documents is presented to the buyer and released upon payment in accordance with terms of the sale.
The buyer, with proper documents, takes possession of the rice.