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  • Specifying 'quality': on sample basis

     
     

    Because descriptions provide a minimum of detail concerning quality they are seldom if ever used for the trade in high quality coffee. In addition, buyers know that different sellers have their own interpretation of FAQ and so prefer to deal with shippers whose interpretation is acceptable to them. However, a trader wishing to short-sell XYZ arabica grade one FAQ forward does not necessarily know in advance which shipper or exporter he will later buy from.
     
    In this case the term first class shipper can be added to the description, thereby implying that a reputable exporter will ship the coffee. But the term first class is open to interpretation as well and so the contract may instead stipulate the names of exporters of whom the buyer approves, one of whom must eventually ship the coffee. Large roasters are quite flexible about the origin of standard or commercial grade coffee, and to widen their purchasing options often leave the seller free to deliver an agreed quality from one of a number of specified origins and shippers.

    Subject to approval of sample (SAS):This is one way to eliminate most of the quality risk inherent in buying unseen coffee from unknown shippers, as buyers are not obliged to accept any shipment that they have not first approved. SAS obliges the exporter to provide an approval sample before shipment. There are three generally recognized possibilities.

    SAS, no approval no sale. If the sample is not approved the contract is automatically cancelled.

    SAS, repeat basis. If the first sample is rejected, a second or even a third sample may be sent. Sometimes the contract will mention how many subsequent samples can be submitted. This option provides maximum quality security without immediately jeopardizing the contract, and works well in long-standing relationships.

    SAS, two or three samples for buyer's choice. When the buyer's quality requirements are very specific, and in order to save time, multiple samples may be submitted at the same time. To avoid confusion such contracts should stipulate whether repeat samples may be sent or whether no approval means no sale.

    Theoretically, an exporter who feels aggrieved by what seems to be an unreasonable (intentional) rejection and cancellation could declare a dispute and proceed to arbitration (See 07).

    The chance of success would however be extremely slim if not non-existent, not least because an arbitration panel might rule it has no jurisdiction over what was in essence a purely conditional contract that never became binding (because the buyer did not approve a sample). Exporters should therefore be fairly selective when agreeing to sell subject to approval of sample.

    Stock-lot sample: Selling on stock-lot sample avoids potential approval problems. The sample represents a parcel that is already in stock so there should be no discrepancy between the sample and the shipment, including the screen size (even if the screen size was not stipulated). Day-to-day business would become too cumbersome if one insisted on stock-lot samples for all deals, but for newly established exporters or for those wishing to break into a niche market or to trade top quality coffees, stock-lots usually are the best route.

    Once a satisfactory delivery has been made, an exporter may wish to sell a similar quality again. Rather than send new samples, the exporter may offer quality equal to stock-lot X; this guarantees that the coffee is of comparable quality, suitable for the same end-use as the original purchase. The words equal to must be used because the sample was not drawn from the new lot of coffee. If the exporter feels that the quality is very similar but that a little latitude is needed as to the coffees bean size or green appearance, they may say quality about equal to stock-lot X. Usually, such business is only between parties in a long-standing relationship who know each other well.

    Type: Once a few transactions have been satisfactorily concluded, buyer and seller may decide to make the quality in question into a type. Both parties are now confident that the quality will be respected and business can proceed without samples (although some roasters will still insist on pre-shipment samples). Usually the quality of a type (like a recipe) is kept confidential between shipper and buyer. Top or exemplary coffees are mostly sold on sample or type basis whereas medium and standard qualities are more often traded on description.

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