Coffee is a product with global demand but is produced in specific nations and of different qualities. To adequately understand coffee processing, export clearance, and sale, you must first focus on the model at hand. Some buyers import green coffee; others import coffee beans, others import already processed coffee. An exporter can range from coffee farmers to roaster who take the responsibility of selling high-quality coffee, whether in raw form or processed, to foreign buyers (Bocchi, 2019). A case of coffee from farmers to local roaster to export, the coffee cycle starts with harvesting coffee beans and associated products to manufacturers who process these products to finished goods desirable by buyers. This sequence offers minimal risk to all parties involved and a fair profit for the sellers and roaster. Buyers are also assured of high-quality coffee and related products since roasters buy the best quality coffee from local farmers (Bocchi, 2019). When farmers export directly to buyers, the profit margins increase, but more risks arise. Buyers also have no quality assurance and cannot easily shift to other farmers if they are dissatisfied since it is a direct relationship.
When it comes to customs and clearance, both the seller's customs authority and buyer's customs authority have rules, regulations, and standards that have to be met in terms of imports and exports. Packaging, transportation, storage, quality, and quantity determine the custom regulation an exporter has to adhere to (Duran, 2018). Customs also provides insurance for the shipment of coffee and a sense of responsibility at every coffee export stage. Customs authority also mitigates the contract between the buyer and the seller in an INCOTERMS agreement, which entails a free on board (FOB) where the producer or roaster adheres to all regulations and fees until coffee is loaded to the transporting vessel for export. However, the buyer has to pay for ocean or air freight and insurance (Duran, 2018). Ex Works (EXW) stipulates that the buyer takes ownership of the coffee export and associated storage risks. Cost and Freight (CFR) as an INCOTERM requires the exporter to deliver coffee to the port of discharge and is responsible for any damage that may arise due to improper packaging while the buyer pays for insurance. Cost insurance freight (CIF) dictates that the exporter pays for charges of the coffee up to the port of discharge while the buyer pays for importation charges.
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When it comes to importing coffee, the buyer becomes responsible for clearing the coffee at the destination port. The buyer's necessary import duty fees are facilitated, while the coffee's quality and storage conditions are ascertained (Piatek, 2016). Transport to the necessary location is the buyer's responsibility once the products have passed customs and clearance and are therefore used as intended. The amount of fees paid for import for clearance depends on the imported coffee and coffee-related products. Taxation of coffee depends on the economics laws on imports on whether local goods are being pushed for more than imported goods, which become heavily taxed, becoming too expensive for buyers, especially those who grow coffee locally but cannot process it to final coffee drinks and tentatively have to import again.
References
Bocchi, V. (2019, Jan 3). How is Green Coffee Bought & Sold? Retrieved from Perfect Daily Grind : https://perfectdailygrind.com/2019/01/how-is-green-coffee-bought-sold/
Duran, I. (2018, Aug 10). A Producer’s Guide to Preparing Coffee for Export. Retrieved from Perfect Daily Grind : https://perfectdailygrind.com/2018/08/a-producers-guide-to-preparing-coffees-for-export/
Piatek, D. (2016, July 21). Coffee Importing. Retrieved from Fresh Cup : https://www.freshcup.com/coffee-importing/
