FOB, CFR, CIF: what a bulk quote really includes.

Commodities & trade · 28 Oct 2026

Two offers for the same cargo can look $40 apart and be the same price. The difference is usually the Incoterms rule: who pays the sea freight, who insures it, and, most importantly, where the risk passes.

1. Most benchmark prices are FOB

Middle East sulphur contract prices are published FOB the loading port. For October 2026, Shanghai Metals Market reported Qatar at $835/t FOB, Kuwait Petroleum Corporation at $820/t FOB and ADNOC at $890/t FOB Ruwais, each $45–70/t lower than September (SMM, 8 Oct 2026). A buyer in Asia or Africa pays that, plus freight and insurance.

Argus showed the arithmetic in October 2025: a $400/t FOB Qatar price implied $420–425/t CFR China, with freight for 30,000–35,000 t cargoes assessed at $20–22/t to south China (Argus, 30 Oct 2025). Freight changes week to week, so a CFR quote is only comparable with an FOB quote once you add the freight of that week.

2. What each rule means

Under Incoterms® 2020 (ICC Publication 723E):

• FOB – Free On Board (named port of shipment): the seller loads the goods on board the vessel the buyer nominates. The buyer books and pays the main freight. Risk passes when the goods are on board.
• CFR – Cost and Freight (named port of destination): the seller books and pays freight to the destination port, but risk still passes when the goods are on board at the port of shipment. The seller has no duty to insure; ICC says the buyer “would be well-advised” to buy cover.
• CIF – Cost, Insurance and Freight (named port of destination): as CFR, plus the seller buys insurance for the buyer. The minimum is Institute Cargo Clauses (C) or similar, for at least 110% of the contract price (CIF A5); broader cover must be agreed in the contract.
• All three are for sea or inland waterway transport and suit bulk cargoes where the seller has direct access to the vessel (ICC Academy).

3. The common trap

Under CFR and CIF the price is named at the destination port, but the risk passes at the loading port. If the cargo is lost or damaged at sea, the buyer claims on the insurance, not against the seller. CIF minimum cover (Clauses C) is limited, which is why many buyers ask for Clauses (A).

4. Six questions to ask of any bulk offer

1. Which rule and which version, for example “CFR Ningbo, Incoterms 2020”?
2. Which named port and, if relevant, which berth or terminal?
3. Who nominates the vessel, and what are the loading rate, laytime and demurrage terms?
4. Where are quality and quantity certified: independent inspection at the load port, the discharge port, or both?
5. Under CIF: which cargo clauses, what insured value, and who is the named beneficiary?
6. Does the payment instrument (letter of credit or documentary collection) match the delivery point and documents?

5. Why it matters now

Freight and insurance have moved sharply with the conflict in the Gulf. Reuters reported on 20 October 2026 that Gulf sulphur supply has been disrupted, and that CRU expects sulphuric acid prices to keep easing into 2027. In a moving market the term of delivery can matter as much as the headline price.

See also our logistics & terms page and buyer’s guide.

General guidance only. The sales contract and the official ICC Incoterms® 2020 text govern. Incoterms® is a trademark of the International Chamber of Commerce.