August 2026 | OLVIA S.R.L.
If you are sourcing sunflower oil in bulk — crude (CSFO) or refined (RBD) — understanding Incoterms is not optional. The trade term you agree on determines who pays for freight, who arranges marine insurance, and exactly where your legal risk begins. A wrong choice can cost tens of thousands of euros on a single tanker shipment.
This guide explains FOB, CFR, and CIF in plain language for sunflower oil buyers and commodity traders, with practical examples from Black Sea and Mediterranean routes.
What Are Incoterms?
Incoterms® (International Commercial Terms) are standardised trade terms published by the International Chamber of Commerce (ICC), current version Incoterms® 2020. They define:
- Where the seller’s responsibility ends and the buyer’s begins
- Who arranges and pays for ocean freight
- Who arranges and pays for marine cargo insurance
- Who handles export and import customs clearance
For bulk liquid cargo such as sunflower oil, the three most common Incoterms are FOB, CFR, and CIF — all sea-freight terms, suited for tanker shipments from ports such as Odesa, Chornomorsk (Ukraine) or Constanța (Romania).
FOB — Free On Board
What FOB means
Under FOB (Free On Board), the seller delivers the cargo on board the vessel nominated by the buyer at the agreed port of loading. Risk and cost transfer to the buyer the moment the oil passes the ship’s rail.
Example: FOB Chornomorsk · FOB Odesa · FOB Constanța
Who does what under FOB
- Seller: export clearance, terminal/loading costs, delivery on board
- Buyer: vessel nomination, ocean freight, marine insurance, import clearance, discharge
When to use FOB
- You have chartering relationships and can negotiate competitive freight rates independently
- You want full control over vessel selection, independent surveyor, and insurance policy
- You are an experienced commodity trader buying on a back-to-back basis
💡 FOB is the preferred basis for large-volume buyers and traders who optimise freight independently. OLVIA quotes Crude Sunflower Oil (CSFO) on FOB basis from Ukrainian Black Sea ports.
CFR — Cost and Freight
What CFR means
Under CFR (Cost and Freight), the seller arranges and pays for ocean freight to the agreed destination port. Risk transfers to the buyer at the port of loading — same as FOB. The key difference: the seller handles the freight booking.
Example: CFR Rotterdam · CFR Istanbul · CFR Alexandria
Who does what under CFR
- Seller: export clearance, loading, ocean freight to destination port
- Buyer: marine insurance, import clearance, discharge costs
When to use CFR
- You prefer not to arrange freight but want to carry your own cargo insurance
- You have an open cargo insurance policy covering bulk vegetable oils
- You trust the seller’s vessel selection and freight arrangements
💡 Under CFR, the buyer bears risk of cargo loss during the voyage even though the seller paid freight. Always verify your insurance covers the period from loading.
CIF — Cost, Insurance and Freight
What CIF means
Under CIF (Cost, Insurance and Freight), the seller arranges freight and also procures minimum marine cargo insurance (Institute Cargo Clauses C) for the buyer’s benefit. Buyers may negotiate ICC (A) all-risks cover.
Example: CIF Ravenna · CIF Port Said · CIF Piraeus
Who does what under CIF
- Seller: export clearance, loading, ocean freight, minimum ICC (C) cargo insurance
- Buyer: import clearance, discharge costs, any insurance top-up
When to use CIF
- You want a single all-in landed price including freight and basic insurance
- You are a first-time importer or smaller buyer without established freight contacts
- You are comparing landed costs across multiple origins
💡 CIF price is always higher than FOB — it includes freight and insurance margin. Always request both FOB and CIF quotes to benchmark the freight component.
FOB vs CFR vs CIF: Side-by-Side Comparison
| FOB | CFR | CIF | |
|---|---|---|---|
| Risk transfers at | Port of loading | Port of loading | Port of loading |
| Freight paid by | Buyer | Seller | Seller |
| Insurance arranged by | Buyer | Buyer | Seller (min. ICC C) |
| Export clearance | Seller | Seller | Seller |
| Import clearance | Buyer | Buyer | Buyer |
| Price level | Lowest | Medium | Highest |
| Best suited for | Traders / large importers | Experienced importers | Smaller buyers / first imports |
Practical Notes for Sunflower Oil Shipments
Minimum order quantities and vessel sizes
Bulk sunflower oil is typically shipped in chemical or vegetable oil tankers ranging from 3,000 to 30,000 MT. Most sellers set a minimum order quantity (MOQ) of 500–1,000 MT per parcel. Full vessel charters start from approximately 3,000 MT.
IMO classification and tank coating
Sunflower oil (CAS 8001-21-6) is classified as IMO Ship Type 2(k) and MARPOL Annex II Category Y. The carrying vessel must have appropriate internal tank coatings compatible with vegetable oils.
- Crude sunflower oil: FFA typically 0.5–2.0%, Acid Value <4
- Refined (RBD) sunflower oil: FFA typically <0.1–0.3% — compatible with all standard vegetable oil coatings
Standard documentation
- Bill of Lading (original 3/3)
- Certificate of Quality & Quantity — SGS / Bureau Veritas
- Certificate of Origin / EUR.1 (EU preferential duty)
- Phytosanitary certificate
- Certificate of Analysis (COA) per lot
- Commercial invoice and packing list
Payment terms
- Letter of Credit (L/C) at sight — preferred for new counterparties
- CAD (Cash Against Documents) — for established relationships
- TT in advance — for small spot trades with trusted sellers
Which Incoterm Should You Choose?
There is no universally best Incoterm — the right choice depends on your logistics capability:
- Choose FOB if you have freight relationships and want full cost control
- Choose CFR if you want the seller to handle freight but maintain your own insurance
- Choose CIF if you want a simple all-in price and are new to bulk oil imports
For repeat buyers, FOB is almost always more cost-efficient once freight relationships are established — the freight component in a CIF quote always includes the seller’s margin.
Request a Quote from OLVIA
OLVIA S.R.L. is a sunflower oil producer and exporter based in Romania (Galați Free Zone).
- Crude Sunflower Oil (CSFO) — available now, FOB Ukrainian Black Sea ports (Odesa / Chornomorsk)
- Refined Sunflower Oil (RBD) — production launching Q1 2027 from our Galați Free Zone refinery, Romania · FOB / CFR / CIF
We provide: competitive pricing · SGS pre-shipment inspection · full EU import documentation · reliable supply.
📧 sales@olvia.ro · 📞 +40 727 787 313 · 🌐 olvia.ro