Every other day there is a talk about the importance of switching to sustainable alternatives and Areca Palm Leaf Plates is the best way to start. The people in the US are switching to this alternative quite quickly and if you are a dealer then you probably already knew this.
The rise in the demand for the Areca Palm Leaf Plates can cause worry for the importers because most of the time they have to pay extra on importing charges to meet the demand. However, nothing of this sort will happen if you are dealing with KKN Exports, Shimoga, Karnataka in India. The company brings the best CIF deals for the importers and in this article, we will tell you how CIF Price is calculated in the Areca Palm Leaf Plates Exports?
KKN Exports situated in the Areca fields of the Shimoga, Karnataka in India has got the best quality of the Areca Palm Leaf plates in the whole country. The company deals with the importers based on the CIF price and is ready to bear the risk from the manufacturing unit to the importer’s port.
Calculating the CIF Price In the Areca Palm Leaf Plates Exports
Before starting with the actual calculation of the CIF, let us have a look at what exactly is CIF and why was the term introduced in the International Trade.
CIF Value stands for Cost, Insurance, and Freight value. The term CIF value is one of the Incoterms (International Commerce Terms) that were introduced by the WTO, to resolve the conflict between the seller and the buyer in international trade.
To get a clear idea about what is CIF value you need to understand the terms EX Works and FOB.
EX Works Value
To explain this term let us take up an example, suppose you are a buyer and you want to import a product from India to your country. You will contact the seller and give him the demand.
The buyer will tell you the cost per piece that includes his profit. This cost is known as the Ex Works.
Let us carry forward the example given above, FOB stands for “Free On Board”. Now, the buyer must ask for the FOB. FOB includes the custom charges and transportation charges from the manufacturing company to the seller’s port. The seller is responsible for any damage to the product from the manufacturing company to the time the container is loaded on the ship.
Once the product’s container is loaded onto the ship, it becomes the buyer’s responsibility in FOB. If the product bears any damage in transit or transportation then the company pays for the loss. The CIF includes all the charges that FOB carries plus the insurance and the freight charges.
Which Value Is Better From The Buyer’s Point Of View
KKN Exports always wants the best for its customers. So, the company insists on the CIF for the Areca Leaf plates export. As we have said earlier, with CIF value it becomes the sole responsibility of the company to transport the product from the company directly to the buyer’s port. If the products bear any damage or any mishap happens such as the container is lost or something else, then KKN Exports will pay for the loss of the customer.
How CIF Price Is Calculated In The Areca Palm Leaf Plates Exports?
CIF Price includes the Goods Price, the insurance value, and the Freight value. In simpler words, if we write down the formula to calculate the CIF value then it is,
CIF Price = Cost Of Good + Insurance Price + Freight Value
CIF Value = FOB Value + Insurance Price + Freight Value
Cost Of Product
The cost of the product includes the Ex Works value, the transportation cost, the labor used in loading and unloading, customs duty, and all the other charges that the seller is paying from transporting the product from the manufacturing company to the shipping vessel.
Insurance plays a vital role in the CIF value transportation for the seller. It is necessary to get insurance for the product you are exporting, if any mishap happens you must be ready with the backup.
Generally, a company pays 0.05 percent of the CIF price as a premium to the insurance company. However, in case of an accident, the company pays back 90 percent of the amount. If the seller wants to claim 99 percent of the total amount from the Insurance company then, the seller could insure the product for 110 percent. It is the most common practice used nowadays.
Freight Charges are the shipping charges that the Seller pays to the ship owners for transporting product from the seller’s port to the Buyer’s port. In simple words, the charges paid by the buyer in CIF are called the freight charges.
The CIF value is the sum of all the three charges mentioned above.
KKN Exports is an Indian Company located in Shimoga, Karnataka in India. The calculation of the CIF value is carried out in a bit different way in India. The goods charges or the FOB charges by KKN exports are fixed as it includes the Ex Works and the transportation charges.
However, when it comes to Insurance and freight charges, KKN Exports contacts the best CHA (Customs House Agent) in the country and they help KKN Exports in making the best deal for the customer.
Details To Share With CHA To Get Best Deals
CHA (Customs House Agent) is the legal authority in India. It keeps records of all the import and export of the goods at the customs station. The CHA agent provides the best deal for shipping the product cross border through the sea route.
To get the best deal you need to share as many details as you can. You can go through the list of details to share provided below.
- Product – The first thing to tell the CHA is the product you are exporting. For example, in our case, we will tell them Round Areca Leaf Plates are to be exported.
- Location – Next, they will ask about the location of the factory that is KKN Exports, Shimoga, Karnataka, India.
- Loading and Unloading Port – You need to tell them the port you are using for transportation and the destination port. Many destination ports have extra freight charges, the CHA will take care of them.
- Quantity – The quantity of the product being exported matters, it includes the weight and size of the product. Well, as far as Areca leaf plates are concerned, we don’t have to worry about weight. They are super light but extremely durable.
- Date of Shipment – The date of shipping is an important factor. There is a fluctuation in the rates of regular bases. So, we have to be ready with the date.
Based on the information provided by us, the CHA will make the best deal for buyers.
This was all about how the CIF price is calculated in the Areca Palm Leaf Plates by KKN Exports. The company goes through the various CHA agents and the transportation company to bring out the best deal for the customer. So, if you are planning to buy Areca Palm Leaf plates then why not from us. We will bear all the risks in the route, from the manufacturing company to your importing port.