Off-take and Marketing Agreements for Commodity Producers
For a producer, a secure outlet for production is the basis for planning investments, financing and operations. FUSHKOV GCG enters into off-take and marketing agreements with producers and processors, purchasing or marketing their output over one or several seasons on terms fixed in the contract.
What off-take and marketing mean
An off-take agreement is a long-term commitment by a buyer to purchase an agreed part of a producer’s output. A marketing agreement goes further: the trader sells the production to end buyers on the producer’s behalf or on its own account, using its customer base, logistics and market knowledge. Both give the producer predictable sales and the buyer a secure source of supply.
Who it is for
Typical structures (reference)
| Term | Typical options |
|---|---|
| Volume | Fixed tonnage, percentage of output or minimum and maximum quantities per period |
| Price | Fixed price, formula linked to a market reference, or basis-based pricing |
| Quality | Specification and tolerances, with independent inspection at loading |
| Delivery | Delivery basis under Incoterms 2020, shipment schedule and logistics |
| Duration | One or several seasons or years, with renewal terms |
Reference overview of commonly used structures. The scope of the service, the responsibilities of each party and all commercial terms are agreed case by case and fixed in the contract.
What we bring
We combine purchase commitments with the services needed to move and sell the product: sea, rail and multimodal logistics, payment and prepayment structures, and pricing structures. Our own production facilities in China allow value-added processing of selected products. Prepayment or pre-export finance linked to an off-take agreement is subject to KYC, credit approval and contract terms.
Why FUSHKOV GCG
Frequently asked questions
How long does an off-take agreement last?
Duration depends on the product and the project; agreements can cover one season or several years. The term and renewal conditions are fixed in the contract.
How is the price determined?
The price can be fixed, linked to a market reference by formula or set through a basis mechanism. The method is agreed in advance in the contract.
Can an off-take agreement include prepayment?
It can, where the transaction meets the requirements of KYC and credit approval and appropriate security is in place.
See also
Discuss your project
Tell us about your production, volumes, quality and location — we will discuss an off-take or marketing structure.
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