Commodity trade attracts fraud as well as genuine business. Fake offers for sugar, diesel, fertilizer and coal are common, and they often ask buyers to pay fees or send bank documents before any cargo exists. A few systematic checks protect you before you commit money.
1. Confirm the company exists
- Look the company up in the official business register of its country and match the registration number, address and directors.
- Check that the website, email domain and phone number match the registered company.
- Be wary of free email addresses and of companies whose name closely imitates a known producer.
2. Check the product and the seller’s role
- Ask whether the seller is the producer, a distributor, a mandate holder or a broker, and for proof of that role.
- Request a recent certificate of analysis and the specification you will be contracted on.
- Ask which independent inspection company will certify quality and quantity at loading.
3. Watch for common red flags
- Prices well below the market.
- Requests for advance fees for documents, licences or “proof of product”.
- Payment to a personal account or to a company in a different country from the seller.
- Pressure to sign quickly, or documents that contradict each other.
- Unwillingness to accept independent inspection or a bank payment instrument.
4. Use secure procedures
- Pay through bank instruments such as a documentary letter of credit or SBLC, not unsecured transfers.
- Make the contract name the inspection company and the documents required for payment.
- Consider a trial shipment before a long-term contract.
- Visit the facility or appoint an agent to do so once the contract stage is reached.
5. Screen for sanctions and restrictions
Check the company, its owners, the vessel and the origin against applicable sanctions lists, such as those of the UN, the EU or the US, and confirm that the product is not restricted for import or export.
How Agromer handles it
Our offers follow a written procedure: an end-buyer LOI, a full corporate offer, a sales and purchase agreement, payment by 100% DLC or SBLC, and SGS inspection. Factories and suppliers can be visited after the SPA is signed and the draft LC (MT760) is received. See our trading process and trade compliance pages.
This article is general guidance, not legal advice, and no check can rule out every risk. Take advice from your bank, lawyer or compliance team for significant transactions.