Barter Financing Model – Coffee for Fertilizer

Description
This project outlines a structured barter deal between a West African coffee cooperative and a BRICS fertilizer exporter, enabling both parties to secure essential goods without cash transactions. The agreement is backed by legal guarantees and supported by a Standby Letter of Credit (SBLC) to ensure compliance and minimize risk.

1️⃣ Parties Involved

• West African Coffee Cooperative

  • Provides green coffee beans (graded and certified for export).

  • Represents multiple smallholder farmers under a national cooperative framework.

  • Committed to sustainable production and quality assurance.

• BRICS Fertilizer Exporter

  • Supplies premium NPK fertilizers and agricultural amendments.

  • Registered exporter with proven track record in Africa.

  • Ensures timely shipment and compliance with local import standards.

• Facilitator (Projet Assistance – France)

  • Acts as intermediary for deal structuring, partner verification, and coordination.

  • Manages documentation, valuation, and compliance.

2️⃣ Product Valuation & Exchange Ratio

• Coffee Export Value

  • Volume: 1,000 metric tons of green coffee beans

  • International Reference Price: NYSE Coffee "C" Contract price + quality premium

  • Estimated Value: USD 3,000,000

• Fertilizer Import Value

  • Volume: Equivalent value in metric tons of NPK 15-15-15 and Urea

  • International Reference Price: CIF West Africa

  • Estimated Value: USD 3,000,000

• Exchange Ratio

  • Value-for-value exchange based on international market prices, adjusted quarterly.

  • Any price differential settled by partial delivery in subsequent shipments or adjusted quantities.

3️⃣ Delivery & Logistics Plan

• Incoterms:

  • Coffee: FOB Abidjan/Lagos/Accra Port

  • Fertilizer: CIF same port of discharge

• Shipment Schedule:

  • Coffee: 4 shipments of 250 MT each over 6 months.

  • Fertilizer: Delivered in 3 shipments matching agricultural calendar.

• Logistics Coordination:

  • Cooperative arranges export documentation, customs clearance for coffee.

  • Exporter manages import permits, port handling, and inland distribution for fertilizer.

4️⃣ Legal & SBLC Guarantee Clause

• Legal Framework:

  • Barter agreement governed by UNCITRAL Model Law on International Commercial Contracts.

  • Dispute resolution through international arbitration (ICC, Paris).

• Guarantees:

  • Standby Letter of Credit (SBLC) issued by cooperative's partner bank in favor of fertilizer exporter.

  • Performance Bond by fertilizer exporter in favor of coffee cooperative.

  • Both guarantees released upon full delivery confirmation.

• Risk Management:

  • Insurance covering transport, loss, and political risks (MIGA, Atradius, or similar).