Guides to international commodity trading

A broker connects buyers and sellers and earns a commission, while a trader buys goods on its own account and resells them. Andalucia Premium works as a broker: we do not take market positions or hold stock, we structure transactions between verified companies.

Usually through a commission agreed in writing before the transaction, typically paid by one or both principals once the deal has been settled. The amount and the paying party are part of the contractual documentation and are never hidden in the price.

It depends on product, quantity and route, but several weeks is typical. Verification, negotiation and opening of the payment instrument usually take longer than the shipment itself.

We check whether the request is realistic and whether we can serve it, then start the know-your-customer check. Only after verification do we approach suitable counterparties and exchange commercial documents.

For new trading relationships, a confirmed irrevocable documentary letter of credit usually offers the most balanced protection. The seller is paid against compliant documents and the buyer pays only against proof of shipment.

A letter of credit is the payment mechanism itself: the bank pays when compliant documents are presented. A bank guarantee or standby letter of credit only pays if one party fails to perform, so it works as security rather than as the normal way of paying.