Question

A German importer's offer was Euro 400 per M/T CTF Hamburg. However the Chinese

exporter's planned price Was RMB 2978 per M/T FOB Shanghai. Now the exchange rate is 100

Euro for 890 RMB. If the freight costs from Shanghai to Hamburg accounted for RMB 90 per

M/T and the insurance premium was RMB 50 per M/T, would the Chinese exporter accept the offer of German importer? Why?

Answer 1

Since there is a mention of FOB incoterm, it means the buyer is responsible for the freight and insurance expenses.

The Chinese Exporters planned price,

2978 RMB per M/T, which at an exchange rate of 100 Euro for 890 RMB is equivalent to 334.6 Euro per M/T

Plus all the freight cost and insurance premium would be borne by the German Importer who is offering a price of 400 Euro per M/T. So it is a good deal for the Chinese Exporter to accept the offer of German Importer

answered by: anonymous