Direct answer
Under FOB Bangkok, the Thai exporter's responsibility ends once the rice is loaded on board the vessel at Bangkok or Laem Chabang; the buyer then pays ocean freight, any marine insurance and all destination port charges. Under CIF, the exporter also pays ocean freight and minimum marine insurance to the destination port. In both cases, risk passes to the buyer once the rice is on board in Thailand. FOB suits buyers with contracted freight rates; CIF suits importers who want one delivered price per metric ton.
Key takeaways
- Under Incoterms 2020, risk passes on loading in Thailand under both FOB and CIF.
- CIF includes only minimum insurance, Institute Cargo Clauses (C); broader cover must be requested.
- Destination port charges, duties and import clearance are the buyer's cost under both terms.
- To compare offers, convert freight to a per-ton figure: a 20ft container holds about 25 MT of rice.
- "FOB Bangkok" is a market benchmark; the contract must name the actual port of loading.
FOB and CIF in one paragraph
FOB (Free On Board) and CIF (Cost, Insurance and Freight) are Incoterms 2020 rules published by the International Chamber of Commerce. Under FOB, the seller clears the rice for export and loads it on the vessel named by the buyer. Under CIF, the seller also books and pays the ocean freight to the named destination port and buys marine insurance for the voyage. Everything after the destination port, including unloading charges, duties and import clearance, stays with the buyer in both cases.
Where the risk really passes
This is the point many first-time importers miss: under CIF, the exporter pays for the voyage, but the rice travels at the buyer's risk. Risk passes once the goods are on board at the port of shipment, exactly as under FOB. If cargo is damaged at sea, the buyer claims on the insurance policy, which is why the insurance terms matter.
What CIF insurance actually covers
Incoterms 2020 requires the CIF seller to provide only minimum cover under Institute Cargo Clauses (C), usually for 110% of the contract value. Clauses (C) covers major events such as sinking, fire and collision, but not many ordinary causes of cargo damage. If you want broader all-risks cover under Institute Cargo Clauses (A), ask for it in the contract, or buy your own policy.
Shipment parameters for a 20ft container of Thai rice
| Parameter | Typical value |
|---|---|
| Net rice per 20ft container | About 25 MT (about 55,000 lbs) |
| Bags per container | About 500 x 50 kg or 1,000 x 25 kg |
| Moisture at loading | 14% maximum, stated on the quality certificate |
| Broken percentage | As contracted, e.g. 5% or 25% |
| Shelf life in transit | Milled rice keeps well if dry; condensation control recommended |
| Packaging options | PP, BOPP or jumbo bags; kraft lining and desiccants on request |
| Minimum order quantity | Agreed per order; a 20ft full container holds about 25 MT |
Typical values; confirmed in each quotation and booking.
How to compare an FOB and a CIF offer per metric ton
Rice is priced per metric ton, but freight is quoted per container. To compare offers fairly, convert your freight quote into a per-ton cost:
- Freight per ton = container freight quote ÷ tons per container (about 25 MT for a 20ft container of rice in 25 or 50 kg bags).
- Your delivered cost = FOB price + freight per ton + insurance per ton, then compare it with the CIF offer.
- Add destination costs, duties and inland transport separately: they apply under both terms.
Because rice containers fill up by weight, a 40ft container carries only slightly more rice than a 20ft, so 20ft containers are standard for bulk rice.
"FOB Bangkok" versus the actual port
Rice prices are widely quoted as "FOB Bangkok", which is a market benchmark. Thai rice is actually loaded at either Bangkok Port (Khlong Toei), a river port for smaller vessels, or Laem Chabang, Thailand's largest deep-sea port. Your contract should name the actual port of loading, for example "FOB Laem Chabang, Incoterms 2020".
Which should you choose?
Choose FOB if you have a freight forwarder or contracted ocean rates, want control over the shipping line and schedule, or import large regular volumes. Choose CIF if you are importing for the first time, want one delivered price per ton, or are paying by letter of credit and want the exporter to manage the booking. Read more on our export and logistics page.
Frequently asked questions
Is FOB or CIF cheaper for importing rice?
Neither is automatically cheaper. CIF includes freight and minimum insurance in the price. FOB can be cheaper if you have better contracted freight rates than the exporter, so compare both on a delivered cost per metric ton.
Does CIF mean the exporter is responsible until the rice arrives?
No. Under Incoterms 2020 CIF, the exporter pays freight and insurance to the destination port, but risk passes to the buyer when the rice is loaded on board in Thailand.
How much rice fits in a 20ft container?
About 25 metric tons (about 55,000 lbs) in 25 kg or 50 kg bags. Rice fills a container by weight, so a 40ft container carries only a little more.
Sources and further reading
- International Chamber of Commerce: Incoterms 2020
- Institute Cargo Clauses (A) and (C)
- Port Authority of Thailand: Bangkok Port and Laem Chabang
This guide is for general information. Regulations and market conditions change, so confirm current requirements with the relevant authorities and your advisers.
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