Alternative for overseas buyer to avoid price volatility in sourcing crude coconut oil from Indonesia

One alternative that can be employed by the overseas buyer to avoid the price hike or price volatility when trying to source crude coconut from Indonesia is to put together an umbrella contract with the suppliers and to pay for deposit at least 2 weeks prior to placing their actual order.

By signing an umbrella contract, the buyer would be reserved by the supplier to get the commodity at the agreed price. This would give the buyer a form of protection when the price does go up, usually during the period where mature coconut and copra are not in their peak season. Nonetheless, one thing that the buyer must also be aware of is the portion of payment deposit that they need to make that can soar as high as 50-70% of the total price of the coconut oil.