Trading Secondary Contracts

[Matunaagd]

Hello Mr. Papa, I have reviewed some of the past Q & A that you have provided and throughout you refer to oil being available to the intermediary only as a secondary market deal. If that is the case then am I correct to assume that these "secondary offers" only become available if the End buyer fails to close the primary market deal? Is this the only situation in which an intermediary will be given an offer? Does this situation primarily exist with Oil suppliers or will I have the same difficulty obtaining an offer for dealing in other comities as well? I have read your answers to other would be traders and you frequently say that it may take a lifetime before an Oil deal "falls into your lap", and I just want to know if the same holds true for all commodities.

Thank you-

ANSWER: Dear William

Do did not ask a relevant question and have asked me to make comment out of context.I can't go back to 2001 an check every reply.I would probably have thousands of pages to read.

I suggest you read the whole section again.The whole allexperts site answers  is linked as one study. It won't delivery the procedures because there is so much meandering aspects of such which has not been defined. "Fall into your lap " is use in my doctrine as a short way of saying - 'You've spent a year of more studying the doctrine and practicing such slowly until finally your are ready for that one real deal which finally falls into your lap' I think I have answered around  700 question- so if you say that I used the term 'frequently' - That part is probably right.

It's obvious though you did not find the page or pages that I also 'frequently' state the difference between a secondary market and primary market commodity. Secondary market - Non OPEC suppliers , private allocations . Primary markets- Those 'sellers' who insist the intermediary surrender up front, refinery number and the likes, no offer not nothing. Such a deal must not be enacted by intermediaries.

My last expert opinion was served this year to london lawyers defending a intermediary selling many crude oil shipments from SOMO Iraq- who was locked up in a U.K prison after taking a holiday in that country - he closed those deals way back in 2002, as was still caught , 8 years later. I also wrote  7 or 8 years ago about intermediaries in Florida shafted by a Sth American oil producer- a per a huge  article in the Florid times- The trail led all the way to a New York Bank - all 5 intermediaries were circumvented. Other commodities? A bunch of Jordanian intermediaries working and living in a tin shed managed to close Australian Wheat sales - They made over a ten year period an estimated 300 million dollars.It was a huge scandal down here. Intermediaries selling armored plated  Range Rovers into Nigeria from USA was another recent  expensive legal  opinion served_ they too in a U.K Prison.     

Yes, intermediaries can score crude  oil deals- and in all case as per above examples had they followed a few simple rules as defined in my doctrine - nobody would have been arrested.

Crude oil is the holy grail deal- If you look on my site smice.net I do have supply of bulk commodities for sale. Sometimes I have too many products , sometimes a I have none.  I have had in the last 4 years around  2 crude oil offer and 3 fuel offers, from the many offers sent to us - 99% were fake.

It's the holy grail because of the size of the shipments and because the possibilities  of some very large commission . The answer your question specifically to crude oil versus other commodities - Sourcing real crude crude oil is much harder. Last year we had plenty of sugar, very few buyers - this year we have had no sugar offer 6 months - and heaps of buying  inquiries.

This intermediary business  existed long before I came along in 1988. I came along and had to put the who practice 'in order' In recent year , our efforts to create uniformity in this industry is starting to become effective.

This business is very complex very difficult. I've always stated that form day one -It's always difficult to secure  supplier and end buyers- If one trade with BCL, LOI, MPA and ICPO and the likes no deal will ever fall onto their lap is assured.If one uses our "Legally defined' and workable doctrine  the issue is not if the doctrine can close a deal - The issue is if a' deal falls onto you lap' you'll know what's needed to close such properly as far as intermediaries  are concerned. I can't know if an intermediary  is able to write offers correctly or has understood the doctrine- And! all because I may have closed a number of deals myself- that does not either reflect that YOU will also close deals. It took me around 6 years of FULL time trader to land my first contract and that;s after going to college to learn international trade matters - which didn't give me anything to work with as it applied to intermediaries(See; old site sugar contract:   www.exportexpert.freeservers.com) If one thinks that they wake up one morning and say - 'Gee whiz, all my friends are trading in commodities - I can do as much." If one thinks they can buy a book and become a  informed 'import export  intermediary overnight' they can't. If they tried , that deal will never land on their lap. And! If by some chance it did , they will never see a cent in commissions . 99% of trader on line have no idea what they are doing- and for all intentional purposes  will never have a deal fall on their lap, let alone close. I hope the above answers your questions and is of help.If one is going to try and doe deals as a import export intermediary , they at the very least need to be informed, or that deal will never 'fall on their lap.' Please read old site: wwww.ftnx.9f.com

Please read URPIB rules: www.ftnexporting.com

Please read www.ftnexporting.com front page

Regards

Davide Papa

www.smice.net

---------- FOLLOW-UP ----------

Thank you for your reply , It was helpful. I noticed on your SMICE website that you now accept offers for FCL and that some Products such as Consumer Wares, most Consumer Electronics, Toys, Clothes, Fabrics, Wines, Drinks, Shoes are not considered. Does the Intermediary trade procedure that you teach not work for these types of products or is it that you just not prefer to deal with such products?

I am assuming that since your doctrine is the only way an intermediary can effectively trade within the legal limits of international business then it should work for any products an intermediary wishes to import/export?

Is this a correct assumption?

[Marc]

Dear William

Your assumptions are correct so long as products you trade in don't breach URPIB rules which  work in hand with the doctrine(see; URPIB www.ftnexporting.com)

FCL are fine for large quantities of wanted goods usually exceeding 1000 MT, as commission will be otherwise slim for the amount of work needed to apply on some items. That's the reason. Also if you are going to trade in many FCL you need paid staff- Plenty of them to make any reasonable money.

We get so many offers for such items every day, which we don't consider.

I have toys or wine of even coffee to sell- Soi much information needs to be advices- Then we have problems with buyer? Whats' it made of , what colour ..Can I have sample..etc.. It's too dear...etc.. at the end of it you seal a deal for One FCL and earn a few hundred dollars. Also compared to bulk cargo m FCL are much easier apply .

The doctrine is aimed at big break cargo shipment but as you stated I did mention a section about FCL as the interaction are the same , except FOB is FCA and CIF is CIP- Smice site has FCL  information as well.

Regards

Davide Papa

www.smice .nett