Please read the following carefully as this will decide if MTT Foods can work with you or not :
We do not work with a daisy chain of brokers. This means if you approach MTT Foods, you should be direct with your principal (end buyer or end seller). NO exceptions what so ever. Being new in business in not bad but you should do your homework. We receive tons of emails where individuals claim to be "close" to the seller/buyer, but over the years we have understood clearly that being "close" is not being direct. We are not here to teach business to every individual that emails us, please do your homework. It is always difficult to work when there is no transparency.
Even the most genuine deals fall apart because of brokers. Many do not know the proper procedure and do not do the required due diligence. Almost 99% of the times, brokers do not trust each other and do not want to disclose vital information and are afraid of circumvention. They do not retain the services of a corporate lawyer or trade consultant. MTT Foods will stay away from this disaster at all costs because our reputation is most important to us. We start everything with an in house due diligence.
NCNDA / IMFPA
The first thing any amateur broker will pop up is that we have to sign the NCNDA (Non Circumvention Non Disclosure Agreement) and MFPA (Master Fee Protection Agreement). First of all, almost all the NCNDAs and IMFPAs floating in the market are FAKE and not endorsed by ICC. You ought to understand that we do not have any problem with signing NCNDA but it has to be genuine. We only utilize the genuine ICC publication 769 E ( ICC Model Contract ) that can be purchased here.
Any other NCND you see with the ICC logo and mostly titled ICC 400/500/600 is fake. Read the official warning from ICC here. Then there are those who claim to be mandates and then ask for an NCNDA; beware of these individuals and companies. Real mandates never fears circumvention as they are protected by the company who extended the mandate to them.
Secondly, MTT Foods cannot just sign the NCND with every individual and company that comes along claiming to be direct with their principal. Be ready with detailed information about your company, website, corporate profile, registered office address, working phone numbers to begin with. Not all but most emails from gmail, yahoo, hotmail etc will be purged.
99% of deals which have a low fixed price are false, are simply scams and there is no product available. A real seller will in almost all the cases only sell with a discount off a real based price for example AG Platts. The deals which sell for a fixed price are mostly spot deals and they have a time window of a few days. Within this time, they are normally sold, however, it happens sometimes that an amateur broker gets access to it and starts forwarding the offer all around the world for months and months after the deal has already been closed. The brokers will insist that the offer is genuine with no idea that commodities have already been sold and delivered months ago.
In any real offer there will never be a huge discount or huge commissions to intermediaries . It NEVER happens. So when you see a huge discount and/or huge commissions to intermediaries, it is more than likely that the deal is fake.
Most of the times, a real seller would never offer "real products" to a broker that cannot even spend a few thousand dollars on a website and uses a gmail, yahoo, hotmail or other free email id, has no verifiable office address and has no or very little online presence. The real seller would call a reputed and responsible multinational like MTT Foods and sell directly through them.
When an offer starts off with keywords like "Please send pictures, past performance first, LOI to End Seller (no proper seller name), need to sign IMFPA first, We know the seller/buyer through uncle/friend/relative, cannot disclose the seller" you should immediately understand that this means that they don't know the end seller/end buyer or if there is any, they are just forwarding the mail that they got from another broker who in turn got it from yet another broker. They have not done any due diligence even if they know a company who they think is the principal.
MTT Foods suggests you learn the language, and please do not send us the kinds of offers or inquiries that starts off with the above mentioned criteria. Please just purge them or put them straight into a trash can, which is exactly what we would do.
MTT Foods only works with those who are willing to put their ego aside. We do not have time to stroke anyone’s ego. We at MTT Foods expect you to respect our corporate policies, our employees, time constraints (do not expect a reply or call on Saturdays and Sundays from our Canada office, Sundays from our India office and Fridays from our Dubai office). We expect you to follow the proper procedure and respect the terms and conditions of our principals. If you do not agree, please email us in a professional way.
Do not ask for past performance documents, it is not only unprofessional but also unlawful because almost all the time, the non disclosure clause protect the SPAs and as such no company should forward documents related to a completely different client and transaction. Also, past performance does not guarantee future performance.
We expect you to do proper due diligence before forwarding us any document or inquiry. As brokers, facilitators and traders, we feel that it is our corporate responsibility to do proper homework before forwarding anything to our principals.
In a nutshell, we can work with you if:
1. You have knowledge of the commodity.
2. You are direct with the end buyer/seller.
3. You are willing to exchange principal's details.
4. You have performed proper due diligence.
Sorry to say but those of us who are actually doing this commodity trading have become egoistic and those who are not actually doing any real business are not doing their homework.
1. Do not be hasty or greedy - Do not just forward anything before doing proper due diligence. Try your best to find out everything about the offer you received, the name of the company (if they mention another company, verify with them), their address, their website, how old they are by checking the domain name on whois.com etc.
MTT Foods Pvt Ltd always performs an extensive due diligence process that has always worked for us. So, now we can easily decide to move ahead or deny dealing with the prospect.
2. Think why would a multinational mining corporation or a well known refinery email "SCO" and not just approach public listed corporations that, they know, can perform. THEY JUST WON"T.
So, sorry to burst your bubble, the offer you received might just be FAKE. Unless you confirm with the principal company (that most of the times no one does), you can never know if the offer is genuine. Now, depending upon what you are asking and how you are asking, you may not even get a reply.
3. Have you ever tried to contact refineries or "end sellers"? For many of you, your answer is NO, maybe because you already thought that it would be a waste of time because they will never deal with brokers.
Let me first tell you how most oil refineries want to work. Well, you got one thing right, they don't want to work with brokers who don't know the industry. Again I never said the refineries won't work with brokers ! MTT Foods Pvt Ltd works directly with various refineries. So, again you have to do your homework. Find out how these refineries sell, for example most of the Russian refineries do not sell on CIF/FOB delivery basis and they do not issue 2% PB. Now, if a buyer approaches you and says that he is buying from an XYZ refinery in Russia CIF China and you already know that this XYZ Russian refinery does not export or sell on CIF China, you already have connected the otherwise invisible dots.
Again, many refineries would just appoint small LLCs for you to deal with. Other refineries just DON"T SELL ! They work on customer owned oil and are most of the time a subsidiary of or affiliated to a major. So let's say now you received an offer on the letterhead of such a refinery, again voila ! you have connected those otherwise invisible dots.
4. Same goes for your "end buyers" - Above points also apply similarly to buyers as well. PLEASE DO NOT FORWARD THAT LOI that you just received in email without verifying, trust me, you will be amazed that a simple in-house due diligence, without even spending thousands of dollars, can reveal tons about that LOI.
5. Do not work with a chain of brokers - The ease of closing the deal is inversely proportional to the number of brokers involved. More the brokers, the harder it is. Why? There are so many reasons, the topmost being lack of trust. The brokers will not share important information pertinent to the deal thus infuriating the principals and other genuine intermediaries.
All they would ask is to sign an NCND and that too with a fake document that is not even endorsed by ICC (only genuine ICC NCND is pub 769E, a document available for sale on http://www.iccwbo.org)
When this happens, there is no way to tell how many brokers are actually lurking in there. Henceforth, there can be no telling if there is even a genuine buyer or seller present or not.
MTT Foods Pvt Ltd never works with a chain of brokers for the reasons specified above.