What is CIF? The Chinese translation of CIF is Cost Insurance and Freight (insert named port of destination). Under this term, the price of goods includes the usual freight from the port of shipment to the agreed port of destination and the agreed insurance premium. Therefore, in addition to the same obligations as under the CFR term, the seller must also arrange for freight insurance for the buyer and pay the insurance premium. According to general international trade practices, the insurance amount purchased by the seller should be based on the CIF price plus 10%.
If the buyer and seller have not agreed on specific insurance types, the seller only needs to obtain the minimum insurance type. If the buyer requests war insurance, the seller should provide additional insurance on the premise that the insurance premium is borne by the buyer. When the seller takes out insurance, if possible, it must be insured in the contract currency.
How to calculate CIF price?
CIF USD total price = (FOB USD unit price x quantity + total freight and other miscellaneous charges) / [1-(1+insurance premium rate) x insurance premium rate]
Note 1:
FOB={{1-[tax refund rate/(1+VAT rate)]}xRMB price including tax}/exchange rate
Formula analysis:
FOB = (RMB price including tax - tax refund income) / exchange rate
Among them: Tax refund income = RMB tax-inclusive price × [tax refund rate/(1+VAT rate)]
but:
FOB = {RMB price including tax - {RMB price including tax × [tax refund rate/(1+VAT rate)]}}/exchange rate
FOB = {{1-[tax refund rate/(1+VAT rate)]}×RMB price including tax}/exchange rate
This program only calculates a cost price, that is, it only considers the value of the product, without considering other costs such as freight from the factory to the port, port charges, transaction fees, etc.; if you are a foreign trade company, this program does not take profit into account.
Note 2:
If you fill "0" in the insurance premium rate and insurance premium rate boxes, you will get the CFR total price.
Note 3: Total freight and other miscellaneous charges
You can include all the freight and other non-refundable expenses in this item, such as profit, etc., but please note that it must be converted into US dollars (for the exchange rate, please visit the ICBC RMB spot exchange rate; if you want to know the exchange rates of other countries' currencies
Note 4:
About insurance premium rate and insurance premium rate
The insurance premium rate is generally 10%. Regarding insurance rates, you can contact the insurance company or freight forwarder. There will be certain differences depending on the region and type of insurance you are visiting.
FOB Price Calculator CIF Price Calculator
FOB, CFR and CIF conversion:
1. FOB price converted to other prices CFR price = FOB price + foreign freight
2. CIF price = (FOB price + foreign freight) / (1-insurance premium × insurance rate)
3. CFR price converted to other prices FOB price = CFR price - foreign freight
4. CIF price = CFR price / (1-insurance premium × insurance rate)
5. CIF price converted to other prices FOB price = CIF price × (1-insurance premium × insurance rate) - foreign freight
6. CFR price = CIF price × (1-insurance premium × insurance rate)
This is the end of the introduction to CIF in this issue. If you want to get more information about CIF, please pay attention and we will continue to answer your questions~
