Two rice quotations can only be compared once they describe the same rice, packed the same way and delivered to the same place on the same payment terms. Convert every offer to a landed cost per quintal at your godown, for one written specification, one bag size and one set of terms. Done that way, the lowest headline rate is often not the cheapest rice. This guide lists the cost lines to check, works through an example and ends with a comparison sheet you can copy.
Key takeaways
- An ex-mill rate ends at the mill gate. Freight, unloading and transit arrangements are yours to add.
- Compare landed cost per quintal for the same specification, packing and quantity, not the headline rate.
- Bags, loading, brokerage, credit period and GST treatment can each change which offer is cheaper.
- A quotation is only comparable when the specification behind it is in writing.
In this guide
Why the headline rate misleads
Bulk rice is usually quoted per quintal (100 kg) or per kg, and sometimes per bag. A low rate can hide differences that matter more than the rate itself: a looser broken limit, a different finish, bags charged separately, freight left to the buyer, or payment in advance instead of on credit.
Start with the specification. Two lots sold under the same name can differ in broken percentage, colour, polish and whether they have been colour sorted. If one offer is for colour-sorted rice with a 5% broken limit and another is unsorted with no stated limit, the cheaper one is a different product. Ask every supplier to quote against the same written requirement; our bulk order checklist lists what that requirement should contain.
Put every quotation on the same basis
Go through each offer line by line. Where a line is missing, ask for it rather than assume it is included.
| Cost line | What to confirm | Why it changes the comparison |
|---|---|---|
| Rice and specification | Variety, process, finish, broken limit, moisture, approved sample | A different specification is a different product. |
| Packing | 26 kg or 50 kg bags, bag material, marking; bags included or charged | Bags and filling are part of the cost. |
| Quantity and lots | Total MT, number of lots, one-off or recurring | Freight per tonne depends on full vehicle loads. |
| Loading | Included at the mill or charged | Small, but often left out of the comparison. |
| Freight | Who books the vehicle, rate per trip or per tonne, waiting charges | Usually the biggest gap between ex-mill and delivered offers. |
| Unloading | Included in a delivered price or charged at your godown | Delivered prices often stop at the vehicle. |
| Brokerage | Who pays, and at what rate | A percentage added to every lot. |
| Payment terms | Advance, against documents, or credit days | Credit is worth money to you; advance payment costs you. |
| GST | Included, excluded, or stated as not applicable, and on what basis | It must be treated the same way across all offers. |
| Validity | How long the rate holds, and the lifting or delivery window | A rate that expires before you lift is not usable. |
GST treatment of rice depends on how it is packed and labelled, and the rules have changed over time, so do not assume two suppliers apply them the same way. Ask each to state on the quotation whether GST is included and on what basis. Your tax adviser and the CBIC GST portal are the references for the current rules, not this guide.
Ex-mill, delivered and export terms
Ex-mill means the rate covers rice packed and ready at the mill. You arrange the vehicle, and the contract should say who carries the risk once the load leaves the gate. Delivered, sometimes written as FOR destination, means the seller arranges transport to a named godown or address. Confirm whether unloading, waiting time and any local charges at your end are included.
For export, the delivery point and the split of costs and risks follow the Incoterms® rule named in the contract, such as FCA, FOB, CFR or CIF. SONIK can discuss ex-mill, delivered, FCA, FOB, CFR and CIF terms; whichever applies, the quotation should name it.
A worked example
All figures in this example are hypothetical, invented to show the method. They are not SONIK prices or current market rates.
A distributor needs 20 MT of one parboiled rice specification in 50 kg bags, which is 400 bags, delivered to its godown. Three suppliers quote:
| Item | Offer A | Offer B | Offer C |
|---|---|---|---|
| Quoted basis | Ex-mill | Delivered to godown | Ex-mill |
| Rate (hypothetical) | ₹3,450 per quintal | ₹3,620 per quintal | ₹3,400 per quintal |
| Rice, 200 quintals | ₹6,90,000 | ₹7,24,000 | ₹6,80,000 |
| Bags | Included | Included | ₹18 a bag: ₹7,200 |
| Freight, one truck (hypothetical) | ₹38,000 | Included | ₹38,000 |
| Unloading at ₹10 a bag | ₹4,000 | ₹4,000 | ₹4,000 |
| Landed cost | ₹7,32,000 | ₹7,28,000 | ₹7,29,200 |
| Landed cost per quintal | ₹3,660 | ₹3,640 | ₹3,646 |
The lowest headline rate, Offer C, is not the lowest landed cost. The highest headline rate, Offer B, is. The gap between B and C is ₹1,200 on the lot, about ₹6 a quintal, small enough that payment terms could reverse it.
Suppose Offer A came with seven days’ credit and money costs you a hypothetical 12% a year. That credit is worth about ₹1,685 (₹7,32,000 × 12% × 7 ÷ 365), which still leaves A dearer than B in this example. Advance payment works the other way: it costs you for the days between paying and receiving the rice.
Weight, bags and what a rate covers
Confirm the weight basis behind the rate. Ask whether the invoiced weight is the net weight of rice or includes the bags, whose weighbridge decides the quantity, and what tolerance applies between the mill weight and yours. The dispatch checklist shows how to read a weighbridge slip.
A rate per quintal converts simply to a rate per bag. At a hypothetical ₹3,450 per quintal, a 50 kg bag is ₹1,725 and a 26 kg bag is ₹897. SONIK packs rice in 26 kg and 50 kg bags; bag material and marking are covered in rice packing requirements.
Common mistakes
- Comparing a delivered offer with an ex-mill offer without adding freight and unloading.
- Treating the same variety name as the same specification.
- Comparing a rate that excludes bags with one that includes them.
- Forgetting waiting charges, or a second trip for a part load.
- Ignoring the date by which the rice must be lifted, and what happens to the rate if you are late.
- Leaving brokerage out because it is paid separately.
A comparison sheet you can copy
Fill in one column for each supplier, then compare the last two lines.
QUOTATION COMPARISON (one column per supplier) Supplier and date of quotation: Product, process and finish: Specification (brokens %, moisture %, colour, sorting) or approved sample reference: Quantity (MT) and number of lots: Packing (26 kg or 50 kg bags; material; marking; bags included?): Quoted basis (ex-mill / delivered / FCA / FOB / CFR / CIF): Rate and unit (per quintal, per kg or per bag): Loading included? (yes / no, rate): Freight (who books the vehicle, rate): Unloading at destination (included / rate): Brokerage (who pays, rate): GST (included / excluded / basis stated): Payment terms (advance / against documents / credit days): Validity of rate and lifting window: LANDED COST FOR THE LOT: LANDED COST PER QUINTAL:
To include SONIK in your comparison, send the same requirement through the bulk enquiry form: product or variety, quantity in MT, 26 kg or 50 kg bags, destination and when you need delivery. Prices are quoted against a specific requirement, and terms are confirmed in writing before production is scheduled. The product range lists what is milled at Ghentugachhi.
Sources
- International Chamber of Commerce. Incoterms® rules.
- Central Board of Indirect Taxes and Customs. CBIC GST portal, for current GST notifications and clarifications.
