What SGS and Intertek actually verify at loading
The most valuable document in a trade is not the one from the last shipment. It is the report on your cargo, at loading, by an inspector you accept.
By Hugo Amanajás
The most valuable document in a commodity trade is not the one from the last shipment. It is the report on your cargo, produced at loading, by an inspector you have accepted. Everything else is a claim waiting to be tested. Independent inspection is how the claim gets tested.
What the inspector checks
- Quality: samples are drawn and tested against the contract specification. For sugar that means colour, polarisation, moisture and ash.
- Quantity: the actual load is weighed or gauged, so the buyer pays for what ships, not for what was promised.
- Packaging and marking: the condition of bags, jumbo bags or bulk, seal numbers and container condition.
- Loading supervision: where agreed, the agency oversees stuffing and keeps a tally of what goes on board.
Why on your cargo, and not a past one
A certificate from a previous shipment, even a genuine one, describes sugar that belonged to a different buyer and is long gone. It says nothing about the tonnes going onto your vessel. Recycled and forged inspection reports circulate in volume precisely because they look convincing on the page. The verification that carries value is the one performed on the specific cargo you are paying for, at the moment it loads. If you remember one thing, remember that a past document is history, not evidence.
Who chooses, and who pays
The buyer can nominate the agency, usually SGS or Intertek, and the scope is agreed in the contract. Who pays for the inspection is itself a contract term and can be negotiated. What should never be up for negotiation is the principle: independent verification at loading, against the written specification, by a recognised third party. A seller who resists that is resisting the single check that would confirm an honest cargo.
/ Inspection closes the loop the letter of credit opens
The letter of credit pays against documents. Inspection makes sure those documents describe real, conforming goods. Put them together and the buyer is relying on a structure, not on anyone's word. That is the entire design.
The full documentary procedure referenced here is published on our Procedures page.
View Procedures/ About the author
Hugo Amanajás
Hugo Amanajás is an engineer and commodities broker, and the founder of Juros e Bolsa, a CVM-authorised investment advisory in Brazil. He works on the origination and structuring of Brazilian commodities and writes Duna Trading's Insights on how the physical trade actually works, from documentary procedure to compliance.
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