How to verify a commodity supplier before you sign: a 10-point checklist

International commodity buying has an uncomfortable feature: the documents that make a deal look real — offers, spec sheets, "proof of product" — are trivially easy to fabricate, while the checks that actually prove a supplier is real take a few hours of work that most buyers skip. Fraud in this market almost always exploits that gap. The good news is that a genuine trading company can pass every check below without hesitation, so the checklist costs you nothing but time and costs a fake supplier the deal.

1. Confirm the company exists — in the official registry

Every legitimate supplier is a registered legal entity. Ask for the company's registration number and registered name, then verify them in the country's official registry rather than trusting a PDF. In Thailand, that is the Department of Business Development (DBD); in Brazil, the CNPJ registry. Match the registered name to the name on the offer, the contract and the bank account. Mismatches are a red flag.

2. Find the people

Real companies have named directors and staff with a footprint you can find — a LinkedIn profile, a listing in the company registry, prior trade references. Be cautious of a supplier where every contact is a first name on WhatsApp and nobody will state their role or appear on a video call.

3. Ask to meet — in person or on video

Ask for a video call, and if the volume justifies it, visit. A supplier who trades from Bangkok should be able to meet you in Bangkok. Reluctance to be seen is one of the strongest signals in this whole list.

4. Check the domain, the email and the phone

Look up how long the website's domain has been registered and whether the site is more than a template. Check the phone number's country code matches where the company claims to be. A generic-email address (Gmail, Outlook) is not proof of fraud — many small traders use one — but it should prompt the other checks rather than replace them.

5. Sanity-check the price against the market

Sugar, rice, copper and aluminium are all priced against public benchmarks. An offer meaningfully below the market — especially for premium grades like ICUMSA 45 or copper cathodes — is not a bargain; it is the bait. Genuine suppliers quote at, near, or above market depending on terms, and can explain why.

6. Insist on a banking instrument — never upfront transfers

The safest structure for both sides is an irrevocable letter of credit (or another secured instrument agreed by both banks), payable against documents that prove shipment. Any request for a "commitment fee", "registration fee", or partial payment by wire before goods are inspected and loaded should end the conversation. Your bank is a free second line of due diligence: an LC forces the counterparty to be a real, banked company.

7. Require independent inspection at origin

Before cargo is sealed, an independent inspection company should verify weight, grade or purity, and packing, and issue a report you receive before shipment. A real supplier expects this; a fraudulent one will find reasons it isn't possible. For extra assurance, nominate the inspection agency yourself.

8. Know the document set — and read it

A complete shipment carries a commercial invoice and packing list, certificate of origin, quality/inspection certificate, phytosanitary certificate for food products where required, bill of lading, and an insurance certificate on CIF terms. Ask which documents you will receive and when the bill of lading is released. Vague answers about paperwork usually mean there is no cargo behind the offer.

9. Understand what kind of company you're dealing with

Producers, trading companies and brokers are all legitimate — but you should know which one you have. A trading company contracts with the producer and takes responsibility for the shipment; a broker passes your enquiry along a chain and controls nothing. Ask directly: "Do you contract with the refinery/mill, or introduce me to someone who does?"

10. Watch for the classic red flags

• Pressure to sign or pay quickly; "the allocation expires today"
• Refusal to do a video call or meet
• Payment requested to a personal account, a different company, or a different country
• "Proof of product" videos or SGS reports that can't be verified with the issuer
• Perfect English documents with a company that has no findable history
• An offer that lands unsolicited with a price far below market