GAFTA Contracts Explained for Grain and Oilseed Traders
Quote from chief_editor on June 19, 2026, 5:30 pmWhat GAFTA contracts cover, how the main voyage and forward contract forms allocate risk, and how GAFTA arbitration operates when disputes arise in grain and oilseed trade.
GAFTA—the Grain and Feed Trade Association—is the London-based trade body that publishes standardized contract forms for the international trade of grain, oilseeds, pulses, animal feed, and related agricultural commodities. GAFTA contract forms are widely used in international transactions because they embody decades of commercial practice, carry predictable dispute resolution provisions, and are recognized by courts and arbitration tribunals in major trading jurisdictions. For traders buying or selling grain and oilseeds in international commerce, GAFTA forms are not merely a template but a structured risk allocation framework whose default terms have significant commercial consequences.
The Main GAFTA Contract Forms and What They Cover
GAFTA publishes more than 80 contract forms covering different commodities, delivery bases, and trade routes. The most widely used forms in bulk grain trade are GAFTA 100 (grain in bulk, for shipment), GAFTA 49 (wheat and wheat flour), GAFTA 119 (oilseeds), and GAFTA 78 (contracts of affreightment). Each form specifies default terms for a particular commodity type and trade structure, and parties typically use the relevant form as the foundation of their contract, adding specific terms and addenda for price, quantity, loading period, and any variations from the form defaults.
All GAFTA contracts are governed by English law and provide for GAFTA arbitration as the primary mechanism for resolving disputes. English law is chosen because it is commercially predictable, extensively developed for international commodity trade, and the basis on which GAFTA arbitration rules and arbitrators operate. Both parties to a GAFTA contract—regardless of their own nationality or domicile—agree to English law and GAFTA arbitration jurisdiction when they incorporate the form.
The quality and condition provisions in GAFTA voyage contracts default to final at loading, with quality certified by an independent inspection at the loading port. This allocation means the seller's obligation is satisfied when loading port certificates confirm the contracted specification—quality changes during transit are the buyer's risk unless the parties have specifically agreed otherwise. The weight provisions similarly default to loading port draft survey, with a contractual tolerance—typically 0.5 to 1 percent—within which variation is not actionable.
Key Commercial Terms in GAFTA Contracts
Payment provisions in GAFTA contracts typically require payment against shipping documents—original bills of lading, invoice, certificate of quality, certificate of weight, and phytosanitary certificate—within a defined number of days. The exact mechanism (letter of credit, documentary collection, or cash against documents) is specified in the specific contract terms, not in the form defaults. Where payment is by letter of credit, the credit must be opened before shipment in most GAFTA forms, with failure to open a complying credit on time constituting a material breach by the buyer.
The default provisions in GAFTA contracts provide the mechanism by which a seller or buyer can terminate a contract when the other party fails to perform. Under GAFTA 100, if the buyer fails to pay for a shipment, the seller may serve notice of default and sell the goods to a third party. The difference between the contract price and the resale price is the seller's recoverable damages, together with interest and costs. If the market has risen, the buyer's default has caused no loss and the seller recovers only nominal damages; if the market has fallen, the seller recovers the full price difference.
Fumigation certificate requirements are specified in GAFTA forms for certain destinations and commodities. A shipment of grain to many East Asian buyers must include a fumigation certificate confirming phosphine treatment was applied during or after loading, and some GAFTA contracts specify this as a documentary requirement alongside the phytosanitary certificate. Missing a fumigation certificate creates a documentary non-conformance under the contract that can be used by a buyer in a falling market to delay acceptance.
Traders who incorporate GAFTA forms without reading the default provisions are effectively agreeing to risk allocations they may not have consciously chosen. The most common commercial surprises for new GAFTA traders are the loading-port-final quality provision, the tight documentary presentation timeframes, and the scope of the default clause when market prices move against one party.
What GAFTA contracts cover, how the main voyage and forward contract forms allocate risk, and how GAFTA arbitration operates when disputes arise in grain and oilseed trade.
GAFTA—the Grain and Feed Trade Association—is the London-based trade body that publishes standardized contract forms for the international trade of grain, oilseeds, pulses, animal feed, and related agricultural commodities. GAFTA contract forms are widely used in international transactions because they embody decades of commercial practice, carry predictable dispute resolution provisions, and are recognized by courts and arbitration tribunals in major trading jurisdictions. For traders buying or selling grain and oilseeds in international commerce, GAFTA forms are not merely a template but a structured risk allocation framework whose default terms have significant commercial consequences.
The Main GAFTA Contract Forms and What They Cover
GAFTA publishes more than 80 contract forms covering different commodities, delivery bases, and trade routes. The most widely used forms in bulk grain trade are GAFTA 100 (grain in bulk, for shipment), GAFTA 49 (wheat and wheat flour), GAFTA 119 (oilseeds), and GAFTA 78 (contracts of affreightment). Each form specifies default terms for a particular commodity type and trade structure, and parties typically use the relevant form as the foundation of their contract, adding specific terms and addenda for price, quantity, loading period, and any variations from the form defaults.
All GAFTA contracts are governed by English law and provide for GAFTA arbitration as the primary mechanism for resolving disputes. English law is chosen because it is commercially predictable, extensively developed for international commodity trade, and the basis on which GAFTA arbitration rules and arbitrators operate. Both parties to a GAFTA contract—regardless of their own nationality or domicile—agree to English law and GAFTA arbitration jurisdiction when they incorporate the form.
The quality and condition provisions in GAFTA voyage contracts default to final at loading, with quality certified by an independent inspection at the loading port. This allocation means the seller's obligation is satisfied when loading port certificates confirm the contracted specification—quality changes during transit are the buyer's risk unless the parties have specifically agreed otherwise. The weight provisions similarly default to loading port draft survey, with a contractual tolerance—typically 0.5 to 1 percent—within which variation is not actionable.
Key Commercial Terms in GAFTA Contracts
Payment provisions in GAFTA contracts typically require payment against shipping documents—original bills of lading, invoice, certificate of quality, certificate of weight, and phytosanitary certificate—within a defined number of days. The exact mechanism (letter of credit, documentary collection, or cash against documents) is specified in the specific contract terms, not in the form defaults. Where payment is by letter of credit, the credit must be opened before shipment in most GAFTA forms, with failure to open a complying credit on time constituting a material breach by the buyer.
The default provisions in GAFTA contracts provide the mechanism by which a seller or buyer can terminate a contract when the other party fails to perform. Under GAFTA 100, if the buyer fails to pay for a shipment, the seller may serve notice of default and sell the goods to a third party. The difference between the contract price and the resale price is the seller's recoverable damages, together with interest and costs. If the market has risen, the buyer's default has caused no loss and the seller recovers only nominal damages; if the market has fallen, the seller recovers the full price difference.
Fumigation certificate requirements are specified in GAFTA forms for certain destinations and commodities. A shipment of grain to many East Asian buyers must include a fumigation certificate confirming phosphine treatment was applied during or after loading, and some GAFTA contracts specify this as a documentary requirement alongside the phytosanitary certificate. Missing a fumigation certificate creates a documentary non-conformance under the contract that can be used by a buyer in a falling market to delay acceptance.
Traders who incorporate GAFTA forms without reading the default provisions are effectively agreeing to risk allocations they may not have consciously chosen. The most common commercial surprises for new GAFTA traders are the loading-port-final quality provision, the tight documentary presentation timeframes, and the scope of the default clause when market prices move against one party.