Raw Material Cost

Raw Material Cost refers to the procurement expenditure on original materials directly used in product manufacturing when a company produces or purchases export goods, including main materials, auxiliary materials, and purchased semi-finished products. In foreign trade quotations, it is a core component of total cost and directly affects the calculation of price terms such as FOB and CIF. Usage scenarios include: cost accounting, quotation preparation, procurement negotiations, profit analysis, and reconciliation with suppliers. Notes: It is necessary to distinguish raw material cost from processing fees, labor costs, administrative expenses, and logistics costs; exchange rate fluctuations, changes in international commodity prices, tariffs, and value-added tax may affect the actual cost; under different trade terms, the party bearing the raw material cost may differ. Compared with 'total cost,' raw material cost refers only to the material portion; compared with 'procurement cost,' the latter may include additional expenses such as transportation and insurance. Foreign trade practitioners should accurately allocate raw material costs, avoid omissions or double counting, and regularly update cost data to respond to market changes.