In the wake of the an extremely low second payment for the 2017-2018 sugar cane crop to cane farmers, the Belize Sugar Cane Farmers Association claims that they are paying an additional 11.5 million dollars for Ocean Freight which they have not agreed to pay. In late July, ASR informed cane farmers that the average second payment would be $5.36 per ton. This morning, PUP shadow minister of agriculture, Jose Mai, was on Plus TV’s Rise And Shine Show where he explained that according to the Agreement made between the Belize Sugar Cane Farmers Association and ASR/ BSI, sugar sold to several international markets would be sold as Free Along Side (F.A.S). However, the ASR/ BSI has been selling the produce under Cost, Insurance and Freight (C.I.F.) If these terms sound a bit foreign , that is because they are international shipping agreements used in the transportation of goods between a buyer and a seller, established by the International Chamber of Commerce. Under the F.A.S Agreement, the produce is delivered to the docking port, and once it gets there, the BUYER covers the cost of shipment and insurance. Under the C.I.F agreement, the SELLER covers the cost of insurance and freight. According to Mai, ASR/ BSI’s accounting reveals that they charged cane farmers an additional 11.5 million dollars for shipping insurance and ocean freight, which is he says was not agreed upon by cane farmers.
Jose Mai, PUP Shadow Minister of Agriculture: If you look at number one, 95,000 tons of sugar will be sold to the EU at a certain price. It is $526 per ton FAS price. You can sell products containerized or non-containerized under several conditions. You can use the FAS, FOB or CIF. These are clear and international maritime terms with specific meanings. You cannot confuse these terms, imagnie China sending over cars in a vessel and they tld the Americans that they are selling it CIF but really it’s FOB, you are talking about millions. The reason why these terms are important is to protect or avoid controversy. Number one there is very specific, FAS price, the second one is local market, then number 3 is direct consumption, which is FAS of $1000, that goes to the US market. Number 4 has the same $971 FAS which goes to the US market. Number 3 went to the dataline market. Everything there is FAS, there is nothing that is FOB or CIF.
According to Mai, concerns were raised when expert advice suggested that cane farmers should not be paying ocean freight under their current agreement
Jose Mai, PUP Shadow Minister of Agriculture:: Ms. Olivia on the news explaining what she means by FAS. And she said FAS is only the value of the sugar at the port, at the Belize port, but that is not accurate. Why what he says, it is the value of sugar at the port and from the port to London or wherever is CIF. So you divide the voyage into two, that’s what they are saying. And from the mill to the port is FAS, but from the port to London is CIF. Now they claim that they are hiding nothing and I want to believe that, but why would you then include FAS here with the CIF. What can happen and what is happening is that we sell to certain customers at CIF and we sell to certain customers at FOB. Well then if you want to be transparent, you need to state that go to the EU is FOB, the sugar sold to the dairy consumption might be CIF. But you cannot do one thing and say another thing. Why I suspect they this is for the world to see that they buy sugar from Belize CIF. Why would you want to choose to pay your freight, when the contract is telling you that you don’t have to pay your freight?
Mai says that ASR/ BSI’s explanation of the F.A.S terms of agreement is not accurate. He added that the sellers and buyers agreement must clearly state which region is being sold under C.I.F or F.A.S.
Jose Mai, PUP Shadow Minister of Agriculture:: What made us kick is that we met some very important people and they aked that if we are selling FAS, why are they charging us ocean freight? FAS means Free Alongside Ship and is used a lot when cargo is transported. It means that the seller fulfills his obligation to deliver when the goods has been placed alongside the vessel on the quay at the named port of shipment (in this case it is Belize). The FAS term requires the buyer to clear the goods for export.
Mai says that ASR/BSI owes the Belize Sugar Cane Farmers eleven point five million dollars which must be repaid.