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Home General ASR/BSI responds to concerns about $11.4 mil ocean freight cost

ASR/BSI responds to concerns about $11.4 mil ocean freight cost

BELIZE CITY, Wed. Aug. 15, 2018– There was great disappointment among sugarcane industry stakeholders in the country, especially in the ranks of the farmers, when the figures for the second payment for the crop were revealed. The largest cane farmers association, BSCFA (Belize Sugar Cane Farmers Association), announced that the payments received thus far, for this season, did not cover their costs for producing and delivering cane to the factory at Tower Hill.

The great concern among the farmers, is the increase after American Sugar Refinery/Belize Sugar Industry (ASR/BSI) released its financial report and they saw a whopping $11.4 million assigned to ocean freight costs for transportation of the exported sugarcane — costs the farmers believed were not accurate, considering that, according to the report, the sugar/molasses were sold under the “Free Alongside Ship” (FAS) agreement. Cañero leaders complained because, they said, under the FAS arrangement, the buyers, who in this case are Tate and Lyle, should pay for the freight.

In Tuesday’s Amandala, we reported that PUP representative for Orange Walk South, Hon. José Mai, considered to be the PUP’s shadow Minister of Agriculture, questioned why BSI and the farmers had to share the cost of freight when “FAS” meant that it should have been the buyers’ responsibility. Mai said that maybe ASR had not explained itself well, that perhaps the term “FAS” should be replaced with CIF (Cost Insurance and Freight).

Hon. Mai had also said that if the $11.4 million had not been paid in freight costs, the farmers would have been able to get $51 per ton, as opposed to the $45.47 per ton that they will actually receive.

Yesterday, during an impromptu press conference held in Belize City, Mac Mclachlan, Vice President of International Relations for ASR, said that they have been speaking to the different cane farmer associations and clarifying any issues that these associations may have, including concerning the terminology used in the report, because, he said, “they (the associations) are our partners in this, not political parties.”

When asked if he was also speaking to Hon. Mai, since he is the person who is pushing the issue, Mclachlan said that they have tried more than once to contact him, but he has not been responding to their calls.

In explaining the issue about the freight, Mclachlan said: “There is a cost to ship sugar from Belize to the EU market. It’s an ocean freight cost with other costs associated with that. There is another cost, which is, getting the sugar from the hill mill on-board that ship, and that, as you know, is a bit of a challenge for us in the absence of a decent port close enough with deep enough water to help us with proper loading rates. We have to barge that sugar 122 miles up the New River and down the coast, in order to load ocean vessels; these are both charges to the industry.”

He continued: “So, for many years, decades, we have given statements of the value of that freight and the value of local handling charges to get the sugar on-board the ship to cane farmer associations, and we do that for reasons of transparency, so that everybody can see exactly what the costs are associated to exporting sugar. Not only do we do that, we share all the contracts that we have with the purchase of that sugar with cane farmer associations so that they can see what is clearly defined, what the freight elements are, and for the end of the crop we provide a statement of all of those costs that have has been audited for cane farmers associations.”

Mclachlan said that the sale and purchase agreement that ASR has with the cane farmers associations has no connection with the FAS statements in the report because it does not exist in the agreement with the association. “[FAS] is simply a term that’s trying to describe the value, not the price, of the sugar minus the ocean freight and export cost,” he said.

In his interview with the Amandala on Tuesday, Hon Mai had said that maybe ASR had not “explained itself well.” However, even if the ASR report is accurate, farmers still have great interest in these costs. All costs incurred by the millers and shippers are borne by the industry, and farmers want to make sure that the best is being done to protect their interests.

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