Okay Jules, thanks for that context. Now on the other side of any commercial agreement is the mill, the cane factory, ASR BSI. The whole issue boils down to the three year commercial agreement that the BSCFA has refused to sign with them.
The main item of contention is what are called throughput and terminal charges. These were introduced after ASRBSI moved its sugar shipping operations to the Big Creek Port. The charges are new, but represent a saving because they replace more expensive charges form the old Port of Belize - which are stevedoring and related charges.
But, the cane farmers say these charges were not in last year's one year agreement - and they don't want them in the new agreement. Today BSI held a zoom press conference to say the charges were there but bonded that there may be an issue of clarity:
Shawn Chavarria, BSI, Director of Finance
"We had signed back in 2021, the same commercial agreement that we are proposing with the BSCFA, which included the clarification of the terminology for throughput fee and the terminal handling charge."
"Port charges have always been a core part of the commercial agreement and as a shared cost. So that was not something new. What in our view, you know, would have allowed this to go through very easily is because we were able to demonstrate that we were saving significantly by moving the operations to Big Creek."
"And so from our standpoint, farmers have been getting the benefit of the transition to Big Creek. And so these port fees, which are still lower than what we were paying, it's only right that they continue to be shared."
Jules Vasquez
"I just felt my question was a little more specific. So is that included in the open agreement? And was that a feature of last year's one year agreement?"
Shawn Chavarria, BSI, Director of Finance
"From our standpoint, we view it that the previous agreement includes these port charges, which the throughput fee features in it."
"So from our perspective, they are part of it. And we have when we've issued cane price estimates, they are stated explicitly in the cane price estimates that are provided to the association. So from our standpoint, they are part of the cost."
Jules Vasquez
"Is it an open agreement?"
Shawn Chavarria, BSI, Director of Finance
"The open agreement references the previous agreement. In terms of the terminology, it still has the the value deductions that have been agreed. Yes, it's something that we want to incorporate going forward."
"So it's absolutely clear to everyone. And that's what we're currently working on to make sure that it's very explicit for the avoidance of doubt."
Reporter
"Is the sin of BSI/ASR not putting it clearly? I understand what you're saying, you guys were in a hurry, you had to sign a commercial agreement and probably the clause was not clear enough placed in there talking about throughput and terminal handling because those two costs are the point of contention. BSCFA is saying you are telling us we are rolling over the commercial agreement from last year but in that agreement from what we are seeing there is no throughput cost nor terminal handling. So is it that it was just not clear enough in the previous commercial agreement?"
Shawn Chavarria, BSI, Director of Finance
"Perhaps indeed that might be the point of contention that it wasn't very clear in the commercial agreement although we have done all the presentations and shared all the information and certainly in the cane price estimates that we were providing the associations that it was stipulated there."
"That explicitness was something that perhaps in the rush to sign an agreement was not made absolutely clear. But certainly going forward that's what we want to seek to ensure. that is clear to all the parties."
In the conference, ASR/BSI confirmed that a few of the BSCFA's farmers have broken ranks and delivered cane to the mill under the open agreement- but they would not say how many.
