Process

 

sugar5

PROCEDURES

Procedures for Sugar Contracts:
– Buyer issues LOI and BCL
– Seller issues FCO
– Buyer returns FCO signed / stamped
– Seller approves and sends the Draft Contract
– Buyer // Seller sign the Contract
– Buyer opens non-operative BG or SBLC to seller bank
– Seller issues Performance Bond Guarantee 2% and POP to turn operative the financial instrument
– Shipments starts as per contract terms.

Procedures for Sugar Spot:
– Buyer issues ICPO and BCL (ICPO endorsed by bank officer)
– Seller approves ICPO and sends the Draft Contract
– Buyer // Seller sign the Contract
– Buyer opens non-operative SBLC or MT 103 to seller bank
– Seller issues POP to turn operative the financial instrument
– Shipments starts as per contract terms.

How To Get A Soft Quote.
We can provide you with a soft quote if you provide us with the specifics of your intended order for SPOT or CONTRACT and your TARGET.
At a minimum we need to know the quantity of sugar you desire and the intended destination of the sugar.

Is It Possible To See The Sugar Before Committing To A Purchase?
In most cases there won’t actually be any sugar to see, as the sugar will be transported from the refinery to the ship after the order is confirmed. Sugar is generally not stored in warehouses waiting to be purchased, and can therefore not be viewed.

Pre-Shipment Inspection/allowed to witness the SGS Certification of the product at the Port of loading.
SGS is the world’s leading inspection, verification, testing and certification company. SGS is recognized as the global benchmark for quality and integrity.
Port visits are not generally allowed and are not easy to arrange. Entry is secured and controlled by the port authority. Third parties would not be considered. Even if a visit were arranged it would be short and unremarkable due to confidentiality, safety and security considerations.
The contract form contains a provision for the buyer to appoint their own independent inspector (authorized by port authority) at loading, but the SGS report is final for payment.
POP/Proof of Product for allocation of Sugar.
We at Srimungkeaw Agriculture are the authorized sales mandate for allocations of .
Allocation supply is stored at the sugar mills for processing and refined to order at the time of sale.
Therefore physical proof of product is not available until production of a given order has begun.
A change in policy by the involved banks has been implemented concerning bank to bank statements of allocation product.
The banks no longer provide SWIFT messages referencing allocation certificates.
As a result POP (Proof of Product) has been removed as an element of financial procedure.
A 2% performance bond remains in place as the means to activate the non-operative payment instrument.
In the contract procedure, title to sugar equal to the value of the payment instrument is given to the buyer when the instrument is fully operative.
Bonded warehouse receipts are then provided for the sugar during the production and loading operation.
An SGS report is provided for the loaded vessel and forms a part of the documents required for payment.
Sugar is processed in Brazil through the crop of Sugarcane.
The Sugarcane is harvested in a quantity to meet refinery orders.
Harvesting of the sugarcane and storage of it results in a quantifiable loss of product because the sugarcane must be processed within a certain number of days.
Sugar extraction from the cane starts to diminish as the cane dries out.
Therefore sugar is prepared at the Mills only on financially confirmed orders.Warehouse stock is committed to “ROLLING CONTRACTS”
For what is generally referred to as a SPOT deal a Financial Instrument has to be verified before Sugar can be set aside for lift.
This is predicated on the operational realities as stated above.
Approximately 4 years ago Sugar used to be prepared for sale before Financial Instruments were verified by the Sellers banks.
Too many times, failed Financial Instruments through non-acceptance by the Seller’s Banks or Instruments that were “Phantoms” created chaos at the loading Ports. What resulted was a blockage of Ports with ships waiting to load.
As a result Port Authorities set for regulations that no vessel could enter ROTA to load until a Financial Instrument was presented to the Port Authority – which ONLY then could result in consent to berth and load.Hence when a potential new client request POP up front – it is a functional impossibility.
There is no Sugar EX-Mills that is not already committed to. There is NO shelving of product.
Financial Instruments are required in place for loading as promulgated by Port Authority.
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TERMS OF INTERNATIONAL TRADE.
Our procedure is Internationally accepted and Non-negotiable.
Seller issues Soft Quote. Overpricing is not permitted.
Prices may change without any prior notice until such time as contract is executed by the seller.
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PROCEDURES:
Procedures for Sugar Contracts:
– Buyer issues LOI and BCL
– Seller issues FCO
– Buyer returns FCO signed / stamped
– Seller issues the draft contract for review, mediation, signature, seal, date and exchange by e-mail first.
Buyer’s approved copy of the returned draft contract must be accompanied by a draft copy of financial instrument that will be issued.

– Seller and Buyer execute final contract: Seller sends final contract electronically in PDF format. An electronically executed final contract can stand. Contract is lodged with the buyer’s and the seller’s respective banks.
– Within five (5) international banking days, the Buyer’s bank will issue the non-operative BG or SBLC payment instrument acceptable to Seller for the first month’s shipment in favor of the Seller at Seller’s bank.
– Seller issues bank to bank 2% performance bond (PB) drawn on Seller’s bank as guarantee of shipment; the issuance of the PB shall activate the financial instrument and make it fully operative.
*Seller then draws-down payment to the value of one shipment (by MT103 instrument) which allows Mills to confirm order for production to commence.
– During production and loading operations seller provides bonded warehouse receipts.
– Shipment (s) start as per delivery schedule agreed in the contract.

The Seller guarantees on his account that each shipment will be provided with inspection of weight and quantity and quality at the time of loading.
Certificates shall be provided by SGS or similar authority at the Seller’s expense and shall be binding for both parties. Seller instructs such authority to carry out the inspections under strict rules and in accordance with the specifications in the contract and or the International Chamber of Commerce rules (Incoterms 2010 latest edition, with all amendments).
Upon completion of the first shipment, the payment model (as above*) with the agreed financial instrument, as applicable, will be automatically extended for the second shipment and further to be extended until the contract is completed totally for the quantity as specified in the contract.
– A full set of Seller’s Shipping Documents will be issued at the port of loading for each vessel prior to each shipment.
– Seller provides 110% Insurance in favor of the buyer.

Note: The buyer needs to be totally vetted and ready to engage the verbiage text which is a mandatory item in the Draft Contract.
At the presentation of the Draft Contract the buyer already must have credit from their Bank. This means the buyer has a business relation with their bank in the form of the SBLC to give the verbiage text.
Time of process and shipment:
The delivery and for spot and contract is about 30-45 days after the financial instruments are activated. Keeping in mind that we need about two weeks to come to the signed final contract plus 30-45 days before the first shipment.
Import Facilities, Documents, Taxes and Fees:
All taxes or levies imposed by the country of destination are on the buyer’s account. Buyer must have all import permissions, warehousing confirmation and permits in writing and copy/send to the seller.

– PERFORMANCE BOND: 2% monthly value.

– INSPECTION: By a reputable independent surveyor, such as SGS, or equivalent at the port of loading.

– PACKING: 50 kg PP BAGS, with inner linings, per international standards in slings or pallets.

– VALDITY: An ICPO shall be valid for 10 days from the date of issue and may be extended by the Seller in writing for cause and upon request. If no Draft Contract is received within the validity period the ICPO shall be considered withdrawn and no longer valid.

PAYMENT INSTRUMENTS:
Payment instruments accepted for 12 month Contracts:
SBLC, BG, MT-760, T/T, MT 103-23.
All payment instruments must be irrevocable, unconditional, confirmed, unrestricted, non-transferable & non-divisible.

General Policy:
Supplier allows and promotes sales participation by channel partners and intermediaries.
Financial procedure for commodity trade is fixed and non-negotiable.
Past performance documentation or partial proof of product are not given.
Proof of product is only available following seller’s bank confirming and advising the operative payment instrument.
Corporate offers are addressed to the buyer by name (not to an intermediary or broker).
An LOI, ICPO or letter of request is required to issue the corporate offer.
All electronic documents are communicated in protected format.
No product samples are available.

Price and Commission:
Overprice is not generally permitted, and if our supplier agrees to discuss it, a formal letter requesting it, is required from the buyer, and the buyer is made aware that our supplier pays commissions to channel partners and intermediaries. Commissions quoted are total amounts and only one payment entity is named on pay orders.

Fee agreements are issued to one paymaster, and that entity manages any sub agreements for all other beneficiaries.
Supplier does not provide bank endorsed or notarized fee agreements.
Fee agreements are issued upon execution of Final Contract.
Price lists are internal information and price is subject to change without notice.
Corporate offers are required for accurate price quotations.

Draft Contract/Final Contract – Issuing Process:

1. Supplier must have LOI/ICPO and accepted (by signature) FCO to review any Draft Contract request.

2. Supplier will speak to the named buyer prior to issuing a Draft Contract.

3. The Draft Contract will be sent by email directly to the buyer and/or buyer authorized representative only.

4. The Draft Contract will be issue 48-72 hours after supplier has had the required conversation with the buyer and all paperwork is in order.

5. The Draft contract must be returned in PDF format, with Appendix A, B and C fully completed by the buyer.

a) Buyer must complete the “SCHEDULE OF DELIVERIES” or revise the proposed schedule
(contract Appendix A)

b) Buyer must complete customer and banking information (contract page 1 and Appendix B)

c) Buyer must provide copy of, or the complete text of, the bank payment instrument
forreview and acceptance (contract Appendix C)

d) Refer to contract Section 26, which explains the purpose and function of the Draft Contract

e) Buyer must sign the Draft Contract or provide a written acceptance of the contract terms and conditions on their corporate letterhead. Only then can our supplier approve and send the Final Contract which will include full details of the seller.

f) Draft Contract, when issued, expires in 10 days. If an extension is needed the buyer must provide a written request to Supplier.

g) Final Contract is sent by email only to the buyer.

Ph: +64212789275,
Skype contact: sugarexbrazil,
email: sugarsalesmanager@sugarexbrasil.com
Offices in Brazil, Colombia, London, Hong Kong, Thailand.