For a week now, we've been reporting on the fallout in the sugar industry after the very low second payment for the sugar crop came in.
And many are looking to ASR/BSI - because they suspect the multinational isn't being completely on the level in how it calculates the payment for sugar.
And, doubters have seized upon a shipping term - which they feel shows that ASR/BSI is shorting them. The term is FAS - it means "Free Alongside Ship"- and according to internet sources, that means the buyer is responsible for paying the ocean freight. The buyer in this case would be Tate and Lyle in the UK.
But, in their breakdown of costs that ASR/BSI sent to farmers, it says that for the 95,000 tonnes of raw sugar sold to Tate and Lyle, it has an average "FAS" price of 526 dollars per tonne.
But then, the price breakdown shows 11 million dollars charged for ocean freight. That's a huge red flag for some farmers- because right there in the report it says that it's an FAS price per tonne, which they take to mean, the buyer, Tate and Lyle should be paying the ocean freight.
It seems technical - but 11 million dollars is nothing to laugh at. Today, a senior representative in the ASR/BSI finance said it is all a misunderstanding. They say the raw sugar is sold under what is known as a CIF contract - meaning ASR/BSI has to pay Ocean freight. So why use the term "FAS"- which means just the opposite? The company rep said, quote, "it's a term we use too loosely - it's been there forever and ever - it hasn't been changed - we have to change it to better describe everything." End quote. He says the company simply uses the term to describe the build-up of all the costs that they have to pay out, from stevedoring, to freight.
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