Role of Trade and Contracts (NOFOTA and FOSFA) - MVO · • Although your trade is done under Fosfa...
Transcript of Role of Trade and Contracts (NOFOTA and FOSFA) - MVO · • Although your trade is done under Fosfa...
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Role of Trade and Contracts (NOFOTA and FOSFA)
MVO Course Food and Feed Safety of Oils & Fats 8 April 2014
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Subjects: • The Trade; typicality's of the oils & fats market
• The Associations; differences and approach
• The Terms, the risks and admin • Arbitration; how does it work and what are the (dis)advantages?
• Interface with Food and Feed Safety
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The market – Globalization
• Geographical spread • Multiple applications • Transportation • Social & Environmental influences
– Transparency • Commodity Exchange (BM, CBOT, Matif) • Reuters, internet • Brokers • Events
– Volatility • Supply & demand • Fundamentals; currency, crude mineral, politics/war,
nature, piracy
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The market
• Who are the players in the market? – Producers – Consumers – Trading houses – Brokers – Superintendents – Laboratories – Storage companies – Shipping and transport companies – Insurance companies
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Other stakeholders • (multi) branche organisations:
– FEDIOL, VERNOF – MVO – NEVEDI
• Multi stakeholder organisations: – RSPO
• Project organisations: – EPOA
• Certification scheme organisations: – GMP+ International – EFISC
• Trade Associations/contract bodies: – UCOGRAS, GROFOR, FOSFA, NOFOTA
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The Trade Associations (Fosfa & Nofota)
• What stands FOSFA and NOFOTA for?
– The Federation of Oils, Seeds and Fats Associations formed in 1971 (predecessor Associations – 1863)
– Netherlands Oils, Fats and Oilseeds Trade Association 100th Anniversary – 2018
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The Associations
NOFOTA Council
Industry
Brokers
Shippers
Meat trade
FOSFA Council
Peanut trade
Contracts Committee
Technical Committee
Arbitrators Committee
FOSFA O&F Section
UCOGRAS/ GROFOR
FOSFA Technical Ctee
FOSFA Contracts Ctee
Tank Storage
Super intendents
Laboratories
Secretary & Treasurer
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What is the approach of the Associations (Fosfa & Nofota) • Policy, but not lead the trade
• Promote practical solutions for fair trade by;
– Create standard terms & conditions in a simple contract form
– Inform members via website and circular letters – Provide arbitration service – Organize educational events (seminars) – Organize annual dinner events/Contact days
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FOSFA contract
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NOFOTA contract
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The Terms, the risks and administration
Special attention: • Do not alter the terms of a standard-form contract,
until after careful consideration of all (potential) consequences.
• If a CIF standard-form contract is used as the basis for a C&F sale, special provisions as to insurance are necessary.
• Do not (ab)use a standard-form contract for purposes for which it is not intended.
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The Terms, the risks and administration
• Strings, Circles and Washouts
Normal string of contracts
A B C E F G H I D OIL
Wash out A B A
Circle A B D C E F G H A
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The Terms, the risks and administration
Payment
• Together with delivery of the goods, payment forms the core of any commodity contract.
• FOSFA: CAD (Cash Against Documents)
• NOFOTA: provides possibility to pay in advance
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Arbitrations
• Although your trade is done under Fosfa or Nofota, always refer specifically to the rules of arbitration
• Do not step into other legal procedures • Monitor and secure time bars – follow the Rules for Arbitration • If required call in legal assistance • NOFOTA: arbitration committee appoints 3 arbitrators • FOSFA: both parties appoint an arbitrator and the association
appoints 1 referee (if necessary) • Why arbitration?: quick, cheap and fair (combination of legal
and experienced business people)
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Arbitrations
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Interface with Food and Feed Safety
• Clauses specifically refer to quality and quality complaints • Reference is made to EU Directives concerning hygiene of
foodstuffs and acceptable previous cargo lists • NOFOTA and FOSFA standard method of analyses • Technical Committee • Criteria for recognized superintendents, laboratories and
storage companies (audit programme) • Heating instructions • Quality specifications
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Thank you for your attention.