P R O M O T I N G I N T E R N A T I O N A L T R A D EIssue 218 / February 2016

In his speech at the AGM, Rolf thanked his predecessor, Zlatina Doneva,warmly for her contribution to Gafta over the last year. It was a busy year forher and she excelled in her role representing the interests of members. Rolf alsohonoured retiring Council member, Roberto Rocco, who has contributedsignificantly to Gafta over the years. Roberto was President of Gafta from

October 2009 to January 2011 and brought a wealth of experience to deal withsome of the challenges that have faced Gafta. Looking forward to the yearahead, Rolf commented; “The challenging operating environment that thegrain and feed trade finds itself in makes a productive framework fordiscourse among participants all the more vital. Gafta leads the world inthis respect.”

Gert Jan van Noortwijk - Deputy PresidentGert Jan van Noortwijk, of Agribrokers International, Netherlands, was elected as the new Gafta Deputy President on 21stJanuary. Gert Jan has many years of experience trading grains. He set up his own grain broking business in 1992, covering alarge part of the European market and introducing a concept where clients were better informed than usual about marketelements, not limited to daily prices only. This concept is still one of the main tools used by the current company, AgribrokersInternational, a leading brokerage firm in the European, Black Sea and Mediterranean markets.

“After enjoying my time at the Gafta Council for some years and being elected as Deputy President, I am looking forward tothe years to come,” Gert told Gaftaworld. “Both for Gafta and my professional life I realise more and more the important rolethat the association can and will play in the future trading of grains and feedstuffs. In the past years trade has become moreand more global and the connection between different parts of the world is a key factor of its success. Gafta sows itsresponsibility by expanding its role to South America and Asia in order to assist trading, on the basis of worldwide standardcontracts. It will serve their new members in these areas with education programmes and knowledge about sustainability andmutually recognised food and feed safety standards. To me, three pillars of Gafta, which are contracts, arbitration andeducation, are essential points of interest for a successful continuation of the growth of our Association.”

Members have the opportunity of meeting Rolf Peters at the evening reception to be held in Minneapolis on 25th February during the Gafta course“Shipping the Goods”, to be held there on 25th and 26th February 2016. See pages 10 and 11 for more details.

Jean-Christian Fages – Vice PresidentJean-Christian Fages of Louis Dreyfus was elected Vice President at the AGM. Jean-Christian started as a ship agent in Paris,then moved on to work for a Norwegian ship owner in London, Bergen, Jakarta, Rotterdam, Seattle and New York. Hejoined the Louis Dreyfus group in Paris, first in chartering and then in trading in the ethanol division. In 2001 he became theHead of Operations for grains and oilseeds, then moved to Geneva to head the operations for all the commodities traded inthe region.

“I would say that I have always been interested by the international trade, first in the logistical aspects, then in the tradingand operations, and I found in Gafta a good synthesis of what a trade association should be,” said Jean-Christian. “Gafta’swork on contractual relationships through its well used and often updated contracts is vital; it also provides excellenttraining and last but not least helps trade to cope with disputes through its Arbitration department. I am honoured to becomeVice President of Gafta and will do my best to use what I have learned so far in my various professional experiences to helpGafta and its members in what is an attractive but ever more challenging trade."

Rolf Peters becomesPresident of Gafta

afta members and the Council welcomed the newly electedPresident, Rolf Peters, at the Association’s Annual GeneralMeeting (AGM) held on 21st January 2016. Rolf began his

career at The Pillsbury Company as a commodity trader in 1986.In 1988 he set up his own trading company, which, through aseries of acquisitions, has evolved into the agri-business holdingcompany AgMotion, based in Minneapolis, USA. USCommodities LLC is the primary physical commodity trading unitof AgMotion.

Left to right: Rolf Peters, Zlatina Doneva and Roberto Rocco at the AGM

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GAFTA 49: High Court ruleson FOB buyers’ right ofnomination and substitutionBy Ivanna Dorichenko, Consultant, Clyde & Co LLP

The facts and arbitration historyThe dispute concerned a sale of 25,000mt ofmaize FOB Ukraine for delivery in March 2013.Among other terms, the contract required theBuyers to serve a 10 day pre-advice of the vessel'sname and ETA, and incorporated Gafta 49, whichincluded clause 6 “Period of delivery” and itsunmodified paragraphs on vessel’s nomination andsubstitution.

On 20 March 2013, the Buyers nominated M/V"PUFFIN" with an ETA at Nikolayev of 26/27March. On 26 March, the Buyers purported tomake a substitution and nominated M/V "SEAWAY" with an ETA of 28 March. Later that day, theSellers rejected both nominations as false, and heldthe Buyers in repudiatory breach of contract. TheBuyers disagreed, bought a substitute cargo, andclaimed circa USD 800,000 as the market pricedifference.

In arbitration, the Sellers argued that the Buyers’nomination was invalid so the Sellers were entitledto terminate the contract. The first tier GaftaTribunal agreed with the Sellers; the Appeal Boarddisagreed and allowed the Buyers’ appeal. TheSellers lodged an appeal to the High Court askingthe court to clarify whether an FOB Buyer,substituting a vessel under Clause 6 of Gafta 49,had to comply with contractual nomination andpre-advice provisions, and, if so, whether, on a trueconstruction of the Contract and the Board’sfactual findings, the Buyers’ claim was invalid.

The judgmentThe parties’ court debate was largely centred uponthe case of Cargill UK Ltd v Continental UK Ltd,3where in similar circumstances, the substitutionwas considered invalid due to its failure to meet aneight day pre-advice within the shipment period.The Sellers duly relied on Cargill while the Buyerssought to distinguish the case on the basis that therelevant clause in Cargill specifically provided forthe consequences of non-compliance with itsnomination provisions, and did not contain anexpress right of substitution.

The Buyers further contended that Clause 6 ofGafta 49 was a complete code, defining andlimiting their right to substitution, with the onlyrestriction being that the delivery period should notbe affected by the substituted nomination: that wasthe contractually agreed protection for disruptionof the Sellers’ arrangements by late substitution,and no further protection (i.e., compliance withpre-advice requirements) was necessary.

Mr Justice Andrew Smith disagreed with the Buyersand answered both questions in the Sellers’ favour.In his view, on the natural interpretation of thenomination provision in Clause 6, it referred to thevessel that was to load the cargo: the only vesselwhose name and "probable readiness date" couldpossibly matter. While the Sellers were to have thegoods ready “at any time within the contractperiod of delivery" that did not mean that theSellers would not be interested in receivinginformation about the time when the vessel,intended to carry the cargo, would probably beready.

Similar considerations applied to the pre-adviceprovisions in the confirmation of contract.4 TheBoard decided that the identity of the nominatedvessel did not much matter to the Sellers; however,the judge endorsed the Cargill approach andemphasised that, where contracting parties hadstipulated the information to be provided, whatmattered was the parties’ agreement, not the viewsof arbitrators, even those as experienced as here.

Mr Justice Smith further disagreed with the Board’sconclusion that it would be "bizarre" for the right tosubstitute to be subject to the same requirement for10 days' pre-advice as the original nomination: inthe judge’s opinion, it would be more bizarre tointerpret the contract as requiring the Buyers togive detailed pre-advice information for a vesselthat was never used. It was also the judge’s viewthat his preferred interpretation left a sensiblecommercial purpose for the substitution provisionsby making express the implied right to substitute,but qualifying it to give the sellers a remedy in casethey relied on a nomination later changed by thebuyers.

CONTRACTS & ARBITRATION2

Following the recent judicial examination of the Gafta Default clause in Bungev Nidera,1 in the case of Ramburs v Agrifert 2 the courts revisited Gafta contractsto give fresh guidance on the rules for nomination and substitution of vesselsby FOB buyers.

1 [2015] UKSC 432 [2015] EWHC 35483 [1989] 1 Lloyd's Rep 1934 for example, the sellers might want the dimensions and draftof the vessel to arrange a safe berth

The views and opinions expressed inGaftaworld are those of the individualauthors and do not necessarily reflect theofficial policy or position of Gafta

C O N T E N T S3. Challenging outlook for US agriculture

4. The end of export subsidies

4. International agreement to end tax evasion includes commodity transactions

5. UN discussions on dust explosion hazards

6. Brazil soy crop continues to expand

7. A summary of the Australian crop

8. Special feature: Argentina

10. Education and Training

10. Diary dates

11. Gafta courses

12. GTAS new members

12. Job opportunities at Gafta

13. COCERAL - representation in Brussels

14. News in brief

15. New members

16. Events

Ivanna Dorichenko

3

A slowing global economy and record world grainsupplies paint a challenging outlook for US agricultureBy Mark Schultz, Chief Market Analyst and Jason Ward, Director of Grains and Energy, NorthstarCommodity, Minneapolis, USA

Mark Schultz Jason Ward

As we enter 2016, the world is awash in grain with record ending stocks ofwheat, corn and soybeans. This has driven grain prices lower. Lower grainprices generally brings forecasts for stronger global grain demand, but as webegin 2016 we are seeing estimates for global growth being reduced. Mostimportantly the slowdown is being led by China, the world’s largest grainimporter. Recent figures released from Beijing showed China’s economy inthe fourth quarter of 2015 grew at 6.8%, the slowest pace in 25 years. Thisnews sent Asian and US financial markets lower and brings into questionstronger demand forecasts for 2016 in the meat, energy and grain sectors.

Currencies are also playing a big role in determining where the demand foragricultural products originates. Brazil has seen its currency (the Real)plunge 33% in 2015 as its economy struggles with falling oil prices and acorruption scandal at Petrobras. These factors have led to the worstrecession in Brazil since 1930, but from the grain market perspective, theirproducts are going to be cheaper than US equivalent in 2016.

"the American farmer is looking at his secondconsecutive year of prices at or below break-even"

Argentina has a new political regime (President Macri) and monumentalchanges have already occurred. Currency controls were lifted at the start ofthe new administration on December 16th, and a 26% decline in theArgentine peso was the result. The Macri administration also eliminatedfarm export taxes on corn and wheat and has indicted it plans to reduce thesoybean export tax by 5% per year. Going forward, these changes shouldencourage the Argentine farmer to ramp up wheat and corn acreage for2017 and thus become a bigger player in the export arena, especially forcorn. A rising greenback and subsequent devaluation of currencies fromthree major exporting countries Brazil, Argentina and Ukraine, hasincentivised their farmers to increase production, and capture a greatershare of the world grain trade. The graph shows these three countries havesecured an annual average increase of 1.1 billion bushels (around 30Mtonnes) of corn into the world market over the past four years. This increasecomes at the expense of the American farmer. Northstar Commodity firmlybelieves this chart clearly illustrates the obstacles the American farmer is upagainst. Absent production problems in the 2016 US growing season, theglobal grain stocks will rise even further.

Finally, the American farmer is looking at his second consecutive year ofprices at or below break-even costs, even in states where record yields wereestablished. A strong US Dollar and falling energy prices have broughtgrain prices to a level where selling their record crop is still below their costof production. 2015 saw record corn based ethanol production, whichconsumed 5.2 billion bushels of corn (around 132M tonnes), but exportdemand is currently running 25% behind the previous year. Many USproducers are scrambling to reduce expenses, cut fertiliser applications,attempt to lower rental agreements, and anything else they can do to bringexpenses more in line with revenue forecasts. Northstar Commodity hasseen land get leveraged out 15-20 years where previously the agriculturalboom had dramatically reduced the US farmer’s dependence on bankingneeds. There will be consolidation in the agriculture sector, land values willdecline, and US producers will be forced to make tough decisions.

If the currency situation does not change, then some type of crop problemmust develop to lower global grain production in 2016. The consensus toturn friendly to US grain prices, Northstar believes it will take a reduction of20 to 30 million metric tonnes off the world wheat crop, an early end to thewet season in central and northern Brazil and a US corn yield of 164 bushelsper acre (10.3 tonnes per hectare) or lower to prop grain prices back tobreak-even levels for the American farmer. The world weather is still underthe influence of a strong El Niño, so the threat of a crop problem still exists.

2015 was a big production year for ag producers,with record soybean crops recorded in Brazil andin the US, the top two producing countries. Theglobal wheat crop has been a record in the pasttwo years. The corn crop globally was a record thepast two years as well, and the US corn crop wasthe 3rd largest crop in history, alongside recordcorn crops in Brazil and China in 2015.

TRADE NEWS

AgMotion is a physical commodity trading and risk management company headquartered in Minneapolis, MN with locations also in California,Kansas, Canada, Mexico and Singapore. Its Northstar Commodity subsidiary serves the risk management consulting and hedging needs of growers andelevators in the Midwestern US.

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4 INTERNATIONAL NEWS

The Ministerial Decision was agreed at the endof the WTO’s 10th Ministerial Conference heldin Nairobi, Kenya, from 15th to 19th December2015. The Decision formed part of the “NairobiPackage” which comprised six MinisterialDecisions covering agriculture, cotton and issuesrelating to developing countries. The Decisionon export subsidies also lays down rules on theuse of export credits, credit guarantees andinsurance programmes as well as the activities ofstate trading enterprises, all of which can have asimilarly distorting effect on trade as directexport subsidies. The provision of food aid isalso covered, with the aim of ensuring it isprovided only when needed, is not linked tocommercial exports or market developmentobjectives of donor countries and does not affectdomestic production in a recipient country.

Ministerial Decisions onPublic Stockholding andSpecial Safeguard MechanismOther Ministerial Decisions relating toagricultural trade covered public stockholdingfor food security purposes and a specialsafeguard mechanism for developing countries.On public stockholding, Ministers reaffirmed thepeace clause, under which WTO members haveagreed not to challenge another country’sstockholding policy for staple crops until apermanent solution is found. They also agreedon new concerted efforts to find such apermanent solution, though no deadline (aswanted by India) was set.

With regard to the special safeguard mechanism,Ministers agreed to pursue the setting up ofsafeguards for developing countries, designed toprotect farmers from sudden surges in imports ora reduction in prices. Members will continue to

negotiate the mechanism in dedicated sessionsof the Agriculture Committee.

Progress towards ratificationof TFA but future of DohaRound is uncertainFurther pledges were made by WTO members toratify and implement the Trade FacilitationAgreement (TFA) (see Gaftaworld, December2015) but the Agreement needs 110 countries toratify it before it enters into force. So far, 68 (by20th January) countries have confirmed theirratifications of the TFA. The WTO accessionprocess for Afghanistan and Liberia was alsoformally completed in December. There is now,however, some uncertainty about the future ofthe Doha Development Agenda (DDA),launched in 2001, which includes thediscussions on market access, domestic supportand export competition for agricultural products.While some (mostly developing) countriesreaffirmed the DDA, others called for a newapproach to the multilateral system in line withthe new issues being discussed in recentregional trade agreements such as e-commerce,labour, competition and environment (asdiscussed in the last issue of Gaftaworld).

A “strong commitment” was expressed by allmember countries to advance the issues underthe DDA, including agriculture, but the wayahead for the multilateral process of tradenegotiations is currently unclear. This comes at atime when international trade is widelyrecognised as vital for economic growth andrecovery around the world, and in particular (asemphasised by the UN SustainableDevelopment Goals) for promoting sustainabledevelopment, boosting growth and alleviatinghunger and poverty in developing countries.

The endorsement by Finance Ministers in October last year of theOECD/G20 Base Erosion and Profit Shifting (BEPS) Project means thatgovernments worldwide will cooperate, through an action plan, to putan end to international tax avoidance by multinational enterprises.Revenue losses from BEPS have been estimated at USD 100-240 billionannually or between 4 and 10% of global corporation income taxrevenues. Three of the 15 actions within the Action Plan relate to transferpricing rules for transactions between enterprises that are related under amultinational holding. New guidance has been issued specifically forcommodity transactions, relating to the application, for tax purposes, ofthe comparable uncontrolled price (CUP) method to commodity

transactions as well as the determination of the pricing date for suchtransactions. The new rules will enter into force at different stagesdepending on provisions and will be carried out at domestic level andvia treaty provisions. Negotiations for a multilateral instrument formonitoring international tax rules are expected to be finalised this year.For more information go to:

http://www.oecd.org/tax/g20-finance-ministers-endorse-reforms-to-the-international-tax-system-for-curbing-avoidance-by-multinational-enterprises.htm

WTO agrees to end export subsidies

OECD/G20 bring commodity transactions into overhaul of international tax rules

In a decision described by the WTO Director General as “truly historic” the 162 member countries of the World Trade Organisation(WTO) agreed to end export subsidies for agricultural goods. This takes immediate effect in developed countries (with a few exceptionsuntil end-2020 for processed products, dairy products and pig meat), while developing countries have until the end of 2018 toeliminate their export subsidy programmes (again, with exceptions for previously notified subsidies until end-2022). For developingcountries, the provision allowing subsidies for marketing, processing and transport costs (Article 9.4 of the Agreement on Agriculture)will remain in place until the end of 2023, while for Least Developed Countries and net food-importing developing countries thisprovision will apply until the end of 2030. A report published by the WTO in July last year showed a significant reduction in the use ofexport subsidies by member countries, the main commodities affected now being pig meat, skimmed milk, cheese and eggs.

Kenya's President, Uhuru Kenyatta, opened theMinisterial Conference on 15th December

WTO Director General, Roberto Azevêdo and Chairof the Conference, Amina Mohamed, hold theMinisterial Declaration at the end of the Conference

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There was a positive outcome in December at themeeting of the UN Sub-Committee of Experts onthe Globally Harmonised System of Classificationand Labelling of Chemicals with regard to theclassification of grains as a ‘hazardous material’.Following an extensive lobbying effort byArgentina, Brazil, EU and Russia together withGafta and the International Bulk TerminalsAssociation (IBTA), governments are nowexploring a more sensible approach to classifyingcommodities as a hazardous material in the formof a non-binding Annex Guidance.

As we have reported over the last two years,the US and Canadian delegations were thedriving force behind the proposal to have aseparate chapter to include all commodities.The US supported a specific chapter orclassification for agricultural products in theglobally harmonised system (GHS) ofclassifying and labelling chemicals but foundlittle support from other members followingcontinuous lobbying. This would mean thatgrain and its co-products would be consideredas hazardous chemicals and grain elevators aschemical plants, despite the fact that other UN

agencies such as the IMO do not classify grainas a hazardous product. Gafta submitted itsposition paper opposing this approach.

Prior to the meeting in Geneva, Gafta and IBTAmet with governments from Argentina,Australia, Germany, Netherlands, Russia andthe UK to express concerns with the directionof discussions in the Combustible DustCorrespondence Group (CG). Each delegationadditionally expressed concerns with theclassification issue and expressed a preferencefor a non-binding annex to the next edition ofthe GHS that would focus more on aprocessing and risk management approach. Thetrade delegation welcomed this approach.

Much to everyone's surprise, the US changedtheir tack and the Chair asked if members ofthe group would prefer a specific chapter in theGHS or non-binding guidance. There waswidespread support for a guidance approachand the development of a non-binding annex tothe GHS rather than a specific chapterclassifying commodities as hazardousmaterials. While this is good news for the trade,

it will clearly be important to see the detail ofthe final agreement which is expected at theend of 2016. An outline will be prepared by asmaller technical working group by mid-February to address definitions and conditionsnecessary for a dust explosion hazard. Gaftawill remain active in UN discussions and keepmembers and governments informed.

UN discussions on dust explosion hazardsfor the agricultural commodity sector

Representatives at the UN discussions (l to r): JessMcCleur (NGFA), Dieter Heitkamp (CEFIC), IanAdams (IBTA), Jerry Cotter (NAEGA) and AlejoMonner Sans (Argentine Mission to UN)

ADVERTISEMENT

In 2016, Brazil will harvest about 100 million tonnes of soybeans – astriking figure that comes from impressive annual growth rates and the strictobservance of socio-environmental sustainability concepts inherent in thesuccessful Soy Moratorium and Soya Plus programmes.

Sixteen of Brazil’s 27 states already produce soybeans. Of total production,55 million tonnes are sold directly to external markets, mainly Asian andEuropean. Domestic processing will also set a record this year: 40.7 milliontonnes, including 30.9Mt of meal and 8.05Mt tons of oil. Of these totals,15.4Mt of meal and 1.4Mt of oil will be exported, showing the exportingsuccess of the Brazilian soy complex.

These encouraging numbers position Brazil as a strong candidate to becomethe world’s largest producer and exporter of soy, overtaking the USA in a shorttime. Despite the doubts related to Chinese growth, ABIOVE is optimisticabout the big global growth potential of animal protein and vegetable oilconsumption. This potential has already been seen in the soybean andsoymeal imports by China, Southeast Asia and the Middle East. Thesedestinations are acquiring growing volumes of food for their populationsthat are becoming more urbanised and are growing in number and income.

“The second corn crop is also an important part..in logistics and market expansions….”

Proof of this is the significant growth in sales, as shown in the recordedvolumes from 2011 to 2015. In the case of soybeans, the Chinese marketincreased its purchases of Brazilian beans from 22.1Mt to 40.9Mt, andSoutheast Asia has grown from 3.6Mt to 4.8Mt. As regards soy meal,Southeast Asia went from 2.9Mt to 5.2Mt, while the Middle East increasedits purchases from 488,000 tonnes to 855,000 tonnes over the same period.

Brazil, with its available natural resources and technologies, is able to supplysufficient volume to meet the needs of these markets and contribute to theeconomic and social growth of these regions. The second corn crop is also animportant part of all these developments in logistics and market expansions.

“The highlight for soy oil wasthe export of 1.7Mt..”

It is this economic complementarity that makes the perspectives of Brazil’ssoy complex so favourable. The belief in this union of interests has led to alot of effort being applied to the development of export corridors thatprovide savings in costs and time. Among these export corridors, thedistribution highways from Mato Grosso state to the river ports in Rondôniaand Pará states merit a mention. From these ports, production goes bybarge for processing in Amazonas state or for trans-shipment to ocean-goingships in Pará state. The expansion of the Panama Canal comes at anopportune moment in keeping with these objectives as it will permit the useof capesize ships.

The highlight for soy oil was the export of 1.7Mt in 2015, a volume abovemarket expectations. The success of these exportations showed the ability ofthe soy processing industry to meet both internal and external markets forfood and energy with quality products at competitive prices.

Biodiesel, in particular, is a market that is growing fast and demands largervolumes of soy oil, the raw material for biodiesel that represents, dependingon the year, between 75% and 80% of the oils and fats used in biofuelproduction. In 2011, when the obligatory mixture in mineral diesel was 5%,about 1.7Mt of soy oil was destined for this purpose. In 2015, due to theincrease in diesel consumption and the rise in the obligatory mixture to 7%,this volume increased to 2.8Mt. New opportunities will arise with thepossibility of voluntary use in buses, trucks and tractors, as well as theperspective of an annual one percent increase in the obligatory mixturestarting in 2017, up to a maximum of 10%.

In summary, this is a favourable outlook and a promising scenario for asector that offers and will bring even more benefits to Brazil and to theworld.

An excellent and prosperous 2016 to all!

6 MARKET NEWS

Brazilian Soy:On course for 100 million tonnes

In times of economic instability, the Brazilian soy complex once again shows its strength and itspositive contribution to Brazil’s economy. Except for 2012 when climatic problems impactedproductivity, Brazil has had record crops of this oilseed since 2009, and each year new towns benefitdirectly and indirectly from the economy generated from its production, processing and trading.

By Carlo Lovatelli, President, ABIOVE (Brazilian Vegetable Oil Industry Association)

Soybeans being shipped out of the port of Santos in Brazil

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The biodiesel market isexpanding rapidly in Brazil

Lower production was recorded in Victoria andSouth Australia as a result of a very hot springwilting crops during flowering. New South Walesand Queensland production was higher withboth States generating export surpluses. WesternAustralia also produced a better than averagecrop estimated to be close to 14.5M tonnes.

Overall, reasonable rainfall and an early start tothe season ensured that production acrossAustralia was approximately 39M tonnes.According to The Australian Bureau ofAgricultural and Resource Economics andSciences (ABARES), the winter crop was forecastto be up approximately 2% to 39.1M tonnesfrom 2014.

Trade sources estimate that the 2015/16 wheatcrop is in the range of 23.5-24.5M tonnes,followed by 8.3-8.5M tonnes of barley and 2.8-2.9M tonnes of canola. However, whilst thetrade is close on production, exports aresomewhat different, with sources predictingwheat exports to be anywhere between 15 and18M tonnes. The wide difference is reflected indemand which has been slower this season, bothfrom traditional customers in Asia and theMiddle East. Additionally, lower freight rateshave encouraged competition in Australia’straditional markets with end users looking atalternative origins including Black Sea, Franceand Argentina to fill their requirements.

Australian farmers have also not been aggressivesellers this harvest with reports suggesting at theend of December, growers in the major exportstates were only 50% sold. This is unusual withthe majority of Australian growers usually sellingforward throughout the season and liquidating alarger portion of their remaining production atthe end of harvest, generally being 80-90% soldby December.

“..lower freight rates haveencouraged competition

in Australia’s traditional markets”

Barley production this season is estimated to bein the vicinity of 8.5M tonnes with themalting/feed split being the lowest that theindustry can recall. Industry sources suggest thatbarley meeting malt standards was below 15% ofthe total crop, a number traditionally 30% andabove. As a result, the malt market has remainedrelatively firm despite the feed market falling assupplies increase ex Australia combined withgood stocks from Europe and Argentina. Barleyexports are anticipated to be in the range of 5.2-5.5M tonnes with a large proportion headed tothe Middle East.

For the first time in a number of years, canolaproduction is estimated to be below 3.0M tonnes.According to ABARES, this is a 14% decline from2014 and is reflected by the drop in hectaresplanted. Despite an indifferent production yearfor Australian canola, growers oil contentscontinued to surprise with reports from WesternAustralia of oil contents above 50%. The exportmarket continued to be dominated by demandfrom European crushers which was reflected inthe spread between GM and non GM.

Whilst international grain markets have been in adownward spiral, the weakness in the Australiandollar has buffeted local Australian dollarreturns. The Australian dollar has depreciatedagainst the United States Dollar 16.85% sinceMay 2015 and 6% since 1 January 2016.

New system for port accessThe CBH Group introduced Long TermAgreements (LTA’s) for port slot access after anumber of years of an annual auction basedsystem open to all exporters. The LTA’s wereintroduced after receiving approval from theAustralian Competition and ConsumersCommission (ACCC), the Australian competitionregulator. In Australia, storage and handlingproviders are required to provide an openwarehouse system allowing all accumulators andexporters to utilise the storage, handling and portnetworks of the major market players.

Up until 2015, the main avenue to access portslots was to participate in the annual slotauctions in the major export states of South andWestern Australia. These auctions providedexporters with the opportunity to purchase slotsat a market price, dictated by demand andsupply. Rebate systems are applied in each statefor slots executed by exporters; however the riskis still substantial.

The LTA’s introduced for the 2015 season inWestern Australia provided exporters with theability to secure port slot access on a long termbasis without the significant financial risk. TheLTA’s were well subscribed and this providedstability to the market. It is anticipated that asimilar system will be introduced in SouthAustralia by Viterra for the 2016/17 season.

The CBH Group is Australia's largest co-operative and a leader in the Australian grain industry, with operations extending along the value chain from grain storage, handling,transport, marketing and processing. Owned and controlled by around 4,200 Western Australian grain growers, our core purpose is to create and return value to growers. Sincebeing established in Western Australia in 1933, we have continuously evolved, innovated and grown. Our storage and handling system currently receives and exports around90 per cent of the Western Australian grain harvest and is regarded as one of the best in the world. We own a state-of-the-art rail fleet dedicated to the most efficient transfer ofgrain from country receival points to its four port terminals. Our marketing and trading arm is the leading grain acquirer in Western Australia and has operations in EasternAustralia, as well as offices in Hong Kong, Tokyo and Russia.

The 2015 Australian winter crop faced a number of challenges includinglarge fires during harvest which wiped out thousands of hectares in bothSouth and Western Australia, combined with extremely dry conditions inVictoria materially impacting the production in that state.

7MARKET UPDATE

A summary of the2015 Australian cropBy Jason Craig, CBH Group, Western Australia

CBH Group's Kwinana Port

8 SPECIAL FEATURE

SPECIAL FEATURE • SPECIAL FEATURE • SPECIAL FEATURE • SPECIAL

New policyenvironmentbrings Argentinaback into theexport arena

The positive impact on domestic prices was quite rapid, with corngoing from USD 105-107 pmt in August to USD 150 pmt in January,even with CBOT falling some 30cts/bu during the same period of time.For farmers, going from USD 107 to USD 150 meant going from a lossof about USD 5 pmt to a profit of about USD 30 pmt. Wheat went fromabout USD 135 to USD 180 pmt for 12.0% protein in the same periodof time.

Although this change has been much celebrated by all the agro-industry, the fact that it happened during December limited the impacton the 2015/2016 crop numbers. Argentina’s winter crops (wheat,barley and sunflower) had already been planted with strong areareductions (over 25 percent in wheat) by July/August and werebeginning to be harvested in December. The wheat crop is expectedthis year to be about 10.5 million tonnes, almost 2 million tonnes lowerthan the 2014/15 crop, while barley is expected at 4.25 million tonnesand Sunseed at 2.30 million tonnes.

“Argentina is finally back to theworld wheat markets……”

Added to the reduction in area, wheat suffered from low investment intechnology and poor weather conditions, which have led to irregularquality in this crop for a second year in a row. This has had a tougheffect on the domestic market where farmers receive about USD 35pmt more for 12.0% protein than for 10.5% protein wheat. This hastranslated directly into similar spreads on the export market.

Since the new government suspended the quota system and eliminatedthe export tax on wheat, exports have increased considerably from600,000 tonnes during December 2014 - January 2015 to over 1million tonnes between December 2015 and January 2016. It seemsArgentina is finally back to the world wheat markets and not justlimited to some circumstantial demand outside of Brazil. Argentina hasalready shipped wheat this year to Thailand, Korea, Morocco, Egypt,Brazil and even USA among others. Demand remains active and pricescompetitive.

Farmers were only able to take advantage of a more beneficial contextfor their summer crops, increasing mainly their previous expected areasdedicated to corn. Only some farmers were able to get seeds and otherinputs in time to increase their summer crop areas, and were able to doso within their planting windows for late planted grains in order toincrease their areas for the 2015/16 crop. The impact was seen mainlyon the corn area, which before the presidential election of October wasforecast to see a reduction of 25 percent, but by the end of the plantingseason we saw a decrease of less than 10 percent.

In concrete numbers, corn projections were showing a reduction from3.4 million hectares in 2014/2015 to 2.8 million hectares for2015/2016 by October, 2015, but between October and DecemberArgentina’s farmers increased this by 400,000 hectares, to a final areaof 3.2 million hectares, which could translate to a crop of about 24.5million tonnes according to most analysts. The consequence of this isthat a bigger proportion of this year’s crop was planted late andtherefore will be harvested only by June. This could bring some

By Ezequiel Hajnal, Agrosud SA,Buenos Aires, Argentina

On 10th December, 2015, Mr Mauricio Macri became President of Argentina. Mr Macri,former mayor of the city of Buenos Aires and founder of the “Propuesta Republicana”party, began a process of change that will have a deep impact on Argentina’s businessenvironment, especially in the agribusiness sector. During his first few days in office, andfulfilling one of his campaign promises, he announced a reduction of 5% on the export taxon soybeans and soya based by-products and removed the export tax on all other agro-industrial products. He also removed export quotas on wheat, corn, meat and dairyproducts (which had been in place since 2008). He also unified the exchange rate,legalising a free market for people to buy/sell foreign currency.

New Argentine President Mauricio Macri (left) with Agriculture Minister Ricardo Buryaile(centre) and Farmers Union leader (and member of Congress) Alfredo de Angeli

logistical complications during the early part of Argentina’s corn newcrop in March, April and May.

“…wheat crops could increase by over50 percent in a year, and corn could increase

by over 25 percent”

Differently from the corn and wheat, soybeans now remain the onlyproduct which pays export tax, even if reduced from 35 percent to 30percent. The government’s plan is that the tax on soybeans will bereduced by 5 percent a year in order to limit the fiscal impact thiscould have. Even if Argentina will continue to have a leadingparticipation on the soybean product markets, production is notexpected to grow considerably as it will on corn and wheat.

“a bigger proportion of this year’s crop wasplanted late and …this could bring some

logistical complications…..”

The soybean crop is still expected to be between 59 and 60 milliontonnes, remaining quite similar to last year’s number, in terms of botharea and yields. What might change the picture is that with this newcontext farmers might be more willing to sell their stored stocks, addingvolume into the market. The Argentine government also announcedthis January that they would allow once again temporary imports whichcould stimulate again the crushing in Argentina of Paraguayansoybeans. Argentina will continue being one of the leading soybeanproducers and crushers in the world, and we expect investments togrow on crushing capacity, storage and logistics too in the near future.

Given the encouragement of the new trading rules in Argentina, it isexpected that the biggest impact will only be for 2016/2017. We

expect wheat crops could increase by over 50 percent in a year, andcorn could increase by over 25 percent.

“..we expect investments to grow on crushingcapacity, storage and logistics too”

If things are done right, Argentina could surely have in the near future a60 million tonnes soybean crop, 40 million tonnes of corn, 20 milliontonnes of wheat and 5 million each of sunflower, sorghum and barleycrops. It will take plenty of investment on infrastructure and strongerconfidence for farmers and exporters for this to happen, but we aredefinitely much closer today than we were 6 months ago.

SPECIAL FEATURE

FEATURE • SPECIAL FEATURE • SPECIAL FEATURE • SPECIAL FEATURE

AGROSUD SA is an independent brokerage firm in Buenos Aires, Argentina with subsidiary offices in Montevideo, Uruguay, trading grains, oilseeds,meals, oils and other agri-products from South America (Argentina, Brazil, Uruguay, Paraguay) among other origins. While their core business is agri-commodities – both in bulk and in containers – they are also active in a very wide range of food products. You can visit their website,www.agrosudsa.com.ar or contact them at agrosud@agrosudsa.com.ar or by phone at +54-11-4310-7300.

A soybean crop in good condition

Early sown corn developing in Argentina

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10 GAFTA TRAINING

Education and Training

Delegates at last year’s Trade Foundation Coursein Singapore work on a case study

Gafta Professional Development (GPD)

Open to both members and non-members, ourGPD programme offers a wide range ofeducational opportunities and currently consists offour courses:

• Trade Foundation• Formation and Fulfilment of Contractual Obligations• Shipping the Goods• Dealing with and Resolving Problems

Taught through a mixture of lectures, discussions,practical exercises and case studies, these coursesvary in length from two to four days with each daydivided into two to three sessions. Successfulcompletion of each is based on passing an end ofcourse examination.

February Date Location

Modern Slavery Act Seminar 10 London, UK

Gafta President’s Reception 25 Minneapolis, USA

GPD Course “Shipping the Goods” 25-26 Minneapolis, USA

March

Evening Reception 3 Singapore

GPD Course “Formation and Fulfilment 3-4 Singaporeof Contractual Obligations”

Evening Reception 16 Kiev, Ukraine

GPD Course “Formation and Fulfilment 16-17 Kiev, Ukraineof Contractual Obligations”

Evening Reception 21 Rotterdam, NL

GPD Course “Formation and Fulfilment 21-22 Rotterdam, NLof Contractual Obligations”

April

Trade Foundation Course 5-8 London, UK

Hot topic seminar 20 London, UK

Arbitration Masterclass 26 London, UK

May

Evening Reception 10 Bucharest, Romania

GPD Course “Dealing with and 10-11 Bucharest, RomaniaResolving Problems”

GPD Course “Formation and Fulfilment 17-18 Izmir, Turkeyof Contractual Obligations”

Evening Reception 18 Izmir, Turkey

June

Evening Reception 8 Gelendzhyk, Russia

GPD Course “Formation and Fulfilment 8-9 Gelendzhyk, Russiaof Contractual Obligations”

Gafta London Dinner 14 London, UK

Hot topic seminar 22 London, UK

July

Evening Reception – wine tasting 5 Bordeaux, France

GPD Course “Dealing with and 5-6 Bordeaux, FranceResolving Problems”

Gafta’s DLP offers flexible tuition to fit in withyour personal lifestyle

Distance Learning Programme (DLP)

An exclusive service for Gafta members, our fullyinteractive Distance Learning Programme is analternative to the Gafta Professional Developmentprogramme. It is designed for students who preferflexible e-learning opportunities, and currentlyconsists of six modules:

• Introduction to Contracts• Fulfilling Contractual Obligations• Payment and Risk• Charterparties and International Carriage Regimes• What to do in Exceptional Circumstances• Problems and How to Resolve Them

Each module is delivered through a series oftutorials, self-assessment exercises, markedexercises and examinations. The programme takesapproximately 18 months to complete.

One of Gafta’s main services is to offer training, covering essential aspects of international trade such as understanding contracts andcontractual obligations, the shipping of goods by sea, the risks arising out of importing and exporting goods and the use of Gafta Arbitrationin resolving contractual disputes, to name a few.

We offer members the opportunity to participate through two distinct learning routes, either by attending face-to-face training at variouslocations worldwide through the Gafta Professional Development (GPD) route, or by enrolment to our Distance Learning Programme (DLP).Completion of either route entitles students to take various forms of examinations, successful completion of which awards them the GaftaTrade Diploma.

DIARY DATES 2016

Bespoke Training

Gafta also offers in-house tutorials. These aredeveloped in a bespoke fashion, and a flat-ratefee is applied depending on the specificrequirements. Tutorials are delivered inworkshop format with lectures introducing thesubject. Students are then guided throughfacilitated discussion on topics directlyrelevant to in-company practices with trainingtargeted at specific issues.

Gafta Trade Diploma

The Gafta Trade Diploma is an internationallyrecognised trade qualification. On completionof the Gafta Professional Development or theGafta Distance Learning Programme studentsare eligible to take the Trade Diplomaexamination. Eligible applicants who pass theexamination and have ten years relevant tradeexperience can apply to become GaftaQualified Arbitrators.

For more information, please contact us at

training@gafta.com

11GAFTA NEWS

Forthcoming Gafta CoursesShipping the Goods - Minneapolis, USA,25-26 February 2016

Shipping the Goods, one of four courses on the Gafta ProfessionalDevelopment programme, returns in 2016 with a revised programme, nowrunning over two days.

Upon completion of Shipping the Goods, students will have the essentialknowledge of contractual obligations and potential risks for all partiesinvolved when exporting and importing goods by sea. Successfulcompletion of Shipping the Goods is based on an end of courseexamination. Susan Hawker and Jaine Chisholm Caunt will present.Sponsored by AgMotion.

Venue: Hilton Minneapolis, 1001 Marquette Avenue, Minneapolis, MN 55403

Formation and Fulfilment of Contractual Obligations- Singapore, 3-4 March 2016

Gafta is back in Singapore this spring to hold the first of two coursesscheduled for this year. Successful completion of Formation and Fulfilmentof Contractual Obligations is based on an end of course examination.Sponsored by Reed Smith.

Venue: Hilton Singapore, 581 Orchard Road, Singapore, 238883

Formation and Fulfilment of Contractual Obligations- Rotterdam, Netherlands, 21-22 March 2016

Gafta will visit Rotterdam in March to hold the Formation and Fulfilment ofContractual Obligations course. Successful completion of Formation andFulfilment of Contractual Obligations is based on an end of courseexamination. Gafta’s Jonathan Waters and Charles Williams, Thilo Jahn andRebecca Crookenden of Thomas Cooper LLP will present. Sponsored byThomas Cooper LLP.

Venue: Hilton Rotterdam, Weena 10, Rotterdam, 3012 CM Add to Calendar

Trade Foundation Course- London, UK, 5-8 April 2016

The Annual Gafta Trade Foundation Course returns this spring with anupdated programme! Speaker and programme details will be announcedshortly. Please note, we have had significant interest expressed about thiscourse, and many bookings already, so please book as soon as possible ifyou would like to attend.

Date: 5-8 April 2016

Location: The venue is Rocket, under the Club Quarters Hotel in Lincoln'sInn Fields, located near the Gafta London Office.

Accommodation: Please note that accommodation is not included in thefees. Delegates can use the Gafta access portal on the Club Quarterswebsite to book rooms using our house rates.

Networking Dinners: Registration includes the networking dinner at RocketRestaurant on 4th April and a Thames cruise networking dinner on 7th April.

Venue: Rocket Holborn, 61 Lincoln’s Inn Fields, London, WC2A 3JW

The course was the brainchild of Gafta's Head of Legal, Jonathan Waters.Jonathan, who is both a barrister and an arbitrator, identified a demand forforeign qualified lawyers to gain a better understanding of English law.

Jonathan explained:

“I was presenting at a Gafta course in Kiev earlier last year and, followingconversations with a number of Ukrainian lawyer colleagues, it struck methat English law - which is the cornerstone of all Gafta contracts andarbitration hearings - has a number of peculiar characteristics which arefundamentally different from those found in other legal jurisdictions,particularly within Europe. I thought that it would be beneficial, therefore,for foreign qualified lawyers to gain a more detailed understanding of Englishlaw and of the English legal system generally"

The course, which ran over 2 days, was co-presented by Jonathan andIvanna Dorichenko of Clyde & Co and was attended by both lawyers andGafta arbitrators.

The first day included a guided tour of the Royal Courts of Justice in London(which is the home of the English High Court) followed by an informalpresentation about the English legal profession at the Honourable Society ofthe Inner Temple. The Inner Temple is one of four Inns of Court in England.Inns of Court are the professional associations for Barristers in England and

Wales and every Barrister must belong to one.

The second day took the form of a series ofpresentations and interactive groupdiscussions on a wide range of subjectsincluding; the English legal system (sourcesof English law, courts and tribunals,precedent, legal profession and thejudiciary), contract law, damages for breachof contract (including how damages areassessed) and litigation practice andprocedure (rules of evidence, professionalconduct requirements for lawyers, legalprivilege and without prejudicecommunications).

"There was a huge amount to cover," said Jonathan, “and both Ivanna and Iwere keen to make the course as practical and as interesting as possible,with a link to Gafta contracts and arbitration wherever possible. We verymuch hope to run a similar course in 2016. I would welcome any feedbackas to course content from interested members."

The course was very well received, with 75% of attendees rating it asexcellent. Jonathan can be contacted at jonathanwaters@gafta.com

Gafta held its first ever English Law for Foreign Lawyers course in December at the offices of Clyde & Co solicitors.

Positive feedback for Gafta Course on“English Law for Foreign Lawyers”

Arbitration Masterclass – London, UK, 26 April 2016

Venue: Rocket Holborn, 61 Lincoln’s Inn Fields, London, WC2A 3JW

More details will be available on this course on the Gafta website shortly.

Jonathan Waters

12 GAFTA NEWS

It has been confirmed that the European Food Safety Authority (EFSA) will not deliver its review of partial bans on threeneonicotinoid insecticides, introduced from 1st December 2013 over concerns for bees, until January 2017. The USEnvironmental Protection Agency (EPA) announced on 6th January a preliminary pollinator risk assessment for the neonicotinoidinsecticide, imidacloprid (which is one of the three neonicotinoids subject to a partial ban in the EU). This US study showed athreat to some pollinators. The release comes ahead of further reviews of clothianidin, thiamethoxam, and dinotefuran expectedfor December 2016. The report indicates that imidacloprid potentially poses risk to hives when the pesticide comes in contactwith certain crops that attract pollinators*.

Currently, we are not facing any new government bans or restrictions onglyphosate but the year has just begun! The next challenges will be thereviews of glyphosate at the meetings in May and September 2016 of the JointFAO/WHO Meeting on Pesticide Residues (JMPR). The findings from these willthen set the stage for Codex in April 2017 for tolerance and acceptable dailyintake reviews, discussions and recommendations. The recommendations willthen go to the Codex Alimentarius Commission in July 2017.

Following on from previous articles, the agro-chemical company BASF made asubmission to the rapporteur, the Chemicals Regulation Directorate (CRD) in

the UK, including a request to establish an import maximum residue level(MRL) of 0.5 ppm for saflufenacil in or on lentils. Data is still being assessed.The evaluation results, which were expected in the autumn of 2015, havebeen subject to various complications and delays, but it is expected now thatthe assessment and proposal will be submitted to EFSA by the end of February.Gafta will continue to keep you informed of progress.

*http://tinyurl.com/jtes9lt

Pesticide Residues: EU on neonicotinoids, glyphosate andsaflufenacil; US issues preliminary assessment of imidacloprid

The Notices clause seems to cause a surprising amount of confusion among users in respect of timings, but it is really quitestraightforward. There are three variations which might apply.(a) If a party has to send a notice by a particular date, it must send thatnotice by 23.59hrs, local time.

As our trade is an international trade with parties in different time zones,there has to be a mechanism whereby notices can be passed on in stringwithout the need for offices to be staffed 24 hours a day. This leads us tothe 16.00hrs rule.

(b) If a party receives a notice before 16.00hrs, local time, it must send it onbefore 23.59hrs the same day.

(c) If a party receives a notice after 16.00hrs, local time, it can validly passthe message on during the next working day.

Timings for Gafta Notices Clause

JOB VACANCIES AT GAFTAGafta is currently advertising for aDirector of its new Singapore Office,and also for a full-time GTAS Managerto be home-based in the UK. For further information about theseroles, please visit the Jobs page on theGafta website:http://www.gafta.com/Job-Board

Company name: Country: Manual:

JMC Haulage Transport by Road

Graham Blythe Transport by Road

PPD EWS Group Fumigation & Pest Control

GT Haulage Ltd Transport by Road

General Inspection & Maritime Surveillance Supervision, Sampling & Weighing

Wayne Barrett Transport Transport by Road

KJC Haulage Transport by Road

NEWLY CERTIFIEDGTAS MEMBERS:

Concern about bee health led to thepartial ban on three neonicotinoids

in the EU

13TRADE NEWS

Since 1958 COCERAL has been banging the drum for the grain trade at the EuropeanUnion institutions in Brussels.

1 Unistock, the European port silos storekeepers association.

Through many evolutions, we have found ourselves confronted with questionslike: why an association? Why in Brussels? Brussels is the heart of Europe. Itslandscape is made up of public institutions, political bodies; EU Member Stateand third country representations. Over thirty thousand interest groups arerepresented here; that rivals the number of people working for the EuropeanCommission alone. These include industry associations like COCERAL,Non-Governmental Organisations (NGOs), consultancies, think thanks,corporate private company representatives and individuals active at variouslevels. Representing various interests, everybody turns around the EUadministrative machine and its legislative, regulatory and political activities.The ‘weight’ of the laws or policy initiatives varies widely. The different levels- legislative, regulatory or political - impact several aspects of the social,economic and business spheres. Conversely, a myriad of EU industryassociations is active in Brussels, representing single economic and businesssectors. Despite that multitude, all of these have one common denominator: tobe heard as the voice of that particular sector and to make an impact.

When it comes to legislative and regulatory matters, EU decision makers generally prefer to deal with EU associations as an interlocutor, rather than individual companies. Why? Because an EU association promotes and safeguards a general interest for the benefit of all economic operators involved in the same business community while a single one would bring forward its own specific interest for its own benefit. And so, for example, forone single regulatory initiative, the legislator may receive the views (andoften the challenges) of the business sector directly impacted but also theones of NGOs and, at the same time, it may receive political pressure fromMember States.

In this scenario, an industry group strives to be heard and for its voice to betaken into consideration.

COCERAL is active in that perimeter, bringing forward the views of the EUcollectors, traders and storage operators of agricultural commodities, rice andolive oil as well as the ones of the EU distributors of fertilisers, plant protectionproducts and seeds.

COCERAL is a confederation of national associations: indeed, it speaks withone single voice in the interest of the sectors represented at European level.That empowerment is legitimised through democratic decision makingprocesses consolidated within its structure: 28 national associations in 19European countries, the European port silos group1, the “sister” organisationsin Switzerland and Serbia together with Gafta, do form COCERAL membership

and its related bodies providing expertise, direction and decisions for the graintrade and input industry distributors. Ultimately, inbetween COCERAL and theeconomic operators (almost 3,400) benefiting from its services and actions onthe market, there are national associations playing a key role at country level,ensuring that the sector policies are advocated and tailored at local levelmirroring COCERAL ones.

The team at Rue du Trone, 98 in Brussels follows a furbished ‘bouquet’ ofissues with a potential or an immediate impact on the key function of the tradeto move goods from areas of surplus into areas of deficit at affordable costs.Responsibilities are organised in three main blocks, such as Trade, Market andAgricultural Policy, Food and Feed Safety as well as EnvironmentalSustainability and Agrosupply.

The value of being a member and the corresponding benefit to the tradingcommunity across the EU is not always easy to appreciate. The dichotomybetween trading activities – characterised by rather fast market assessment anddecisions – and regulatory processes – dominated by lengthy decision-makingprocesses – does not always make clear COCERAL’s impact on the sectorrepresented, especially to operators outside the Brussels ‘bubble’.

To make some examples: COCERAL effectiveness is immediately appreciable,with tangible results for operators in the trade mechanism area, unblockingadministrative hurdles linked to certificates when goods are already in transiton the water, approaching the port of unloading; or in the area of importduties where COCERAL calls a reality check on the regulatory authorities whootherwise rely on theories to fix levies. COCERAL is however heavily engagedin long lasting political and legislative processes, not only the ones alreadyinitiated but also functioning proactively to stimulate reflections with thedifferent EU institutions.

For many years the group is engaged in leading the discussion on GeneticallyModified Organisms (GMOs) present in agricultural commodities and therelated regulatory environment in the EU not being synchronised with the restof the world. Next to this, the coming years will see COCERAL engaged in therevision of the Plant Protection Products (PPPs) authorisation process whichwill pose serious risks to the trade, not only from the aspect of residues butalso from a reduction in the list of authorised substances, which threatensgrain production. The Market in Financial Instruments (MiFID) implementationwill remain under COCERAL’s radar of activities for the year to come as wellas a deeper reflection on the wide concept of sustainability and its meaningfor the trade, which will enter the debate.

COCERAL and its work inBrussels on behalf of the tradeBy Teresa Babuscio, Secretary General, COCERAL

Following a complaint filed by industry in 2014, the European Ombudsman published its Decision on 15th January 2016 about the Commission’s handlingof the EU authorisation process for genetically modified food and feed. The complaint concerned delays in the authorisation of 20 GM food and feedapplications made between September 2012 and September 2014. The Decision finds that the Commission failed repeatedly to meet legally bindingdeadlines within the authorisation process for these products and also failed at a later stage in the process to make decisions “within a reasonable time”.“These failures constitute maladministration,” it concludes. Gafta is pleased to see that the Commission has improved its timelines over the last months andwe welcome the Commission approving products in compliance with its legal obligations.

Direct link to full statement: http://www.ombudsman.europa.eu/cases/decision.faces/en/63025/html.bookmark

Ombudsman confirms maladministration by EU Commission on GMO authorisations

14

CATEGORY A

AGMOTION TRADINGSINGAPORE 16 Collyer QuayLevel 20, Unit 0749318 Singapore T: +65 6818 9501F: +65 6818 9440E: chandra@agmts.sgContact: Chandra Mirimuthu

BUNGE CIS, LLC Build 214 Kozhevnicheskaya streetMoscow, 115114Russian Federation T: +7 495 721 18 18F: +7 495 721 18 17E: info.ru@bunge.comwww.bunge.ruContact: Boris Tovalev

E D & F MAN GRAINS(VOLCAFE LTD) Technoparkstrasse 7Winterthur, 8406Switzerland T: +41 52 264 9494F: +41 52 264 9400E: grain.trading@edfman.comwww.edfman.comContact: Laurent Delcourt

GTCS TRADING DMCC Office 1303, Swiss TowerJumeirah Lakes TowerDubaiUnited Arab Emirates T: +971 4 368 82 86F: +971 4 368 82 87 E: oleg@gtcscorp.comwww.gtcscorp.comContact: Oleg Kryokovskiy

HARBRO LTD Markethill, TuriffAberdeenshireAB53 4PAUnited Kingdom T: +44 1888 545200F: +44 1888 563939E: allan.bain@harbro.co.ukwww.harbro.co.ukContact: Allan Bain

NEWS IN BRIEF

New MembersPulse Feast, held on 6th January 2016, was a hugesuccess, with 141 events reaching 21 million peoplein 36 countries worldwide. These started in NewZealand and moved across the time zones to the WestCoast of America. Photos and images were sharedthrough social media using the hashtag #PulseFeast.For an idea of the momentum garnered by this eventfor the year ahead, please visit:http://issuu.com/iyp2016/docs/iyp_pulse_feast-report/1?e=23224521/32917851

https://www.tintup.com/t/pulsefeast2016

#LovePulses #IYP2016

Pulse Feast UK

Pulse Feast China

Members are reminded that from 1st July 2016, theenforcement of the Safety of Life at Sea (SOLAS)Convention requirements regarding the verification ofthe gross mass of packed containers will be applicable.The Verified Gross Mass (VGM) of all containers must beprovided to the ship’s master or his representative and tothe terminal or its representative in advance, beforestowage plans are submitted.

The responsibility for obtaining and documenting theVGM of a packed container lies with the shipper. Thereare some concerns that this new requirement could pose achallenge to the whole container shipping industry, so it isworth being prepared for the documentary requirements.Please see articles by Richard Faint in previous issues ofGaftaworld (September 2015 and December 2014).

The equipment to be used in verifying the VGM shouldmeet the applicable accuracy standards and requirementsof the state in which the equipment is being used. Membersare advised to check with their particular state organisation.In the UK this would be the Maritime and CoastguardAgency who will oversee a database of authorisedcompanies. That database will be accessible to approvedshippers and carriers and port/terminal operators.

New Gafta Sanctions ClauseFollowing requests from a number of members, Gafta hasrecently introduced a model Sanctions Clause.

The Clause, which is optional, is effective from 1st March2016 and can be found in Gafta 131 (Optional Clauses),which, like all other Gafta contracts, is freely available onthe Gafta website.

Many Members already have their own Sanctions Clause.Gafta's Clause, which was considered extensively byICPC and approved by Council at its January 2016meeting, is intended to be used, as a precedent, by thosemembers who do not have their own Sanctions Clause.

Under the Clause, both parties to a contract are requiredto comply with all binding trade, economic and financialsanctions relevant to performance under the contract.The Clause places various obligations on both parties, forexample, a Seller has the right to reject any destinationand the Buyer has the right to reject any originationcountry that would place either party in breach of arelevant sanction. In the event of either party breachingthe Sanctions Clause, the non-defaulting party has theright to terminate the contract.

Members should familiarise themselves with the full textof the Clause (www.gafta.com).

Container shipping – VGMrequirements from 1st July 2016

IYP Pulse Feast provesa huge success

The EU’s new Union Customs Code (UCC) will applyfrom 1st May 2016. The objectives of this new Code areto streamline procedures, make progress towards apaperless and fully electronic system while guaranteeingthe security of international trade flows. The currentCustoms Code was introduced in 1992, and therevisions therefore take into account the enlarged EU,changes in the nature and volume of international tradeflows and the need to include international norms andstandards in the EU Customs Code.

As well as moving towards a paperless system, underwhich customs declarations will be made electronically,

the UCC encourages all operators to become anAuthorised Economic Operator (AEO). AEO statusdemonstrates a trader’s commitment to supply chainsecurity and customs compliance. To become an AEOoperators must meet the four existing criteria(strengthened under the UCC) and two new criteria.AEO’s will benefit from certain customs simplificationsand priority treatment, so all Gafta members involved intrade into or out of the EU are advised to become AEO’s.

A factsheet on the UCC has been prepared by theEuropean Liaison Committee for Agriculture and Agri-Trade (CELCAA). This is available from Gafta on request.

New EU Customs Code to enter into force on 1st May 2016- Authorised Economic Operators will benefit under new regime

15

ZEN-NOH GRAINCORPORATION 1127 Highway 190East Service Road, CovingtonLouisiana, 70433United States T: +1 985 867 3500F: +1 985 867 3506E: kate.mills@zgcusa.comwww.cgb.comContact: Kate Mills

CATEGORY B

HSC TRADING 5 Habib, Thameur Sousse, 850 Tunisia T: +216 2377 5840F: +216 7330 5022 E: info@hsctrading.bizwww.hsctrading.bizContact: Amir Bouguezzi

CATEGORY C

BABC AGRICULTURALSERVICES COMPANY LTD Mauna Street, Block 4 Khartoum NorthSudan T: +249 912 131 814F: +249 183 489 015E: babcsudan@yahoo.comContact: Dr A H Suliman

CIS COMMODITYINSPECTION SERVICES(EGYPT) LTD 12 Mourad Bek StHeliopolis, CairoEgypt T: +20 2291 5291F: +20 22690 2342E: info@cis-egypt.comwww.cis-inspections.comContact: Walid Ismail

FAIR LEAD MARINE SERVICES Office No 201, Second FloorRiddhi Siddhi Arcade Plot No 13 Opp. Hotel Shiv GrandSector 8, Gandidham KutchGujarat, 370201 India T: +91 2836 236610 F: +91 2836 230475 E: krishna@fairleadmarine.inwww.fairleadmarine.inContact: S V R Krishna

INTERTEK ESTONIA OÜ Fosforiidi 4Maardu74114Estonia T: +372 6173 341F: +372 6173 341E: andres.petuhov@intertek.comwww.intertek.comContact: Andres Petuhov

LLC “NAVI MAR” 24 Karbysheva St. apt. 125 Kherson73000 Ukraine T: +38 067 551 64 47E: navi@navimar.com.uaContact: Igor Mulenko

VIC SRL Piazza del Mercato 5/2Marghera (VE)30175Italy T: +39 041 538 2679F: +39 041 538 2679E: info@vicworldwide.comwww.vicworldwide.comContact: Luigi Villani

CATEGORY E

SARRA KAY 1 Meadway GateLondonNW11 7LAUnited Kingdom T: +44 7785 700212 E: sarra@sarrakay.com

IGOR TINKOV ap. 63, b.150-a, Chervonozoryanyi ave.Kiev03039 Ukraine T: +38 06 7403 3900E: mailme.igor.tinkov@gmail.com

CATEGORY F

ECOTEC GLOBAL LABstr. Pishonivska, 0ff. 17Mail Box 20Odessa, 65029UkraineT: +380 503 951 284 E: ecotec-blacksea@ukr.netwww.ecotecgl.comContact: Igor Zubenko

EDELWEISS AGRI VALUECHAIN LIMITED Plot No. 70 & 71Second FloorSector-19 A, VashiNavi Mumbai, 400705IndiaT: +91 22 6941 2200E: avc.quality@edelweissfin.comwww.edelweissfin.comContact: Anil Maurya

ITS CALEB BRETT DENIZSURVEY – INTERTEK AGRISERVICES, TURKEY Karaduvar Mah. Atas Terminali IciMersin, 33001TurkeyT: +90 324 221 6690F: +90 324 221 6691E: fatih.baloglu@ intertekturkey.comContact: Fatih Baloglu

CATEGORY G

EDELWEISS AGRI VALUECHAIN LIMITED Edelweiss House, Off CST Road Kalina, Mumbai, 400098 India T: +91 22 6103 7600 E: vimal.saboo@edelweissfin.comwww.edelweissfin.comContact: Vimal Saboo

LBH GROUP Rijsdijk 13, Rhoon3161 HK Netherlands T: +31 10 50 65 000F: +31 10 501 3400 E: info@lbhmarketing.comwww.lbh-group.comContact: Anton Wintermans

PADID AVARAN KEIFIATSABZ KALA INSPECTIONSERVICES (PKSK) Unit 401, North 4th Floor Fazlali Beik St, Ghelichkhani AvMellat Sq, Shams AbadTehranIran T: +98 212 632 5991F: +98 212 632 5902E: psi9@glisgroup.comwww.glisgroup.comContact: Amir Madadian

CATEGORY J

COLFUM-INVEST LTD Volodarskogo street 1 suite 4TemryukTemryuk districtKrasnodar region353520Russian Federation T: +7 86148 53155F: +7 86148 53155E: colfum-invest.rus@yandex.ruContact: Dmytro Sidorenko

EDELWEISS AGRI VALUECHAIN LIMITED Edelweiss House Off CST RoadKalinaMumbai400098 India T: +91 22 6103 7600 E: yuvraj.rana@edelweissfin.comwww.edelweissfin.comContact: Yuvraj Rana

CATEGORY K

MALI EXIM SARL Kalaban Coura Immeubie Bore 1stEtage Route De L'Aeroport En Face Hotel WassuluBPE 2683 BKO Mali T: +225 71 25 4057 E: maliexim.sarl@gmail.comContact: Abdoulaye Traore

New Members

NEW MEMBERS

Registered in England & Wales with liability limited by guarantee under Company no. 1006456 I VAT Registration No. GB 243 8967 24

9 Lincoln's Inn Fields I London I WC2A 3BP I UK I T: +44 (0) 20 7814 9666 I F: +44 (0) 20 7814 8383 I E: post@gafta.com I W: gafta.com

The Grain and Feed Trade Association

Promoting international trade

The first International Spice Conference was held on 21-24 January, 2016 in Goa, India.Chief guest Mr Nils Meyer-Pries, Chairman of the European Spice Association and ManagingDirector of Fuchs Gewurze GmbH, opened the conference and exhibition on 21st January. Itwas attended by more than 600 delegates from over 35 countries. A report of this conferencewill be published in the next issue (April 2016) of Gaftaworld.

The inauguration of the International Spice Conference (left to right): Mr Gulshan John, Chairman, AllIndia Spices Exporters Forum; Mr Nils Meyer-Pries, Chairman, European Spice Association andManaging Director, Fuchs Gewürze GmbH; Mr CS Kartha, President, The Cochin Chamber ofCommerce and Industry; Mr Prakash Namboodiri, Vice Chairman, All India Spices Exporters Forum

First International Spice Conference President's Reception- Minneapolis, USA,25 February 2016Gafta is holding its annual President's Reception atHilton Minneapolis to introduce new President MrRolf Peters of AgMotion and US Commodities. Joinus for the opportunity to meet and network withRolf and Director General of Gafta, Mrs JaineChisholm Caunt. The event is kindly sponsored byAgMotion.

Evening Reception- Rotterdam, Netherlands,21 March 2016Gafta is holding an evening reception, as part ofthe Formation and Fulfilment of ContractualObligations course, at Stadshal Bar, HiltonRotterdam. Join us for an opportunity to networkwith Gafta's Head of Legal Jonathan Waters andCharles Williams, Thilo Jahn and RebeccaCrookenden of Thomas Cooper LLP. This event iskindly sponsored by Thomas Cooper LLP.

G A F TA L O N D O ND I N N E R

Tuesday 14th June 2016 No 8 Northumberland Avenue,

London WC2N 5BY

Further details to be announced soon

BOOKING OPENS IN FEBRUARY 2016