|Letter From Wilmar
14 February 2017
It’s been brought to our attention that some growers are concerned the delay in reaching agreement with QSL on the terms of the GEI Sugar Sales Agreement (GEISSA) prior to the current marketing nomination date of 28 February 2017 will adversely affect their ability to exercise choice or undertake forward pricing. The purpose of this email is to confirm that growers will be able to exercise choice irrespective of whe they sign a Cane Supply Agreement (CSA) for the 2017 season. As you will recall, Wilmar offered all growers the benefit of the Marketing Nomination Transfer Agreement (Transfer Agreement) by letter dated 19 December 2016. As previously advised, under the Transfer Agreement, growers:
- have the ability to sign a CSA with Wilmar and receive the benefit of the marketing and forward pricing options offered by Wilmar; and
- preserve their right to choice, through an option to transfer all or part of the eligible amounts of their marketing nomination and associated GEI sugar and pricing from Wilmar to QSL, once a GEISSA is signed.
The terms of the Transfer Agreement expressly stated that, subject to specified conditions (including, for example, QSL accepting a transfer): “…signing a CSA prior to or post 28 February 2017 will not adversely impact your ability to request a transfer of a marketing nomination from WSAT to QSL.” For growers who did not wish to sign a CSA until after Wilmar signed a GEISSA with QSL, the Transfer Agreement also allowed a grower to sign a CSA and determine their choice of marketer within 10 business days after the GEISSA was signed. In order to make it absolutely clear that growers will have the benefit of choosing a GEI marketer for the 2017 season, whether the grower signs a CSA before or after a GEISSA is signed, and to give growers more time to sign a CSA and make a marketing nomination, we have decided to revise the Marketing Nomination Date. As summarised below, depending on when a grower first signs a CSA for the 2017 season, the Marketing Nomination Date for that season will now be the later of:
- 28 February 2017; and
- the date that is 15 business days after that grower signs the CSA.
In summary, this means: Growers who sign a CSA prior to a GEISSA being finalised with QSL have the option of nominating Wilmar as their marketer during the marketing nomination window applicable to them:
- For growers who have already signed a CSA, the window closes on 28 February 2017.
- For growers who have yet not signed a CSA, the window closes on the date that is 15 business days after they first sign a CSA for the 2017 season.
If no nomination is made within the applicable marketing nomination window, the grower’s nomination will initially default to Wilmar. Growers who have signed a CSA prior to a GEISSA being finalised and whose GEI sugar is nominated to Wilmar (by choice or by default), may subsequently transfer all or part of their nomination and any associated GEI sugar and pricing under the terms of the Transfer Agreement to QSL once a GEISSA with QSL is finalised. Growers who sign a CSA after the finalisation of a GEISSA with QSL will be able to nominate their GEI sugar to Wilmar or QSL under the CSA during the 15 business days after they sign that CSA for the 2017 season. If no nomination is made within that marketing nomination window, the grower’s nomination will default to Wilmar. Consistent with the above extension of the Marketing Nomination Date, the Pricing Nomination Date for a grower under the Wilmar Pricing and Pooling Agreement (PPA) will also be extended to be the same date as the Marketing Nomination Date applicable to that grower. It’s important to note however that the range of Wilmar pricing, pooling and advance payment options available to you will be dependent on the date you submit your pricing nominations. While growers who make their pricing nominations prior to 28 February 2017 will have access to the full PPA offering, those submitting their pricing nominations at later dates will only be able to take advantage of the Wilmar pricing, pooling and advance payment options available at that time. Next steps In the next few days, you will receive further details to give effect to the matters discussed in this letter, as well as further details of the pricing, pooling and advance payment options under the Wilmar PPA. In the meantime, we are meeting regularly with QSL to continue negotiations on a GEISSA and our priority remains reaching an agreement as soon as possible.
JOHN PRATT Executive General Manager – North Queensland