SOP Library

SOP NO: IDM'96 MSD NO. 96-11-30

Mission: Stabilization

Area: Grains Marketing (GM)

Activity: Distribution (GM-DN)

Title: Guidelines on the Distribution of the 150,000 MT Yellow Corn

Date Approved/Issued: 12/20/96

Date Effective: 12/20/96

Digest:
I. IDENTIFICATION OF QUALIFIED CORN USERS

1. An announcement / notice for the submission of the Letter of Intent ( LOI) to

purchase and the monthly consumption requirements as certified by the Bureau
of Animal Industry (BAI) shall be published in newspapers of wide circulation for
three (3) consecutive days.

2. Only corn Buyers who have been given allocation out of last year's P 250,000
MT. importation and who fully complied with their commitments to pay and
withdraw their allocated volume may submit the LOI.

Interested buyers who have been registered with BAI, Quezon City as of May
12 ,1996 who have not been given allocation out of the 250,000 MT. shall also
be allowed to submit a letter of intent.

3. Corn users who did not fulfil their commitments to pay and withdraw their
allocated volume in part or in full from the 250,00 MT importation are disqualified
from participating in this transaction.

II. SUBMISSION / EVALUATION OF THE LETTERS OF INTENT

1. Letters of Intent to purchase shall be executed only by the Owner,

President, General Manager or Chairman of the Board and should be
submitted to the Corn Allocation and Adjudication Committee care of NFA after
the first day of publication of the announcement /notice . A notarized
authorization to transact business with NFA shall be executed only by
employees/officials or Boards of Directors of companies , associations or co-
operatives.

2. The LOI must indicate the place of withdrawal or disport prepared by the Buyer.
However; the NFA reserves the right to assign buyers to any disport other than
the one they signified in case the situation warrants.

3. All interested corn users will be given five (5) calendar days to submit the
aforecited requirements reckoned from the last day of publication of the notice.

4. An evaluation of the submitted requirements shall be undertaken by the Corn

Allocation and Adjudication Committee and same will be counterchecked with
the corn users registration with the Bureau of Animal Industry (BAI). The
committee will then allocate the 150,000 MT. based on the verified requested
volume.
 5. Request for corn allocation shall be up to a maximum of one-and-one-half (1 ½)
months consumption requirements.

III. CORN ALLOCATION

1. After evaluation of the committee, the list of corn users with the allocated volume
shall be published for three (3) consecutive days in the same newspapers to give
corn user a chance to verify and question the allocation if warranted. After which
a re-evaluation shall be under taken. Complaints shall be filed within three (3)
working days reckoned from the last day of publication of the listing.

2. In the event that the total requested volume for purchase is lower than the
150,00 MT. imported corn, the unallocated volume will also be allocated to the
same buyers with their confirmation.

3. The price of the corn ex-vessel Manila shall be P5.95 per kilo for about 50,000
MT. and P5.75 per kilo ex-vessel ATI, Mariveles for around 100,000 MT.

4. A minimum allocation equivalent to one (1) truckload or 25 MT will be given to

qualified buyers if the pro-rated allocation computed is less than 25 MT.

5. A Performance Security equivalent to P1.00 per kilo of the allocated volume shall
be required from the corn user to guarantee that the volume of imported corn
shall be purchased totaly. The performance security shall be forfeited in favor
of the DA/NFA in case the buyer fails to pay the full volume allocated within the
stipulated period.

6. In case the buyer fails to withdraw the full volume paid, any unwithdrawn balance
shall be sold by the DA/NFA and any losses incurred in the transaction shall be
charge against the performance security amount. Moreover, the performance
security cannot be applied as payment for the equivalent volume requested for
reduction from the original allocation given.

7. Allocation will be given on a first-come first-serve basis, based on the order of

payments made on the performance security of P 1.00 per kilo. The priority
assignment on port preferences shall also depend on the payment of the
performance security.

8. Payment of the performance security shall be made within two (2) days upon
receipt of the notice of allocation. Payment of the remaining balance shall be
made within 48 hours after receipt of payment from the DA thru NFA.

IV. WITHDRAWAL OF CORN ALLOCATION

 1. Withdrawal of corn allocation shall be ex-vessel/clamshell. The discharging rate
shall be based on the contract of supply with the supplier. A corresponding
demurrage penalty based on actual contract of supply with foreign supplier shall
be imposed if barges are not positioned alongside vessel as scheduled and the
discharge rate not attained or if the barges are not towed within (2) hours after
completion of the loading.

2. The 150,000 MT. of corn will arrive in six vessel loads of 25,000 MT. each more
or less and priority to vessel assignment shall be based on the order of
submission of complete requirements by the applicants particularly the
performance security of P 1.00 per kilo.

3 Only one integrated cargo handler shall be allowed per vessel. Selection of the
cargo handlers shall be based on majority's decision based on volume. In hiring
a common cargo handler, the corn users can pool their resources together.
Moreover, the corn users with allocations coming from one (1) vessel must
designate only the authorized representative to officially act or transact business
in their behalf. In this case each corn user must issue and submit to DA/NFA
individual Special Power of Attorney authorizing the elected representative to act
and transact business in their behalf.

4. Acceptance of the corn stocks by the user/cargo-handler shall be based on the

Bill of Lading ( BL ), net of damage stocks on board, if any.

5. Issuance of stocks shall be based on the Authority to Issue ( AI ) per vessel /

cargo handler. There shall be no individual AIs / issuances to corn users.

6. An independent surveyor shall be contracted by DA/NFA to monitor quality and

quantity of stocks. The consignees shall likewise hire their own surveyor to
oversee the quality and quantity of stocks received by them.

7. NFA can also offer integrated services at Manila port, ex-vessel at the rate of
P150.00 per MT. or P 0.15 per kilo. However said rate shall be subjected to
change.

8. In case of non-withdrawal of stocks, the allocated corn shall be disposed

depending on the decision of the Corn Allocation and Adjudication Committee.

V. PAYMENT SCHEME

1. Payment shall be undertaken as follows:

1.1 Payment shall be either in cash/manager's/cashier's check in favor of NFA at

its Metro Manila Office, Finance section at the United Nation Ave., Manila for
the following:
 1.1.1 Performance security, equivalent to P1.00 per kilo of the allocated
volume.

1.1.2 Remaining balance between the total cost plus incidental expenses
less performance security payments made if NFA integrated services
was availed.

1.1.3 Remaining balance between total cost less performance security

payments made if buyer hired a common integrated services
contractor.

1.2 Payment shall be for the whole volume of imported yellow corn allocated.

1.3 End-users who resell or divert their allocation and those who will not get or
will reduce their allocation shall be blacklisted in future transactions.

1.4 The Corn Allocation and Adjudication Committee reserves the right to
determine, set, re-allocate or forfeit any allocated volume.