CARE/BANGLADESH (CARE/B) JUNE 2005 CALL

UNCLAS SECTION 01 OF 02 DHAKA 002484 SIPDIS AIDAC DCHA/FFP - MATTHEW NIMS, ALLYN MOUSHEY, P.E.BALAKRISHNAN, JUDY GROOMS DCHA/POD - JEANETTE LEE E.O. 12958: N/A TAGS: EAID BG SUBJECT: CARE/BANGLADESH (CARE/B) JUNE 2005 CALL FORWARD OF 16,800 MT TITLE II CRUDE DEGUMMED SOYBEAN OIL FOR THE FY 2005-2009 DAP REF. (A) CARE/B REVISED ANNUAL ESTIMATE OF REQUIREMENT DATED APRIL 24, 2005 (B) TRANSFER AUTRIZATION AWARD (FFP-A-04-000079- 00) MODIFICATION NO. 3, DATED APRIL 12, 2005 (C) CARE LETTER, DATED MAY 25, 2005 (D) DHAKA 01550 (E) CARE BELLMON ANALYSIS UPDATE, DATED MAY 2, 2005 (F) 1998 STATE 86836 ¶1. The purpose of this cable is to provide Mission concurrence with CARE/B June 2005 call forward of 16,800 MT of Crude Degummed Soybean Oil (CDSO) in bulk for arrival in September/October, 2005 under the SHOUHARDO DAP. ¶2. The call forward (CF) amount, 16,800 MT of CDSO, has been approved for monetization through private channels for the FY 2005 program (Refs. A and B). CARE/B has received the BDG concurrence for the import of the CDSO and sale of the same to the private firms. ¶3. CARE/B has signed agreements with two private edible oil business firms selected through open bidding procedures for the sale of total CF amount (16,800 MT). The quoted (sale) price of the CDSO is about 80% of the FFP total cost and freight estimate of $610 per MT. Specifications for CDSO (Ref. C) are provided below: ..Unsafonifiable Matter: 1.50% maximum ..Free Fatty Acid as Oleic: 0.75% maximum ..Moisture and Volatile Matter and Insoluble ..Impurities: 0.30% maximum ..Flash Point: 250 Degrees Fahrenheit minimum ..Phosphorous: 0.02% maximum ..Packing: Bulk ¶4. This is the first time that Title II DAP commodities are being monetized through open bidding procedures. CARE/B invited tenders beginning May 6, 2005, with May 23, 2005, the last date for receipt of bids. The previously approved May 2005 CF of 3,000 MT refined soybean oil (Ref. D) was cancelled as the quoted price was very low compared to the prevailing market price. CARE/B has followed standard bidding procedures for the sale of the CDSO. Two local firms were selected through an open bidding process for the sale of the CDSO. CARE/B finds the quoted price of CDSO at $488 per MT reasonable as compared to the prevailing market price. ¶5. The Mission's Food Security and Disaster Management Team concurs with the Bellmon analysis update (Ref. E) The analysis is based on the instructions provided in Ref. F on the Bellmon certification requirements for P.L. 480 Title II activities. Based on the Bellmon analysis, USAID/Bangladesh has determined that the importation of the proposed call forward level of 16,800 MT of CDSO in Bangladesh will not result in a substantial disincentive to or interference with domestic production or marketing of crude soybean oil in Bangladesh. The bidders, in accordance with sales agreements with CARE, are responsible for storage and distribution of the CDSO. CARE has confirmed to USAID that the two bidders, as part of the prequalification process, have demonstrated to the satisfaction of CARE that they have adequate storage and handling facilities to prevent the spoilage or wastage of the oil. Accordingly, USAID/Bangladesh has determined that adequate storage facilities will be available to prevent the spoilage or wastage of the oil. The call forward level of 16,800 MT, expected in September/October, 2005, will cause no substantial disincentive and present no storage problems. The Mission Director has determined that the shipment of 16,800 MT of Title II CDSO is in compliance with the Bellmon amendment requirements for P.L. 480 Title II activities (Ref. F). ¶6. Mission concurs with CARE/B's June 2005 call forward for shipment of 16,800 MT of CDSO in bulk for September/October, 2005 in-country arrival. ¶7. Mission requests DCHA/FFP approval of the full CARE/B call forward level, to arrive in-country in September/October, 2005. CHAMMAS