US embassy cable - 05DHAKA2484

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