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Exchange of Letters constituting an Agreement between the Government of New Zealand and the Government of Fiji amending the Agreement on Sugar of 18 October 1985 [1986] PITSE 11 (5 June 1986)

EXCHANGE OF LETTERS CONSITUTING AN AGREEMENT BETWEEN THE GOVERNMENT OF NEW ZEALAND AND THE GOVERNMENT OF FIJI AMENDING THE AGREEMENT ON SUGAR OF 18 OCTOBER 1985

(Suva, 5 June and 24 July 1986)

ENTRY INTO FORCE: 24 JULY 1986

No. 1

His Excellency Mr ROD GATES High Commissioner for New Zealand in Fiji

to

The Honourable Mr M QIONIBARAVI Deputy Prime Minister and Minister of Finance

New Zealand High Commission
Suva

5 June 1986

My Dear Minister,

I have the honour to refer to the Agreement on Sugar between the Government of New Zealand and the Government of Fiji done at Nassau on 18 October 1985, hereinafter referred to as the Agreement. Noting recent discussions between representatives of the Fiji Sugar Marketing Company (FSMC) and the New Zealand Sugar Company (NZSC) which established the desirability of conducting some portion of their trade in raw sugar using Executable Order terms and which foreshadowed the possible use of provisional pricing arrangements, and recognising the consequent need to make the compensation provisions of the Agreement applicable to such transactions, I have the honour to propose the following:

1. Where any raw sugar is sold by FSMC and purchased by NZSC using Executable Order terms:

(j) any reference in the Agreement to the purchase or supply of raw sugar shall be deemed to include indirect purchase or supply, through a broker, by the use of Executable Order terms;

(ii) any reference in the Agreement to the contract price for raw sugar shall be deemed to be a reference to the prices basis 96 degrees polarisation at which the Seller's Executable Orders (SEOs), relating to that sugar., are executed by FSMC plus or minus any amount by way of premium or discount specified in the price determination clause of the commercial contract between FSMC and NZSC, and/or the prices basis 96 degrees polarisation established by NZSC to call at the London daily price plus or minus any amount by way of premium or discount specified in the price determination clause of the commercial contract. The amount of any compensatory payment shall therefore be the difference between the contract price as calculated above and the agreed minimum price of US10.5 cents per pound stipulated in Article IV of the Agreement;

(iii) the documentation to be furnished to the Government of New Zealand by the Government of Fiji under Article VI of the Agreement shall include any contract between FSMC and the sugar broker for sugar sold using Executable Orders, the commercial contract between FSMC and NZSC, evidence (for example by telex message) of each execution of SEOs, and the addendum to the commercial contract between FSMC and NZSC which establishes the contract price at which such sugar has been sold by FSMC, in order that all contract prices may be verified against the New York No. 11 or London No. 6 futures contract quotations or against the London daily price, before payment of any compensation.
2. In all cases where a provisional price for sugar is agreed between FSMC and NZSC, payment of any compensation due in respect of such sugar shall be delayed pending receipt of documentation from Fiji which establishes the final price for that sugar.

3. Where raw sugar is purchased by NZSC and supplied by FSMC on terms other than Executable Orders, the Agreement shall continue to operate unchanged.

If the foregoing is acceptable to the Government of Fiji, I propose that this letter and your confirmatory reply should constitute an agreement between our two Governments which shall enter into force on the date of your reply.

Yours sincerely,

R. GATES,
High Commissioner.

No. 2

The Honourable Mr M. QIONIBARAVI
Deputy Prime Minister and Minister of Finance

to

His Excellency Mr ROD GATES
High Commissioner for New Zealand in Fiji

24 July 1986

My Dear High Commissioner

I acknowledge receipt of your letter 26/2/4 of 5 June which states as follows:

[as in No. 1]

I confirm that the foregoing is acceptable to my Government and your letter and this confirmatory reply constitute an agreement between our two Governments which shall enter into force from the date of this reply.

Yours sincerely,

M. QIONIBARAVI
Deputy Prime Minister and Minister of Finance