But with 1 more week before the season ends, at this point, it seems as if though BSI and BSFCA will not be able to reach an agreement on payment for bagasse. That's a major point of concern for industry stakeholders because part of the tenuous compromise between the cane farmers and the factory owners was that an agreed price for bagasse would be reached by the end of this season. It's a major reason why the cane farmers decided to start delivering their cane to start the milling season.
The main reason for that delay in an agreed price is that the farmers have rejected all counter proposals put forward by the representatives for the factory owners.
CFO Carballo explained the reasoned formula for all their proposals so far, which they believe is in the best interest both sides:
Belizario Carballo, CFO - BSI
"The way we arrive at that is essentially the methodology is one that seeks to determine percentage of fiber that comes with the cane that results on the generation of electricity by BELCOGEN that is sold to BEL and that percentage we have determine it to be 29%. So 29% of the fiber ends up generating electricity that is sold by BELCOGEN to BEL and the basis for valuing that amount of fiber is with reference to the cane price because that is the only market price that we have for cane and we are seeking to compensate or to pay farmers for the fiber component in the cane; the fiber component that is used to generate electricity that is sold to BEL and so base on the case price for 2013 which is $74.20 and taking the percentage of fiber that is in the cane which is 15.41% in the case of the 2013 crop. That amounts to a payment of $11.43 per ton of fiber. Based on the quantification on the amount of fiber that is used to generate electricity to BEL we are valuing that amount of fiber at $11.43 per ton of fiber and that comes up to the sum of $550,000.00 or 51cents per ton of cane."
Representatives of the BSFCA have rejected those numbers, and they refuse to accept 51 cents per a ton of cane as payment for bagasse.
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