Vegetable Oils; Domestic and Import Contract

Transcription

1 Vegetable Oils; Domestic and Import Contract Follow the links below to each sub-section: General Rules Uniform Export Contract; Domestic and Imported Vegetable Oils Grades and Quality Settlements Quantity Changes and Taxes Terms Time of Shipment Performance of Contract at Time of Shipment Weight Freight Rates Routing Tank Cars and/or Tank Trucks Commission or Brokerage Arbitration Contingencies Default Force Majeure

2 Return To Menu General Rules Section Text Rule 1. The adoption of these rules by contracting parties is optional. Any contract to which these rules may apply may incorporate all, some or none of them, as the parties to the contract shall agree, In the event of any conflict between any of these rules and any provisions of a contract to which they may apply, the provision of the contract shall govern. Rule 2. At the first meeting of the Board of Directors in such calendar year, the President shall (subject to the approval of the Board) appoint a Domestic and Import Committee on Vegetable Oils. A quorum of the Committee shall be a majority of the number appointed. It shall be the duty of this Committee to discharge the obligations imposed upon it by these rules. Rule 3. All disputes and controversies arising under these rules, which pertain to imported and domestic vegetable oils, shall be settled by arbitration as provided in the Americas Fats and Oils Association, Inc. Arbitration Rules as amended from time to time all of which are hereby incorporated in and made part hereof. Rule 4. The Committee shall have power and authority to interpret these rules, and its interpretation, not inconsistent with the By-Laws or rules of the Board of Directors of the Association, shall be binding on all persons interested.

3 Rule 4A. The Committee on Imported and Domestic Vegetable Oils may be associated with or be a component part of the Committee on Export and Domestic Trading Rules for Vegetable Oils as determined by the Board of Directors. Rule 4B. Any person sending any communication required or permitted by these rules shall have the burden of obtaining adequate proof of its timely receipt. Return To Menu Uniform Domestic Contract for Domestic and Imported Vegetable Oils Section Text Rule 5. The following form of contract is the official American Fats and Oils Association contract for domestic and imported vegetable oils, in bulk and in drums and, unless otherwise specified therein, is the contract entered into by parties trading pursuant to these rules: American Fats and Oils Association Uniform Domestic Contract for Domestic and Imported Vegetable Oils 1. Seller: Buyer: Commodity and Grade:

4 6. 7. Packing Quantity: Shipment: Price: Terms Special Conditions

5 28. Unless otherwise specified herein, this contract is made under the rules of the American Fats and Oils Association for domestic and imported vegetable oils, which rules are deemed incorporated herein as a part hereof. The parties hereto agree that the exclusive remedy for the resolution of all disputes, controversies, or claims arising out of or relating to this contract is arbitration in New York City or such other place as all parties shall agree, conducted pursuant to the rules entitled American Fats and Oils Association, Inc. Arbitration Rules ( Rules ). The Rules are hereby deemed incorporated into this contract as if fully set forth herein. Demand for arbitration shall be made not later than one calendar year from the date that the conveyance carrying the material has arrived at its destination ( Arrival Date ) or the right to arbitrate shall be conclusively presumed to have been forfeited and no party shall have the right to pursue any alternative remedy. Notwithstanding anything to the contrary contained in the preceding sentence: (a) demand for arbitration of a claim for a deficiency in specifications or weights shall be made within 30 calendar days after the Arrival Date; and (b) if seller is not the original on board shipper of the material, seller shall have 15 days from the date of seller s receipt of a timely arbitration demand from purchaser in which to institute a proceeding against seller s supplier, which proceeding may be consolidated with any proceeding brought with respect to the same material. The rights conferred upon seller by the proceeding sentence shall be valid even if the 15 day period commences or expires after the expiration of one year from the Arrival Date. In the absence of proof to the contrary, receipt of a demand for arbitration shall be conclusively presumed to have occurred five (5) business days after the demand was mailed by the claimant to the respondent or to the administrator of the arbitration, as the case may be.

6 If partial payment has been made for the goods which are the subject of this contract and the demand for arbitration seeks only the balance of payments due for those goods, together with such additional money damages as are incidental to that balance (such as interest and attorney s fees), arbitration shall be timely if commenced within one year from the claimant s receipt of the most recent payment. * The provisions of this contract shall be construed and the rights of the parties hereto determined pursuant to and in accordance with the laws of the State if New York and of the United States of America. Date (buyer) - ( seller) - as Brokers Buyer s Order No. - Seller s Order No. Return To Menu Grades and Quality Section Text MANY VEGETABLE OILS ARE MADE TO PROPRIETARY SPECIFICATIONS WHICH ARE UNPUBLISHED. IT WILL BE NECESSARY TO CONTACT THE MANUFACTURERS OF THOSE OILS TO DETERMINE THEIR SPECIFICATIONS. THE AMERICAN FATS & OILS ASSOCIATION TAKES NO RESPONSIBILITY FOR THE SPECIFICATIONS OF PROPRIETARY VEGETABLE OILS, WHETHER

7 OR NOT PURCHASED UNDER A CONTRACT SPECIFYING APPLICATION OF THESE RULES. Rule 6. Crude Corn Oil (Maize) Oil shall be pure and produced only from corn (maize) of fair average quality. It shall meet the following specifications, with all analytical tests determined in accordance with the American Oil Chemists Society (AOCS) methods. Flash Point shall not be below 250 degrees F. as determined under Method Cc 9b-55. Unsaponifiable matter 2.0% maximum as determined under Method Ca 6a-40. Iodine Value 120 to 132 acceptable range as determined under Method Cd Moisture and volatile matter and insoluble impurites 1.0% maxuimum as determined under Method Ca 2c-25 for moisture and volatile matter and Ca 3-46 for insoluble impurities. Insoluble impurities.8% maximum as determined under Method Ca A neutral oil loss not exceeding 7.5% as determined under Method Ca 9F-57. Rule 6A. Low Erucic Acid Rapeseed Oil (Lear/Canola) shall be pure and produced only from low erucic acid rapeseed of fair average quality. It shall meet the following specifications, with all analytical tests determined in accordance with the American Oil Chemists Society (AOCS) methods. 1. CRUDE

8 FFA (as Oleic Acid): 1% Maximum M & I 0.5% Maximum Flash Point 150 Minimum Refined and Bleached Color (AOCS Method Cc 13b-45) 1.5 Red/15 Yellow Maximum Chlorophyll 30 PPM Maximum Sulfur 10 PPM Maximum Erucic Acid (as Percent of MASS) 2% Maximum

9 2. CRUDE DEGUMMED FFA (as Oleic Acid): 1% Maximum M & I 0.3% Maximum Flash Point 150 Minimum Refined and Bleached Color (AOCS Method Cc 13b-45) 1.5 Red/15 Yellow Maximum Chlorophyll 30 PPM Maximum Sulfur 10 PPM Maximum

10 Phoesphorous 200 PPM Maximum Erucic Acid (as Percent of MASS) 2% Maximum 3. CRUDE SUPER DEGUMMED FFA (as Oleic Acid): 1% Maximum M & I 0.3% Flash Point 150 Minimum Refined and Bleached Color (AOCS Method CC 13b-45) 1.5 Red/15 Yellow Maximum

11 Chlorophyll 30 PPM Maximum Sulfur 8 PPM Maximum Phosphorous 50 PPM Maximum Erucic Acid (as Percent of MASS) 2% Maximum 4. REFINED, BLEACHED, DEODORIZED FFA (as Oleic Acid) 0.10 Maximum M & I 0.5% Maximum Smoke point

12 232 deg C Minimum Color (AOCS Method CC 13b-45) 1.5 Red / 15 Yellow Maximum Phosphorus 5 PM Maximum Erucic Acid (as Percent of MASS) 2% Maximum Peroxide Value 1% Maximum Flavor Bland Rule 6B. Semi refined Cottonseed Oil shall be pure and produced only from fair, average quality cottonseed, by the solvent extraction process. The oil must meet the following specifications;

13 Appearance: Reasonably free from visible foreign material. Clear at temperatures sufficiently high to melt the stearine. Odor and flavor: Sweet in flavor and odor. Color: Max 12.0 red/35 yellow on 5 1/4 inch Lovibond scale. FFA: 0.25% M & V: 0.25% Flash Point: 250 min. Rule 6C. Crude peanut (groundnut) oil shall be of good merchantable quality, produced only from peanuts (groundnuts) of fair average quality by hydraulic, expeller, and/or solvent extraction. It shall meet the following specifications: Moisture and volatile matter and insoluble impurities 1.0% maximum. Quantity and tolerances rules 24, 25 and 26 of the American Fats and Oils Association, Inc. Rules for Vegetable Oils (Export Contract) shall apply to the extent applicable. Buyer shall credit seller at the rate of 3/4 of 1 percent of the contract price for each 1 percent refining loss of 5% or less, fractions in proportion. Refining loss in all cases shall be calculated on the weight of the crude oil. Rule 6D.High Erucic Acid Rapeseed Oil shall be pure and produced only from high erucic acid rapeseed of fair average quality. It shall meet the following specifications, with all analytical tests determined in accordance with the American Oil Chemists Society (AOCS) methods.

14 FFA (as Oleic Acid) 2% Maximum M&I 0.5% Maximum Flash point 150 deg Minimum Lecithin (Expressed as Phosphorus) 300 PPM Maximum Erucic Acid (as Percent of MASS) 45% Minimum Rule 6E. Distiller s Corn Oil shall be pure and recovered from the alcohol manufacturing process. It shall meet the following specifications, with all analytical tests determined in accordance with the American Oil Chemists Society (AOCS) methods: FFA: 15.0% base, with 1:1 discount up to 20% maximum AOCS

15 Method Ca 5a-40 Moisture: 1.0% maximum AOCS Method Ca 2b-38 Insoluble Impurities: 0.5% maximum AOCS Method Ca 3a-46 Unsaponifiables: 2.5% maximum AOCS Method Ca 6a-40 MIU total: 3.0% maximum Calculation Required IV: 115 minimum AOCS Method Cd 1d-92 General Appearance: reddish brown colored Return To Menu Settlements Section Text Rule 7. OFFICIAL SAMPLE: The Official Sample shall be three one-quart samples. These portions should be packed in clean, dry and new containers. Either tinned metal containers or high-density polyethylene bottles fitted with metal caps having oil resistant cap liners are acceptable. Polyethylene containers must be enclosed for shipping in custom-made, close fitting cardboard containers. The sample must be drawn at the

16 time of loading by a qualified sampler in accordance with AOCS Official Method for sampling crude oils (C1-47-Continuous Flow and Trier methods), and shall be so indicated on invoice. If the Shipper neglects to provide such a sample at the time of loading, or fails to show on invoice that an Official Sample has been taken in accordance with the AOCS Official Methods as noted above. Shipper shall forward to Consignee within one working day of completion of loading, a one-quart sample, and label of sample must designate type of oil and plant destination. The second quart is the Shipper s sample, and the third quart is to be retained by Shipper as the referee sample. The following label has been approved: OFFICIAL LOADING SAMPLE Oil Shipper (Firm s name) Plant Location Tank car No. or tank truck No. Loaded Date 20 Shipped Date 20 To

17 (Name of buyer firm) Plant located at Rule 8. The basis for handling loss adjustment in domestic and imported vegetable oils shall be determined in the following manner by Shipper and Consignee, and, when so determined, shall apply to settlements with all intervening buyers, if any. If the difference between the Shipper s and Consignee s loss analysis is not over three-tenths of one percent, the settlement will be made on the average of Shipper s and Consignee s analyses. If the difference between Consignee s and Shipper s Loss analyses is greater than three-tenths of one percent, then the third portion of the Official Sample may be sent to an Official Referee Chemist not previously concerned, and settlement shall be based on the Official Referee Chemist s analysis. The fee for this work shall be charged to the account of the party against whom the decision results. The Consignee shall inform the Shipper of his analysis within ten (10) working days after receipt of official sample by the Consignee. The Shipper shall have three (3) working days after receipt of the Consignee s analysis to reject this analysis. In the event that the Consignee does not furnish the Shipper with analytical determination of Loss on the Consignee s portion of the Official Sample within thirty (30) days after the shipment of each unit, as determined by the date of the bill of lading for that unit, then settlement for that unit will be made on the basis of the analysis of the Shipper s

18 portion of the Official Sample only. Rule 9. Adjustment for loss in Corn Oil: Shipper shall pay Consignee for loss at the rate of 1.0% of the contract price for each 1.0% loss above 5.5% calculated on the official net weight of crude. Where the crude oil delivered analyzes with a loss under 5.5% the Consignee will credit the Shipper at the rate of 1.0% of the contract price for each 1.0% under 5.5% up to a maximum credit of 5.5% of the contract price, calculated on the official net weight of the crude. Loss is to be figured fractionally throughout. If the shipper does not intend to have an analytical determination made on his portion of the Official Sample, this fact must be shown on the invoice, and in such an event, the Consignee s analytical determination shall govern settlement. Rule 9A. Adjustment for Free Fatty Acid -Canola Oil Allowance for oils with excess Free Fatty Acid content shall be as follows: Free Fatty Acid Analysis Allowance PCT 0.5 PCT of contract price PCT 1.0 PCT of contract price above 1.50 PCT subject to rejection

19 Rule 10. Adjustment for settlings: Settlings or sludge shall be considered the solid residue which cannot be drained, pumped, or squeegeed form the car. Settlings claims may be filed only on tank cars that are unloaded within five (5) days after arrival of tank car at Buyer s destination. If settlings are found when the tank car is being unloaded, the Shipper shall be notified by telegraph or telephone, and shall have the right to inspect the car, if he so informs Consignee within twenty-four hours (24) of such notification. For 8,000 gallon tank cars a tolerance of 150 pounds of settlings will be allowed. If a car contains more than 150 pounds an allowance will be made for the total amount of sludge up to 1,000 pounds at 50% of the contract price. Settlings in excess of 1,000 pounds will be allowed for at the contract price. For 20,000 gallon jumbo tank cars a tolerance of 375 pounds of settlings will be allowed. If a car contains more than 375 pounds, an allowance will be made for the total amount of sludge up to 2,500 pounds at 50% of the contract price. Settlings present in excess of 2,500 pounds will be allowed for at the contract price. Settlings claims shall be filed as soon as possible. If Consignee does not define his settlings claims with supporting documents to the Shipper within sixty (60) days after the shipment of each unit, the settlement claim for settlings shall be null and void. The claim for the amount of settlings shall not exceed the difference between the invoiced weight, if official, and the weight of oil unloaded at destination. Consignee must substantiate his claim for settlings, with an official weight

20 certificate showing the gross weight of the car, and either a) the tare weight of the unloaded car, both before and after removal of settlings from the car, or b) the net weight of the settlings which have been removed from the car into containers. Rule 10A. Adjustment for Chlorophyll and Phosphorus content Canola Oil Chlorophyll Allowance parts per million 2.0% of contract price above 50 parts per million subject to rejection Phosphorus Parts Per Million Allowance (Percentage of Contract Price) Crude Degummed Crude Super Degummed % %

21 2.2% % 2.4% % 2.6% % 2.8% Above 300 Subject to rejection Subject to rejection Rule 11. Adjustment for insoluble impurities in Corn Oil: A deduction for insoluble impurities in excess of 0.5% up to a maximum of 0.8% shall be allowed at contract price. The shipper shall credit the consignee at the rate of 0.1% of the contract price for each 0.1% in excess of 0.5% calculated on the net weight of the crude. Rule 11A. Adjustments for M & I Canola Oil Moisture and Impurities Allowance

22 Crude Degummed and Crude Super Degummed % 0.5% of contract price % 1.0% of contract price Above.50% Subject to rejection Crude % 0.5% of contract price % 1.0% of contract price Above.70% Subject to rejection Rule 12. Rejection procedure: If Consignee and Shipper cannot agree on a proper allowance on oil that is rejectable, the rejection and replacement procedure shall be as follows: Rejection is to be made by telegram, telex or telecopier within 72 hours after delivery of the oil to Consignee s plant. Shipper shall tender replacement shipment within 24 hours after receiving Consignee s telegram, telex or telecopier, or as soon as Consignee s tank cars arrive for loading at Shipper s plant. Return To Menu Quantity Section Text

23 Rule 13. Unit of weight: Domestic and Imported Vegetable Oils shall be sold on a net weight basis in pounds. The unit weight is the avoirdupois pound (16 ounces). Rule 14. Unit of sale: The unit of sale may, by mutual agreement between Buyer and Seller at time of sale, be the tank car, jumbo tank car, tank truck, drum or barrel. If sale is made in containers, the approximate weight of the containers in net pounds shall be specified. The following container net weights in pounds will be considered as standard unless Buyer and Seller mutually agree on some other figure at time of sale. 8,000 gallon tank car (Standard) 61,000 lbs. approximate* 20,000 gallon tank car (Jumbo) 152,500 lbs. approximate** Tank Truck ( Size varies ) State approximate weight Steel Drum 420 lbs. approximate 23,000 gallon tank car (Super Jumbo) -175,375 lbs. approximate*** * The 8,000 gallon tank car with a capacity of approximately 61,000 pounds shall be considered as Standard with a tolerance of 900 pounds allowed, making 60,100 pounds the lower limit and 61,900 pounds the upper limit. ** The 70,000-gallon tank car with a capacity of approximately 152,500 pounds shall be considered as a Jumbo with tolerance

24 of 2,250 pounds allowed, making 150,500 pounds the lower limit and 154,750 pounds the upper limit. *** The 23,000 tank car with a capacity of approximately 175,375 pounds shall be considered as a Super Jumbo with tolerance of 2,625 pounds allowed, making 172,750 pounds the lower limit and 178,000 pounds the upper limit. Rule 14A. On shipments in 8,000 gallon tank cars (Standard) shipments exceeding 61,900 pounds and up to 63,000 pounds will constitute good delivery, but excess of entire amount over 61,900 pounds shall be billed at the market at time of shipment. Deliveries under 60,100 pounds will not constitute good delivery unless consented to by Buyer. The buyer may at his option bill the Seller for the amount under 60,100 pounds at the difference between contract price and the market price at time of shipment as determined by official weights. If the Buyer furnishes a tank car of insufficient capacity, the Seller may either reject the tank car as being inadequate for loading, or may accept and load the tank car, and settle for the difference in weights between the contract price and the market price at time of shipment. Rule 14B. On shipments in 20,000 gallon tank cars (Jumbo) shipments exceeding154,750 pounds and up to 155,000 pounds will constitute good delivery, but excess of entire amount over 154,750 pounds shall be billed at the market price at time of shipment. Deliveries under 150,000 pounds will not constitute good delivery unless consented by Buyer. The Buyer may at his

25 option bill the Seller for the amount under 150,250 pounds at the difference between contract price and the market price at time of shipment as determined by official weights. Rule 14C. On shipments in 23,000 gallon tank cars (Super Jumbo) shipments exceeding 178,000 pounds and up to 178,500 pounds will constitute good delivery, but excess of entire amount over 178,000 pounds shall be billed at the market price at time of shipment. Deliveries under 172,750 pounds will not constitute good delivery unless consented to by the Buyer. The Buyer may at his option bill the Seller for the amount under 172,750 pounds at the difference between contract price and the market price at time of shipment as determined by official weights. Rule 14D. On shipments in barges in the absence of a clearly stipulated applicable tolerance in the statement of the quantity traded, it shall be understood that 2% more or 2% less than the quantity shall apply at contract price. A total tolerance of 5% more or less than the quantity shall be permissible in the fulfillment of the contract. But if the quantity delivered is in excess of 2% more or less, the excess or underage up to 5% shall be settled basis the market closing price on the first business day following the discharge. Should the quantity shipped differ in excess of 5% more or 5% less from the contract quantity, Seller shall tender such barges to Buyer within two business days of bill of lading date. Excess or under fill of 5% more or 5% less of contract tonnage, will be settled between the Buyer and Seller within three business days of bill of lading date.

26 Rule 14E. As to free time Buyer shall be allowed 36 hours free time after arrival of barges at destination. Thereafter demurrage shall be charged to Buyer per running hour, at the prevailing rate, Saturdays, Sundays, holidays included. Free time shall be counted from the time the barge line, or its representative gives notice to Buyer, or his representative, that the barge is ready for delivery. Rule 15. Contracts shall be completed by delivering the approximate number of pounds in such containers, as Buyer shall specify at time of shipment. Unless Buyer arranges with Seller in advance of last shipment of contract to purchase an additional quantity to fill out a carload, the overage necessitated by car capacity will be invoiced at the market price on date last car is shipped. The Seller shall not be compelled to ship in Buyer s tank trucks more than the contract quantity. It shall be the Seller s option whether to ship excess oil over the contract quantity to fill to capacity a Buyer s final tank truck or to reject the tank truck. If excess oil is shipped, it shall be invoiced at the market price on the date of shipment. Buyer shall be liable for excess freight on capacity weight of tank truck in the event Buyer instructs Seller to load final tank truck light. Rule 16. If tank cars, tank trucks or carloads of containers are not loaded to capacity as required by railroad or trucking regulations, the Seller shall be liable for excess freight on capacity weight, unless Seller shall have fist obtained Buyer s permission to ship tank cars or tank trucks light weight.

27 Rule 17. When tank trucks are used for all or any portion of contract quantity not shipped by tank cars, a tolerance of 1% of contracted weights, based on 152,500 pound tank car units exactly, shall constitute good delivery. However, overage or underage of exact total tank truck weights shipped, as determined by official weights, shall be settled at the difference between the contract price and the market price on date of last shipment. Return To Menu Changes and Taxes Section Text Rule 18. In the event that delivery is taken in a different container than specified in contract, the Seller s container differentials prevailing on date of change of specifications shall apply in determining the invoice price of a specific delivery against contract. Rule 19. In the event that Buyer takes delivery of refined oils against a contract written on a crude basis, the Seller s differentials on refined oils prevailing on date of change of specifications shall apply in determining the invoice price of a specific delivery against contract. Rule 20. In the event that contract is drawn on a carload basis for direct shipment from plant, and Buyer elects to take delivery in L.C.L. quantities, the Seller s L.C.L. or warehouse differential over carload on date on specifications shall apply in determining the invoice price of specific delivery against contract. Any additional transportation costs

28 are for the account of buyer. Rule 21. If Buyer requests shipment to other points than the delivery point specified in the contract, any increase or decrease in Seller s cost is for the account of Buyer. Rule 22. Any taxes now or hereafter imposed by the United States Government or by any taxing body upon the manufacture, sale, transportation and/ or use of Imported and Domestic Vegetable Oils are for the account of Buyer. Return To Menu Terms Section Text Rule 23. Unless otherwise specified at the time of sale, terms of payment on Crude Corn Oil are to be net cash-sight draft, bill of lading attached. All settlement adjustments are due immediately upon agreement on basis of settlement between final Buyer and original Seller. Rule 24. Seller reserves the right to restrict the terms of payment if, in his judgment, the financial responsibility of the Buyer does not warrant shipment on terms originally stated in the contract. Rule 25. Failure to accept delivery of or pay for a specified quantity of Imported and Domestic Vegetable Oils covered by

29 contract shall at Seller s option release Seller from making further deliveries. In case of default in payment when due, the whole sum owed by Buyer shall become due at once. Rule 26. On multiple billing and/or composite sampling multiple billing and invoicing of tank cars or tank trucks and/or composite sampling shall be determined by mutual agreement between Shipper and Consignee and, when so determined, shall apply to settlements with all intervening buyers, if any. Return To Menu Time of Shipment Section Text Rule 27. Unless the exact shipping date is agreed upon by the Buyer and Seller at time of sale, shipments or forwardings for nearby positions shall be interpreted as follows: in the case of shipments, starting from the date shipping instructions are received by Seller; in the case of forwardings, starting from the date of the trade: Quick shipment, or forwarding Within 2 working days Immediate shipment, or forwarding Within 5 working days Prompt shipment, or forwarding Within 10 working days Scattered shipment, or forwarding Spread uniformly over contract period.

30 Rule 28. On contracts covering specific quantities for shipment during a specified period, shipment is to be made during the month, or months, specified in the contract. However, if the last day of contract period occurs on Saturday, Sunday, or legal holiday, the Seller shall not be deemed in default under these trading rules by reason thereof, if the original bill of lading at the point of origin is dated the next business day. Rule 29. The date of the bill of lading shall be considered as the date of shipment, or forwarding. Return To Menu Performance of Contract at Time of Shipment Section Text Rule 30. The Buyer shall furnish delivery instruction for shipment, and tank cars in case Buyer s tank cars are specified, to Seller in ample time to enable Seller to execute order within the period or periods specified in the contract. The Seller shall furnish the Buyer loading schedule and point of shipment no later than the mid-point of the shipping period, in order to enable Buyer to have Buyer s tank cars at shipping point within period or periods specified in the contract. Under no circumstances shall the Seller be either expected or required to make physical tender of all or any part of the oil covered by any specific contract for any specified delivery unless Buyer has first furnished written instructions or furnished tank cars for shipment as provided herein. Failure of the Buyer to supply written shipping instructions shall not relieve Seller of the responsibility of

31 performance under the contract unless Buyer fails to supply shipping instructions within three (3) working days after Seller s request made by notice given in any manner permitted by Rule 55. Rule 31. If Buyer fails to provide shipping instructions or fails to accept shipment within the period indicated, as called for in Section 30, and unless Buyer and Seller can agree upon an extension, then Seller has the right to: (1) ship the undelivered oil to the Buyer within 5 days after giving notice in any manner permitted by Rule 55; (2) sell the oil in the open market for Buyer s account; or (3) dispose of the contract by any other legal method. The Seller shall notify the Buyer at least one (1) working day before expiration of the shipping period of the Seller is unable to make shipment. Unless Buyer and Seller can agree upon an extension, then Buyer has the right to: (1) cancel the contract, or (2) sell the oil in the open market for Seller s account within 5 days after giving notice in any manner permitted by Rule 55. Rule 32. Failure on the part of Seller due to uncontrollable circumstances to deliver any installment of Imported and Domestic Vegetable Oils shall not be a breach of the entire contract. Rule 33. After expiration of contract period, the Buyer may not refuse to accept delivery of oil after shipment has been made unless he previously notified the Seller of his intention to cancel contract if shipment has not been made by a particular working day subsequent to the date of his notification.

32 Return To Menu Weight Section Text Rule 34. Seller s official weights are to govern settlement. Seller shall furnish certified copy of official weights at point of origin on shipments in tank cars and tank trucks. If Seller cannot furnish official weights at point of origin on net contents of tank cars and tank trucks either by means of inside tank scales, track scales or truck scales (gross, tare and net, if track or truck scale weights), Buyer shall have the right to have official weights taken at point of destination which weights shall govern. In no case shall railroad or marked tare weighing be considered as official weights. Cost of obtaining official weights shall be for the account of the Seller. Weights shall be considered official when weighing is done by a State Weighmaster, Board of Trade, Chamber of Commerce, or other recognized public or sworn weighmaster. Rule 35. On weight claims whenever a sale is made F.O.B. Buyers destination, no allowance for shortage or damage will be made by Seller unless Buyer furnishes complete evidence, including railroad inspection report, so as to enable Seller to present complete claim to the carrier. Weight claims are to be filed as soon as possible but not later than fifteen (15) days from tank car unloading date. Rule 36. On variation in shipping and destination weights if the gross weight obtained at destination indicates a

33 discrepancy in the official weights as supplied by the shipper, and inspection shows no indication of leakage in transit, then either party shall have the right to have the tank car reweighed in the presence of representatives of both Buyer and Seller, and the weights so determined shall be used for settlement. Scales to be used for reweighing must be in good working order as supported by certificate of recent examination by authorized examiner. If such certificate is not available, the scale must be tested in the presence of a representative of Buyer and Seller before the car is reweighed. Cost of such weighing shall be for party requesting destination weights, unless the weights taken at destination indicate a discrepancy in excess of 1% of the original invoice weight, in which case the fee for this work shall be charged to the account of party against whom the decision results. The Buyer shall report the discrepancy to the Seller within two (2) working days from date of receipt of car at Buyer s plant, and the Seller shall have two (2) working days after receipt of telegram, telex or telecopy in which to advise the Buyer what action he elects to take. If Seller elects to witness weighing of car, three (3) additional working days will be allowed for such action. In the absence of instructions form Seller, Buyer may proceed with obtaining official destination weights on the tank car, taken in the presence of a disinterested party, which weights will govern settlement. Rule 37. So that Consignee can comply with Rule 36, the Shipper shall immediately, after loading or weighing tank cars, forward a copy of the weight certificate, bill of lading, or invoice to Consignee s receiving plant. Return To Menu

34 Freight Rates Section Text Rule 38. Unless otherwise stipulated at time of sale, delivered prices specified in contract are based on freight rates in effect on date of sale, and any increase or decrease in freight rates is for account of Buyer. In the case of barges sold to specific destinations, the contract price shall not be affected by any subsequent increase or decrease in the freight rate. Return To Menu Routing Section Text Rule 39. When Buyer furnishes tank cars, Buyer shall have the right to specify routing, providing such routing does not involve additional freight expense to the Seller over the lowest rate. Rule 40. When Seller furnishes tank cars, Seller shall have the right to specify routing, with the exception of delivering carrier, which shall be at the option of the Buyer. Rule 41. On shipment of barrels or drums, Seller shall have the right to specify routing with exception of delivering carrier, which shall be at the option of the Buyer.

35 Return To Menu Tank Cars and/or Tank Trucks Section Text Rule 42. At time of sale it shall be specified whether Buyer s or Seller s tank cars are to be used. If there is failure, then it is understood Buyer s tanks are to be provided. Rule 43. All tank cars furnished either by the Seller or the Buyer must be provided with steam coils and the necessary appliances for their ready loading and unloading in all kinds of weather. Rule 44. All tank cars or tank trucks must be inspected by Seller before loading as to cleanliness, condition of steam coils, cap, dome cover and valve, and must be sealed at the dome and the outlet valve when so equipped before being shipped. Seller shall inspect Buyer s tank cars or tank trucks before loading and if found unsatisfactory, notify Buyer by telegram, telex or telecopier. In the event that tank trucks cannot be effectively inspected, they shall not be loaded until buyer has been notified by telegram, telex or telecopier, and specifically authorizes such loading. Buyer shall have the option of replacing the tank cars or tank trucks. In case of tank cars or tank trucks, which can be effectively inspected, Buyer may request Seller to clean the tank cars or tank trucks at Buyer s expense, or Buyer shall accept responsibility for the condition of the oil. Any necessary cleaning and repairing shall be performed at the expense of the Buyer on the basis of actual cost. Failure by Shipper to observe the foregoing shall constitute negligence on his part, and shall relieve Buyer of

36 responsibility for any and all loss or damage resulting there from. If a loaded Seller s tank car or tank truck is delivered to Buyer in a faulty condition, immediate request must be made by Buyer for inspection by Seller. Seller shall thereupon either make such inspection or arrange with Buyer to correct such faulty condition, the Seller being liable only to the extent of the expense incurred in correcting it. Rule 45. Buyer and Seller shall not divert or reconsign tank cars without mutual consent. Any expense incidental to consignment or diversion is for the account of the party responsible. Rule 46. Buyer agrees to empty Seller s tank cars promptly upon arrival and to return same empty as per Seller s instructions. Forty-eight (48) hours free time will be allowed for unloading, unless railroad rules permit longer periods at specific export points under export bill of lading. Standard railroad straight demurrage regulations will define when penalty charge for car detention starts. Charges thereafter will be at $4.00 per day for the first four (4) days and $8.00 per day thereafter. For 20,000 gallon jumbo tank cars the penalty charge for car detention shall be $10.00 per day thereafter. Average agreement demurrage rules shall not apply. These penalties are independent of any demurrage due the railroad by the Buyer. In the absence of instructions for return routing, Buyer shall wire Seller for same, and, in case of delayed answer, demurrage and delay shall be for Seller s account. Buyer cannot be held responsible for failure of carrier to set cars as ordered. Seller agrees to load Buyer s tank cars promptly upon arrival, provided cars have not been received at Seller s plant prior

37 to scheduled loading dates. Forty-eight (48) hours free time will be allowed for loading after scheduled loading dates. Standard railroad demurrage rates shall be paid by Seller to Buyer as penalty for delay in loading tank cars. This penalty is independent of any demurrage due the railroad by the Seller. Seller cannot be held responsible for failure of carrier to set cars as ordered. Return To Menu Commision or Brokerage Section Text Rule 47. Unless otherwise specifically agreed at the time of sale, the Seller shall pay selling commission or brokerage to agent or broker consummating sale. The selling commission is understood to have been earned when Seller accepts contract of sale, even though actual delivery is never made. Commission will not be earned or paid when shipment is prevented by an act of the U.S. Government. Commission or brokerage shall not be considered due until delivery has been made, or contract is otherwise disposed of. Return To Menu Arbitration

38 Section Text Rule 48. All controversies arising out of contracts made under these Trading Rules or the Breach thereof, unless amicably adjusted otherwise, shall be settled by arbitration in accordance with the Rules, then obtaining, of the American Fats and Oils Association, Inc., and judgment upon the award rendered may be entered in the highest court of the forum, state or federal, having jurisdiction. Return To Menu Contingencies Section Text Rule 49. If in consequence of any act of God, fire, flood, wind, explosion, war, embargo, civil commotion, sabotage, law, an act of the government, or because of labor difficulties, the Seller shall be unable to ship or the buyer receive any Imported and Domestic Vegetable Oils to be shipped under a contract existing between them, and of the disabled party delivers notice to the other of that fact within two (2) days and, further, furnishes proof thereof within five (5) days of receipt of the other s request, provided such request shall be made within a week after receipt of notice of disability, the parties shall have rights and duties as follows.: The disabled party may defer shipments until the disability ceases, but not for more than thirty (30) days after the disability occurred. If at the end of the deferred period the parties to the contract have not arrived at an agreement, and a request for

39 arbitration has not been filed by either party, and the disabled party has not delivered notice that the disability has ceased, the party not disabled may cancel the contract, and the difference between the contract price and the market price at the close of business on the day the deferred period terminates shall be paid by the Buyer to the Seller if the market price is lower, and by the Seller to the Buyer if the market price is higher, whether the Seller or Buyer is the disabled party. If the parties do not agree that the contingency has or will delay the execution of the contract, then the matter shall be arbitrated in accordance with Rule 48 of these Trading Rules by either party filing submission of the matter with the Clerk of the Tribunal of the American Arbitration Association having jurisdiction. If neither party files a submission for the arbitration within sixty (60) days from the date the contingency occurs, both parties shall be barred from recovering damages from the other. The foregoing rule shall not apply in cases of shipments delivered to a carrier prior to the receipt of notice of the disabling event. Return To Menu Default Section Text Rule 50. Should either the seller or the buyer fail to fulfill the requirements of any term of the contract the party so failing shall be considered in default. Should the seller be in default the buyer shall have the right to buy in the open market goods of the kinds, quality and

40 description specified in the defaulted contract. Such right, if exercised, shall be exercised not later than the close of the seventh calendar day after the buyer becomes aware of the default, provided that the buyer shall have given prior notice in any manner permitted by Rule 55. The seller shall reimburse the buyer in the amount of any direct market loss. Should the seller be dissatisfied with the price of the covering purchase or if the buyer s right to cover the defaulted contract is not exercised as provided in the rules, then the matter of any damages shall be settled by arbitration. Damages shall be measured by difference between the contract price and the fair market value of the contract commodity on the day the defaulted contract is covered, plus freight, insurance and other costs to the extent applicable. Should the buyer be in default the seller shall have the right to sell in the open market goods of the kinds, quality and description specified in the defaulted contract. Such right, if exercised, shall be exercised not later than the close of the seventh calendar day after the seller becomes aware of the default, provided that the seller shall have given prior notice in any manner permitted by Rule 55. The buyer shall reimburse the seller in the amount of any direct market loss. Should the buyer be dissatisfied with the price of the covering sale or if the seller s right to cover the defaulted contract is not exercised as provided in these rules, then the matter of any damages shall be settled by arbitration. Damages shall be measured by the difference between the contract price and the fair market value of the contract commodity on the day of the defaulted contract is covered, plus freight, insurance and other costs to the extent applicable. If for any reason sale of the defaulted merchandise should prove to be impossible then the seller shall be fully reimbursed for the value of such merchandise plus any and all expenses incurred as a result of the buyer s default.

41 Rule 51. Should either party to a contract suspend payments, admit bankruptcy or commit an act of insolvency, the other party need not await maturity of the contract or any unfulfilled portion thereof in order to take appropriate action, and under these circumstances, after giving one business day s notice by telegram, telex or telecopier may resell or repurchase an appropriate quantity of the contract material and thereupon earn the right to recover any direct market loss incurred. Rule 52. Washout(s), Closeout(s), or default(s) shall be of contract quantity without regard to tolerance specified in the contract or in these rules. If a minimum and maximum quantity be provided, the mean thereof shall govern. Rule 53. Payment of settlement on washouts shall be effected within 15 calendar days after the last day of the contract period by telegraphic transfer of funds to the account designated by seller either in the contract or by telegram, telex or telecopier notice to buyer. Return To Menu Force Majeure Section Text Rule 54. In the event of war, hostilities or blockade preventing shipment during the contract period, the contract

42 or any unfulfilled portion thereof shall be canceled. Should shipment be delayed by fire, strike, lockout, riot, revolution, prohibition to export or any executive or legislative act done by or on behalf of the government of the territory where the port or ports of shipment or destination named in the contract, is or are situated, or by any cause comprehended in the term force majeure other than the reasons given in the preceding paragraph hereof then the time of shipment shall be extended by thirty calendar days after the termination of the occasion preventing shipment, but not more than sixty calendar days from the end of the original contractual shipping period. Should shipment not be possible within these sixty calendar days, the contract shall be canceled, with no liability on the part of either party to the other. Rule 55. All notices to be given in any manner permitted by these rules shall be given in writing by any means reasonably calculated to reach the party entitled to receive the notice within any applicable time limits. A written notice which does not require the creation of a tangible copy, such as a notice sent by , shall be valid notice under this rule. Each party in a chain of parties to the purchase and sale of a single shipment of goods who receives a notice in any manner permitted by this rule shall forward that notice (or give appropriate comparable notice) to his buyer or seller (as the case may be) by any means permitted by this rule. Any notice received by a party after 4:00 P.M. in the time zone of the address to which the notice was sent shall be conclusively presumed to have been received on the following business day. Notice from a broker given on behalf of its principal in any manner permitted by this rule and any other applicable rule shall be valid under this contract as if given directly by the principal.