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Wheat Flour Monetization

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15<br />

9. Recovery<br />

9.1 Table 9.1 presents the recovery rates for a range of costs per sack.<br />

Sales Price<br />

Table 9.1<br />

Recovery Rate if Purchased at Specific Price (per Sack in US dollars)<br />

Cost<br />

$23.00 $24.00 $25.00 $26.00 $27.00 $28.00 $29.00 $30.00 $31.00<br />

$20.00 86.96% 83.33% 80.00% 76.92% 74.07% 71.43% 68.97% 66.67% 64.52%<br />

$21.00 91.30% 87.50% 84.00% 80.77% 77.78% 75.00% 72.41% 70.00% 67.74%<br />

$22.00 95.65% 91.67% 88.00% 84.62% 81.48% 78.57% 75.86% 73.33% 70.97%<br />

$23.00 100.00% 95.83% 92.00% 88.46% 85.19% 82.14% 79.31% 76.67% 74.19%<br />

$24.00 104.35% 100.00% 96.00% 92.31% 88.89% 85.71% 82.76% 80.00% 77.42%<br />

$25.00 108.70% 104.17% 100.00% 96.15% 92.59% 89.29% 86.21% 83.33% 80.65%<br />

$26.00 113.04% 108.33% 104.00% 100.00% 96.30% 92.86% 89.66% 86.67% 83.87%<br />

$27.00 117.39% 112.50% 108.00% 103.85% 100.00% 96.43% 93.10% 90.00% 87.10%<br />

$28.00 121.74% 116.67% 112.00% 107.69% 103.70% 100.00% 96.55% 93.33% 90.32%<br />

$29.00 126.09% 120.83% 116.00% 111.54% 107.41% 103.57% 100.00% 96.67% 93.55%<br />

$30.00 130.43% 125.00% 120.00% 115.38% 111.11% 107.14% 103.45% 100.00% 96.77%<br />

$31.00 134.78% 129.17% 124.00% 119.23% 114.81% 110.71% 106.90% 103.33% 100.00%<br />

$32.00 139.13% 133.33% 128.00% 123.08% 118.52% 114.29% 110.34% 106.67% 103.23%<br />

$33.00 143.48% 137.50% 132.00% 126.92% 122.22% 117.86% 113.79% 110.00% 106.45%<br />

$34.00 147.83% 141.67% 136.00% 134.62% 125.93% 121.43% 117.24% 113.33% 109.68%<br />

$35.00 152.17% 145.83% 140.00% 134.62% 129.63% 125.00% 120.69% 116.67% 112.90%<br />

$36.00 156.52% 150.00% 144.00% 138.46% 133.33% 128.57% 124.14% 120.00% 116.13%<br />

$37.00 160.87% 154.17% 148.00% 142.31% 137.04% 132.14% 127.59% 123.33% 119.35%<br />

$38.00 165.22% 158.33% 152.00% 146.15% 140.74% 135.71% 131.03% 126.67% 122.58%<br />

$39.00 169.57% 162.50% 156.00% 150.00% 144.44% 139.29% 134.48% 130.00% 125.81%<br />

$40.00 173.91% 166.67% 160.00% 153.85% 148.15% 142.86% 137.93% 133.33% 129.03%<br />

9.2 The problem we will confront with buyers of 10,000 sacks or more is fear<br />

of buying the merchandise and the market price subsequently dropping:<br />

the buyers will make high profits if the market price stays high. But if the<br />

Dominicans or LMH subsequently import a large quantity of wheat flour<br />

and lower the price, then our buyers could lose.<br />

9.3 For example, if the Partners sell wheat flour at near wholesale market<br />

price of US$35 per sack (and take note that FFP guidelines legally oblige<br />

us to sell at near market price; see endnote ii and vi); and if the<br />

Dominicans, LMH, and Miami importers subsequently drop the price to<br />

the pre-quake price of US$28; then WVI buyer of 10,000 sacks, will lose<br />

US$70,000.<br />

15

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