Sweet deal: Pakistan plans sale of cheap sugar to Tajikistan

ECC eases ban to pave the way for export of 30,000 tons at $597.90 per ton.

Zafar Bhutta August 11, 2012


The government has decided to strike a deal with Tajikistan for export of sugar from the reserves of Trading Corporation of Pakistan (TCP) at $597.90 per ton, a price which is less than the rate prevailing in the international market.

The decision came after the Tajikistan prime minister sent a letter to Pakistan’s premier, expressing the desire to purchase 30,000 tons of sugar in a government-to-government deal, documents show.

The Economic Coordination Committee (ECC) of the cabinet, in a meeting held on August 7, considered the request and eased the ban on sugar export to pave the way for an agreement with Tajikistan on sale of 30,000 tons. The restriction on export had been in place since 2009.

As a goodwill gesture, the committee approved a price of $597.90 per ton, which was about $20 per ton lower than the price in the international market these days. However, the export price was better than rates in the domestic market.

During the meeting, the Ministry of Industries told the ECC that in the domestic market sugar was being sold for $535.50 (Rs50,510) per ton while in the international market the price stood at $617.90 (Rs58,336) per ton. The ministry proposed a price of $597.90 (Rs56,448) per ton for export to Tajikistan with a discount of $20 (Rs1,888) per ton. However, Tajikistan will bear the entire transportation cost.

In a summary submitted with the ECC, the ministry recalled that a meeting, held on July 16, discussed the proposal of sugar export to Tajikistan on a government-to-government basis. All stakeholders, who were present during the deliberations, supported the export programme.

“Therefore, the ban on export should be relaxed in order to export 30,000 tons of sugar to Tajikistan on a government-to-government basis from the reserves of Trading Corporation of Pakistan (TCP) at price differential of $20 per ton from the international market as a gesture of goodwill,” said the summary.

According to estimates of the ministry, the TCP will have sugar reserves of 332,057 tons on December 1 this year and 2.71 million tons will be available in the domestic market with the arrival of fresh production.

“Total stocks at hand will be 3.04 million tons, which will be sufficient to meet the country’s requirements until April 8, 2013,” it said, adding the country’s consumption stood at 350,000 tons per month.

Later, agreeing with the ministry’s plan, the ECC gave the go-ahead for export of 30,000 tons of sugar to Tajikistan at $597.90 per ton.

Published in The Express Tribune, August 11th, 2012.