ISLAMABAD: Ministry of Industries and Production is going to release Rs3 billion, within the coming two days, to the Trading Corporation of Pakistan (TCP) for opening a Letter of Credit (LC) to import 200,000 tons of sugar for Utility Stores Corporation (USC).
TCP Chairman Anjum Bashir said that the finance division had already issued funds to the Ministry of Commerce and the Ministry of Industries for the commodity financing. “We will open LC for the purchase of sugar for the USC as soon as we are provided the required funds”, he maintained.
Al Khaleej Sugar Co, Dubai had offered the lowest bid of $596.10 a ton for 200,000 tons last month.
Earlier, the Finance Ministry had turned down the demand of the TCP to issue more funds for opening of LCs, with the contention that that it had already issued Rs21 billion, with Rs3.5 billion for the USC, to the Ministry of Commerce and the Ministry of Industries, adding that TCP should manage its affairs from the allocated funds.
A meeting had been called to firstly ascertain the latest stock position of sugar for the current season and the next , secondly, to determine the feasibility of importing raw sugar, in consultation with the sugar millers, and lastly, to suggest measures for involving the private sector in sugar imports.
Sources said that Chairman TCP said that 349,188 MT white sugar has reached the country and 74,000 MT would arrive in September, while 30,000 MT would arrive in October and November.
The Chairman TCP sought funding to open LCs for the remaining tenders but the Finance Ministry refused to release more funds.
The minutes of the meeting stated that the Deputy Chairman Planning Commission observed that the events of the last many days had changed ground realities, and demanded a reassessment of the government’s priorities. He said that the market should be allowed to work freely and be trusted to meet the shortages.
Secretary of Commerce and the secretary of Industries and Production both supported the ongoing effort to procure 1.2 million tons by the government, to complete the sugar import process, as there is a need to stabilise the market and maintain strategic reserves/ buffer stocks, as approved by the National Sugar Policy 2009-10.
The Ministerial Committee in its last meeting held on July 26, recommended that 500,000 tons of raw sugar be imported duty free till 30 November 2010, on a first come first served basis, with a view to start the next crushing season early, and to suitably augment existing stocks in the current season.
The Pakistan Sugar Mills Association (PSMA) representatives explained that at the most 200,000-300,000 MTs of raw sugar may be imported. They argued that TCP was importing 600,000 MT of sugar, which was more than sufficient till December 2010. They said that there was a 15-20 per cent increase in sugarcane crop area, as compared to 2009, but there could be around 5 per cent damage due to floods, which may be offset by high recovery of sugar.
Published in The Express Tribune, September 6th, 2010.