Unsold commodity: Stocked rice could cause a loss of millions to PASSCO

Tender issued for the fourth time in attempt to sell piled-up quantity.

LAHORE: In an effort to sell the piled-up stock, the Pakistan Agriculture Storage and Services Corporation (Passco) has issued tenders for the fourth time to dispose of 1,648.75 tons of rice procured in 2008-09.

This came as a result of poor response from its own employees to purchase the quantity at Rs50 per kg, The Express Tribune has learnt.

The corporation would face a huge financial loss if it succeeds in selling the rice at Rs50 per kg in response to the fourth tender, an official close to the development said.

This year, the price of paddy crop in the open market was very low and it was expected that bidders would offer a lower price for the stocked crop as compared to last year, he said.

In the tender that was floated in November-December last year, Passco received the bid of Rs50 per kg with the condition of six-month time to lift the stock.

This offer was rejected by the management, who then gave its employees the offer to purchase the leftover rice at the same price. However, the response was very poor, the official said.

Rice was procured on the direction of the federal government at the rate of Rs75 per kg to help maintain the support price of paddy crop in the open market and protect the farmers from losses, the official said.

According to details, Passco procured 4 million kg of rice from the open market on the instructions of the federal government to bring stability in paddy prices and facilitate the growers.

Out of the total procured quantity, the corporation sold about half in 2009-10 to the bidders at Rs75 per kg. The remaining was stocked at Hadi Rice Mill.

The mill owners submitted a claim of dues regarding the cost of keeping the quantity, but the corporation failed to make these payments, the official said.

In response to the deteriorating condition of the stock, the federal government appointed a new managing director of Passco, Capt (Retd) Tariq Masood, in April last year, giving him the task to dispose of the stock on a priority basis.

The new MD negotiated with the mill owners and lifted the stocked rice and shifted it to the corporation’s warehouse at Manga Mandi in the last week of April.

As a result of keeping the stock, Passco lost millions as the rice that was procured at Rs75 per kg was now being sold at Rs45 per kg, he added.

Published in The Express Tribune, February 21^st, 2015.

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