NA body allows sugar mills to violate lower priced sale contracts with TCP

[Naveed Yaseen]

Mills allowed to import 350,000 metric tons raw sugar, National Assembly body told
ZAHEER ABBASI
ISLAMABAD (September 09 2009): The government has allowed sugar mills to import 3,50,000 metric tons raw sugar for the next season and also decided to change the criteria of purchasing sugar from the local industry after the mills refused to release the stocks to Trading Corporation of Pakistan (TCP) during the recent crisis.

Secretary Ministry of Commerce Salman Ghani told National Assembly's Standing Committee on Commerce that as per new criteria the mill owners would have to pay not the contract price but the actual price of sugar prevailing in the market at the time of violation of contract as well as 25 percent penalty.

Salman informed the committee that the ministry had been directed to maintain one million metric tons sugar as buffer stock. The sugar would be imported as and when the money would be provided, he said saying the price of per kg sugar in the next season would be not less than Rs 50 due to increase in support price of sugarcane.

Chairman TCP Saeed Khan said that the corporation would have stock of over 2, 35,723 metric tons sugar by September 30 with the arrival of 75,000 metric tons. Giving details of 2,00,000 metric tons sugar, he said that the Ministry of Commerce forwarded the decision of the Cabinet dated 03-02-2009 directing TCP to import two lakh MT of refined sugar and to initiate import process through staggered in manageable tender size.

He said that TCP was also directed to release one lakh MT sugar to Utility Store Corporation of Pakistan at Rs 38 per kg. He said that to meet the target for purchase of two lakh MT sugar, as directed by Economic Co-ordination Committee (ECC), tenders has so far been floated four 200,000 Mt of sugar. He said that 83,283 MT of sugar have already arrived in the country while will arrive by 07-10-2009.

Saeed said while the arrangements for purchase of 50,000 MT was in process, a letter dated May 18, 2009 from Ministry of Industries & Production was received informing that sufficient domestic stocks were available in the country, therefore, the import of sugar was not warranted at least till July 2009. Subsequently, the Ministry of Commerce vide their letter dated May 19, 2009 directed TCP to suspend further import of sugar including 50,000 MT for which the tender was being opened on May 30, 2009. This letter was received on 01-06-2009.

He said that TCP was facing problem in dispatching sugar to Sindh and Balochistan after the administrative measures taken by the Punjab government. Secretary Commerce said that the TCP has implemented the ECC decision and placed import orders for two lakh metric tons sugar and fulfilled its responsibility. He said that the Ministry has nothing to do with the local price its sole responsibility is to import sugar to maintain a responsible level of buffer stock.

The meeting was chaired by the Engineer Khurram Dastgir Khan. Kashmala Tariq questioned as to where the stock of 67 sugar mills was going when the TCP said that they have been purchasing sugar from 13 mills. She wanted details to be presented before the Committee regarding the stocks of all the 80 mills in the country.

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