Passco told to cancel mong sale tender

The government on Tuesday directed Pakistan Agricultural Storage and Services Corporation (Passco) to cancel its tender for 28,000 tons mong (daal) to offload in the open market through private sector, and start working to prepare a summary to table before the Economic Co-ordination Committee (ECC) of the Cabinet seeking approval for its export due to its higher price in the international market.
Sources told Business Recorder that Passco had opened tender to dispose of 28,000 tons surplus mong, and the highest negotiated bid was Rs 28 per kg. This was the lowest price against the cost of mong procurement that Passco was bearing.
Sources said that Passco had to bear cost of mong procurement at Rs 38 per kg and if Passco disposes of the surplus mong to the private sector that would offload it in the market, the government would have to bear the cost of Rs 28 million from the exchequer.
The price of mong in open market is Rs 33 per kg, and sources were of the view that its price in international market was Rs 45 per kg. They noted that China had exported mong at Rs 45 per kg and Pakistan could earn valuable foreign exchange by exporting surplus mong lying with Passco.
Earlier, the Utility Stores Corporation (USC) was supposed to lift the surplus stock of mong from Passco at Rs 34.50 per kg that included the cost of bags and bardana. Sources said that USC had refused to take up the surplus stock from the Passco at the agreed price of Rs 34.50 per kg and Passco had to float tender to dispose of the stock. But the private sector was not ready to pay more than Rs 28 per kg and government would have to face cost differential of Rs 28 million on account of disposing of 28,000 tons mong in open market.
The production of mong in Pakistan was 147,500 tons in 2008-09 that is 0.03 percent lower than the corresponding period of last year. The share of Punjab is 127900, Sindh 4600 tons, NWFP 7200 tons and Balochistan 7800 tons in the current financial year. The production of mong was 152700 tons during 2007-08.
Sources in Passco said that private sector had made cartels and had offered rates that were much below the rate prevailing in the open market. They expressed fear that private sector could involve in black marketing after taking the surplus stock of mong that could result in spike in mong prices in the country. They said that private sector was also approaching the concerned authorities to seek permission for export of mong.