PSMA offer turned down

The government on Monday formally turned down the Pakistan Sugar Mills Association (PSMA) offer for sale of sugar at imported rates, saying "it need not to buy stocks from the open market to stabilise rates and give the benefit to the poor".
A finance ministry official told Business Recorder here, in response to the offer the PSMA has been informed in writing that it should look for some other channels than the government to sell its stocks. Officials said the government reminded the PSMA it has sufficient stocks to cater to the needs of deserving people through the Utility Store Corporation (USC).
The PSMA had offered the government stocks currently available with its members at imported price last week. The PSMA as on May 31 had over 1.1 million tons of sugar in its stocks. He said the TCP has over 0.8 billion tons of sugar (inclusive of buffer stocks) in its possession which can meet USC's requirement for consumers even in the next year.
The TCP is providing USC 22,000 tons of sugar for sale at its outlets. The government has extended the USC network and it may need around 30,000 tons of sugar from the next month. The official was of the view the PSMA offer was basically a tricky move to stop the government from taking action against its members. He added at the time when sugar prices were high, the sugar industry was reaping windfall gains on its stocks and the PSMA was not even ready to provide 10 percent of its stocks to the government for selling through USCs. But, he added, when rates were started coming down, it took a U-turn and offered its full stock at imported commodity rates.
At one point when sugar prices were ranging between Rs43 and Rs44 per kg and the government was facing criticism the President office had moved and it asked the PSMA to supply 10 percent of total sugar production by its members in 2006 to USC at Rs29 per kg. The PSMA did not respond positively for many weeks. After a gap of one and half month it conveyed to authorities that since sugar prices were at all time high it was not possible for its members to sell 10 percent stocks at low prices.
He said the government will not give any concession on cash margin financing to the sugar industry since it was found involved in exploiting the market and hoarding huge stocks.