USC making huge profits: black gram being sold at higher price

Pakistan Agriculture Storage and Supplies Corporation (Passco) has started supply of black gram to the Utility Stores Corporation in order to stabilise prices of gram pulse. But, the USC is reportedly making profits of over Rs 280 million by selling the commodity at a high price, it is learnt here on Wednesday.
Senior officials of the USC and Passco revealed that the Passco had started supplying black gram to the USC at Rs 37 per kilogram and so far supplied 5,938 tonnes. The Passco will supply a total of 46,500 tonnes of black gram.
Passco official said that the corporation on the instructions of the federal government had procured black gram from the open market at Rs 30.50 per kilogram as buffer stocks. These buffer stocks were meant to keep the price of gram pulse stable in case hoarders and profiteers manipulate the market by creating supply side distortions.
However, this time the federal government has instructed the Passco to supply black gram to USC rather to sale it into open market through open bidding. After adding the incidentals and mark-up charges into the procurement price, the Passco has been supplying black gram to USC at Rs 37 per kilogram. Official said that after grinding black gram to make gram pulse it cost Rs 43.53 per kilogram to the USC.
He disclosed that after adding the grinding and packaging expenses, gram pulse costs USC Rs 44 per kilogram but it had been selling it for Rs 50 per kilogram. Quoting a meeting of federal ministry of industries, he said that advisor to prime minister for industries also asked the USC that the price of gram pulse should not be more than Rs 45 per kilogram as the USC is getting black gram from the Passco below the market price.
According to estimates, the Passco had supplied 5,938 tonnes black gram to the USC while the USC has earned almost over Rs 30 million from it. On the supply of total 46,500 tonnes black gram, the USC will earn an estimated amount of Rs 280 million.
A senior official of the Passco said that the corporation had paid an indirect subsidy of almost over Rs 420 million to the consumers by supplying black gram to USC below the market price but the USC is looting the people by selling it at higher price. When contacted, Managing Director of USC, Brigadier Hafeez Ahmed (Retd) said that the processing cost of black gram to make gram pulse is 15 percent while transportation cost has also increased due to increase in prices of petroleum products.