Following the directives of the Economic Coordination Committee (ECC), the Trading Corporation of Pakistan on Wednesday offloaded 24,800 tons imported sugar in open market to stabilise soaring commodity prices. The ECC on September 21, decided to offload 50,000 tons of imported sugar in the open market to overcome sugar crisis, as provinces had completely failed to sell subsidies imported sugar in domestic market at low rates during Ramazan, following which sugar price hit peak level of Rs 82-84 per kg in retail market.
The state run grain trader issued two sugar tenders of 25,000 tons each during last week and invited bids from wholesalers, retailers and traders. To avoid any speculation and ensure transparency in the tender, the TCP also decided to offload sugar in open market with a minimum lot of 50 tons and maximum 500 tons. First tender was issued on September 27, 2010 and opened on October 4, 2010 in which some 141 parties from Punjab (Lahore, Faisalabad, Multan & Islamabad), Sindh (Karachi, Hyderabad, Sukkur & Kashmore), Balochistan (Quetta) and Khyber Pakhtunkwa (Malakand, Peshawar & Karak) participated.
In the first tender, the TCP received a maximum bid price of Rs 68,500 per ton for a quantity of 500 tons, while the remaining bids were less than this price. However, the TCP tender committee and the executive committee of the board did not adopt price matching formula and decided to sell complete quantity of 25,000 tons to all those bidders who submitted bids above the landed cost. The TCP has sold 24,800 tons of imported sugar through auction in the open market at different prices ranged between Rs 59,060 per ton to Rs 68,500 per ton (excluding 8 percent sales) on ex-godown basis.
The TCP awarded the tender to 58 different parties of all the provinces at a weighted average price of Rs 61,296 per ton at the total cost of Rs 1.520 billion. However, with the auction of imported sugar at a maximum price of Rs 68,500 per ton, a benchmark of Rs 75 per ton was set for the wholesale market, as some 8 percent sales tax is not included in offer price.
"This was the most widespread tender participated by retailers, traders and wholesalers from all over the country and the TCP has adopted a very transparent process to offload sugar in open market," said Anjum Basheer, chairman TCP. He said the TCP has sold sugar above the landed cost and weighted average price is Rs 61,296 per ton, which means the TCP will not face any loss in this auction. He added, "there was only one aim which is to ensure the availability of the commodity in open market, where prices were on increase.
The auctioned sugar would be supplied across the country as some 23 bidders of Sindh, 29 of Punjab, 5 bidders from Khyber Pukhtoonkhwa and one bidder form Balochistan have been awarded tender, he said. This sale would improve the supply position of sugar in the open market, providing relief to the common man, he added. "The second tender of 25,000 tons is scheduled to open today (Thursday) to sell the sugar on the same pattern," Basheer said.
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