The Economic Co-ordination Committee (ECC) is to witness a serious war of words between Secretary Industries and Production (MoIP), Abdul Ghaffar Soomro and Trading Corporation of Pakistan (TCP) Chairman S Anjum Bashir on Thursday (November 4) over the unprecedented rise in sugar price.
Sugar prices have touched Rs 100 per kg in far-flung areas due to shortage of the commodity in the retail market. The TCP is reluctant to implement the ministerial committee's decision to auction 50,000 tons of white sugar after every 10 days in the open market, which is being termed as the major reason for the increase in prices.
Prime Minister Syed Yousaf Raza Gilani, sources said is annoyed with the MoIP and TCP for their role in the recent hike in sugar prices. According to the minutes of the ministerial committee meeting held on October 26, 2010 under the chairmanship of Minister for MoIP, Mir Hazar Khan Bijarani, it was decided unanimously that 0.25 million tons out of the existing imported sugar stocks with the TCP would be offloaded in tranches of 50,000 tons every 10 days through open auction to the highest bidder till December 15, 2010. Whereas the remaining 0.4 million tons of sugar would be kept as strategic reserves and for USC interventions.
TCP argues that since MoIP issued minutes three days after the meeting, hence the latter is responsible for this sugar mess. On the other hand MoI&P argues that when the high powered committee took a unanimous decision, TCP should have implemented it immediately in letter and spirit.
Secretary Industries who reportedly was criticised by the Prime Minister for sugar mess wrote a letter to Secretary Commerce, Zafar Mahmood, admitting that sugar price is increasing in the market when the new crushing season has already started. According to him, there was consensus at the meeting that increasing trend can be arrested by immediate release of imported sugar in the market to augment supply. Secretary Industries has requested the Secretary Commerce to issue necessary instructions to the TCP for devising the requisite mechanism to implement the decisions of the committee. A copy of the letter was also sent to the TCP Chairman.
According to the documents, the TCP Chairman while referring to the letter of Secretary MoI&P, gave three options for disposal of 50,000 tons of imported sugar which are as follows: (option I) one tender of 50,000 tons after every 10 days with five tenders of 10,000 tons each with minimum quantity of 1,000 tons to be awarded on every alternate day to the highest bidder; (Option II) two tenders of 25,000 tons after every five days with minimum quantity of 2,500 tons to be awarded to the highest bidder; (Option III) tender of 50,000 tons every 10 days with minimum quantity of 5,000 tons to be awarded to the highest bidder.
Sources said the Secretary Commerce and the TCP Chairman met on Wednesday to chalk out joint strategy for the ECC meeting, as there are indications that the Chairman will be taken to task on this issue.
Insiders told this scribe that sugar auction proposal was the brainchild of Pakistan Sugar Mills Association (PSMA) which basically rescued the government from facing an embarrassing situation at Eid-ul-Azha. The government's raw sugar import plan is already in jeopardy after the sugar mill owners refused to import raw sugar at higher rates.
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