Some 48 domestic sugar mills clearly refused to accept Trading Corporation of Pakistan''s (TCP) price matching offer for supply of commodity. Sources told Business Recorder on Tuesday that the poor response from the mills has compelled the state run grain trader to issue another tender to complete the procurement of targeted quantity.
TCP conducted sugar tender on February 19, 2014 for procurement of 75,000 tons commodity and a healthy participation of local sugar mills was witnessed in the tender. Some 49 domestic mills showed interest to sale their sugar stocks to the Corporation. Overall TCP received bids for sale of 236,000 tons sugar as against targeted quantity of 75,000 for this tender, sources said.
Domestic mills submitted bids for different quantities and rates ranging from Rs 47,690/ to Rs 55,000/ per metric ton (including all taxes and levies). Lowest price was offered by M/s Army Welfare Trust, while highest bids were submitted by M/s Chesham Sugar Mill Unit I and Unit II.
As per tender terms & conditions, the bidders were required to quote bids for a minimum quantity of 2,000 tons and a maximum quantity of 5,000 metric tons. As the lowest bid was meeting all the term and conditions of the tender, TCP, on February 21, 2014, accepted its offer and accordingly a contract was awarded to M/s Army Welfare Trust for supply of 5,000 tons sugar at Rs 47,690 per ton.
Meanwhile, following the past practices, TCP also offered price matching to remaining bidders to complete the 75,000 tons procurement. Corporation had given three days to the remaining 48 mills for price matching and they were asked to accept offer till February 24, by responding officially. In response to TCP''s offer, all mills have clearly refused to match the lowest price and not a single sugar mill has shown interest to supply sugar at Rs 47,690 per ton.
As the mills have not accepted price matching offer, TCP can procure 5,000 tons sugar as against targeted quantity of 75,000 tons under the first sugar procurement tender. The mills behaviour has also forced TCP to issue another tender for procurement of remaining quantity of 70,000 tons.
Sources said that TCP has issued a fresh tender for procurement of 70,000 tons sugar from local mills and the second tender will be opened on March 13, 2014. The mills'' refusal will also delay the procurement of sugar and TCP, which has planned to complete the sugar procurement of 150,000 tons in March, will complete its procurement in April 2014. Last month, ECC allowed TCP to procure some 150,000 tons of sugar from domestic mills to maintain its strategic reserves for supply to Utility Stores Corporation (USC). In order to avoid any panic in the market TCP decided to procure sugar through two tenders of 75,000 tons. However, Corporation is unable to make complete procurement of 75,000 tons sugar under first tender.
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