The Trading Corporation of Pakistan (TCP) has received 56 bids for purchase of 200,000 tons of crystal sugar from local sugar mills which will be sold at the utility stores, official sources told Business Recorder. "We have received 56 bids from sugar mills of which the lowest bid is Rs 46,250 per ton whereas highest bid is Rs 50,000 per ton," the sources added.
The Economic Co-ordination Committee (ECC) of the Cabinet has already given free hand to the TCP to assess the reasonability of sugar price offered by the sugar mills in response to the tender opened on December 23, 2011. The TCP had also been directed to incorporate following necessary amendments in the tender documents as under: (i) all sugar mills are allowed to participate without any conditionality of membership of PSMA; (ii) 100 percent payment will be made to the sugar mills/successful bidders at the time of agreement with TCP; (iii) defaulter sugar mills will be eligible to participate only after they clear their outstanding dues, including penalty; (iv) minimum and maximum quantity to be procured shall be 5,000 MT and 10,000 MT respectively; (v) a benchmark price of Rs 52,500 PMT (upper limit) will be kept in view while making the fresh procurement at source; and (vi) FBR will look into the possibility of issuing one-time exemption from upfront deduction of withholding tax by the TCP.
When contacted, PSMA Chairman Javed Kayani said the government should consider buying and securing maximum quantity out of 441,000 tons offered by asking the bidders to match the lowest price of 46.25 per kg. However the tender was for only 200,000 tons of sugar but keeping in view the international market, the price quoted is the cheapest in the world at present. Kayani said the government must take a pragmatic and business like approach to build its inventory and must avail this opportunity. He added that it would facilitate timely payments to growers during the current crushing season. The ECC had directed TCP that wholesale price may be made the benchmark to judge reasonability of price quoted by the sugar mills.