Sugar deal with Tajikistan: MoC likely to givego-ahead to TCP to begin export

February 18, 2013

RIZWAN BHATTI

0 Comments

Ministry of Commerce is likely to grant go-ahead signal to Trading Corporation of Pakistan (TCP) for signing of commercial agreement with Tajikistan for export of 30,000 tons of sugar during this week.

Sources told Business Recorder on Sunday that after receiving details of the much awaited sugar export deal from Tajikistan, TCP had approached the ministry to get its nod for signing of the commercial agreement to initiate the export.

In response to TCP's query regarding sugar export procedure, Tajikistan authorities informed that they would import 30,000 tons of sugar from Pakistan in three phases and three different Letter of Credits (LCs) would be opened for the each consignment, they added.

Two weeks back, the TCP while seeking some clarification regarding the commercial agreement sent by the Tajikistan government, asked Tajik authorities for details and schedule of LC opening. In reply, Tajik authorities has made it clear that instead of a single consignment, it will import complete quantity of sugar in three tranches within six months and each consignment will not be more than 10,000 tons of sugar.

As per details sent by Agency on State Material Reserves of Tajikistan, first LC for import of 10,000 tons of sugar would be opened after one week of signing of commercial agreement between Pakistan and Tajikistan, while second LC will be opened after two months of first delivery and third LC for supply of 10,000 tons will be opened after two months of second delivery.

Sources said that Tajikistan has also agreed to import complete quantity of white crystal sugar at a price of $528 per ton, decided in the initial talks held on August 15, 2012 in presence of Minister for Commerce Makhdoom Amin Fahim and Nurmahmad Akhmedov, Chairman Agency on State Material Reserves of Tajikistan.

Previously, Tajikistan was willing to import sugar through Amangarh and it was decided by the two countries that point for delivery for sugar export will be Amangarh, district Nowshera, Khyber Pakhtunkhwa (close to Toorkham border) and TCP will be responsible to deliver the commodity at Amangarh. While, from Amangarh to onward Dushanbe (Tajikistan Border) transportation expanses will be paid by Tajikistan government.

However, now the Tajikistan has fixed Peshawar city as delivery point, where a godown has been acquired by TCP to store the commodity. TCP will be responsible for transportation of commodity from sugar mills to Peshawar, while from Peshawar to onward transportation expanses will be bear by Tajikistan.

As per proposed commercial agreement, Tajikistan is not wiling to import commodity of fresh crop and asked for sugar from last sugar crop ie 2011-2012. TCP sources said that they had sufficient stocks for exports and already allocated some 30,000 tons of sugar from last year crop for Tajikistan, beside this allocation, TCP had an additional quantity of some 50,000 tons in its stocks from last year crop.

They said that all details regarding sugar deal, including proposed commercial agreement sent by Tajikistan, have been forward to ministry for commerce for their point of view and final approval.

"As all matters regarding sugar export to Tajikistan has been almost solved, it is expected that the ministry will grant No Objection Certificate (NOC) for signing of commercial agreement with Tajikistan during this week, after which sugar export will start," sources said. If TCP initiate sugar export, this will be for the first time in the history that the state-run grain trader will be exporting sugar, they added.

In the last week of January 2013, Agency on State Material Reserves of Tajikistan instead of accepting and signing the commercial agreement sent by Pakistan's state run grain trader, sent a new commercial agreement to TCP with some modifications. Tajikistan's new accord has been signed by chairman Agency on State Material Reserves of Tajikistan.

As per the draft Tajikistan's commercial agreement, they are seeking supply in three phases, however, it didn't mention the exit schedule of import and process of LC opening. Therefore, TCP wrote a letter to Tajikistan authorities for clarification of process and schedule of shipment and LC opening, to initiate the export process.

It may be mentioned here that talks for the export of sugar to Tajikistan are in process for the last six months, however, it continued to delay due to some disputes. At the time of initial dialogues it was principally decided by the representatives of both the counties that commercial agreement for sugar export will be finalised in two weeks, however, it was delayed for over five months. Earlier, there was some confusion on transportation expanses and later on variety of sugar. TCP officials said that they had already made arrangements to start sugar export to Tajikistan as transporters were in touch with the Corporation and white crystal sugar was available with the state-run grain trader.