White sugar import: indecision to open L/C causes $0.75 million loss to kitty

The government''s indecisiveness for opening Letter of Credit (L/C) for import of 50,000 tons white sugar from Dubai caused $0.75 million loss to the national exchequer, sources told Business Recorder.
The responsibility lies either with the Commerce Ministry and Industries Ministry which asked the Trading Corporation of Pakistan (TCP) to go slow on import despite clear directives of the Economic Co-ordination Committee (ECC) of the Cabinet, or State Bank of Pakistan (SBP) which did not open the L/C despite ECC instructions.
On May 23, TCP bought 50,000 tons white sugar from Alkhaleej at $494.40 per ton but the L/C could not be opened at appropriate time. At present, white sugar price is hovering at around $620/630 per ton, which implies a loss of $0.75 million, for which someone must be taken to task, said one senior official. The price of raw sugar is about $550 per ton.
Last month, Economic Co-ordination Committee (ECC) of the Cabinet quizzed top officials of the Ministries of Commerce and Industries for their reported involvement in cancellation or deferment of sugar import tenders. The responsible officials of both ministries sought help of TCP Chairman Saeed Khan to deal with this situation.
Both ministries submitted a detailed report to the ECC in its meeting presided over by Privatisation Minister Naveed Qamar, explaining circumstances/justification for cancellation of the tenders for import of sugar by TCP against the decision of the ECC.
Sources said that when the tender cancellation was brought before the ECC, its Chairman, Naveed Qamar, took very serious note of violation of ECC decisions, saying that bureaucracy would not be allowed to change government decisions administratively.
The ECC, in its meeting in June, had also directed SBP to expedite the opening of Letter of Credit for import of sugar, which was not implemented. The ECC meeting on August 11, presided over by Finance Minister Shaukat Tarin also allowed the TCP to import the balance quantity of 75,000 tons from the approved import of 2,00,000 tons of white sugar.
The ECC, on June 15, 2009 had directed CCP to prepare a presentation on the reported cartelisation by sugar millers, but when it attempted to give presentation in the ECC meeting held under the chairmanship of Privatisation Minister Naveed Qamar, it was not allowed to give the presentation.