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ISLAMABAD: The government has 'silently' allowed private parties to import 0.2 million tons of sugar after the Trading Corporation of Pakistan (TCP) failed to get reasonable prices for the planned 0.3 million tons of sugar import.

According to official sources, on the directives of the federal government, the TCP has now issued fresh tender seeking bids to import 0.1 million tons of sugar as it was forced to scrap the first sugar tender as quoted prices were found to be much higher.

The government tried to import 0.3 million tons of sugar through the TCP but only two parties filed tender, which later on were cancelled.

Later, on September 2, 2020, the TCP again issued tender for the import of only 0.1 million ton of sugar.

In order to control the soaring prices of sugar in the domestic market, the federal government decided to import some 0.3 million tons of sugar.

Accordingly, the TCP was given the task to import sugar on an immediate basis to avoid shortage in the local market.

Following the TCP's failure to get desirable bidding, the commodity prices in local market have reached all time high as even in the twin cities of Rawalpindi/Islamabad sugar is being sold at Rs100 per kg in retail market.

The state-run grain trader, issued on August 8, 2020 international tender for the import of some 0.3 million metric tons of sugar, and the tender was opened on August 18 at the TCP head office.

However, the response from international bidders was very poor due to tender's strict terms and conditions.

Some five bidders participated in the tender and out of these only two parties showed interest in the supply of sugar, while the remaining suppliers submitted regret letters.

The lowest bid was received from Al-Khaleej, which offered to supply sugar at $471 per metric ton for DPO (Delivered at Place Unloaded), $459 per metric ton for bulk and $453 per metric ton for containerized shipment.

The second lowest bid submitted by M/s Coral, which offered to supply sugar at $474 per metric ton in bulk.

Federal Minister for Industries Hammad Azhar has recently announced a number of incentives for sugar import including reduction of sales tax from 17 percent to one percent, reduction of value-added tax from three percent to zero percent and reducing withholding tax rate from 5.5 percent to 0.25 percent for a limited period.

Sources said that the government had asked the private sector to import remaining 0.2 million tons of sugar for which the government had reduced the duties and taxes.

They further stated that sugar import was allowed without documentations assuring non-Indian origin. The private sector has expressed conditional willingness to import the commodity, if no certificate of origin is asked, if exempted Halal certification, no certificate of manufacturer and no bag marking of manufacturer restrictions.

Sources said that the private sector had presented those conditions to the government as they intended to import sugar from India via using Dubai channel as the private sector would import Indian sugar to Dubai, and repacked in Dubai with local traders' name.

The government has sought no guarantee from brokers that they cannot import Indian sugar and no marking of factory on the bag.

Copyright Business Recorder, 2020