KARACHI: Following the directives of the Economic Co-ordination Committee (ECC) of the Cabinet, the Trading Corporation of Pakistan (TCP) on Thursday scrapped sugar procurement tender and decided to invite bids afresh for purchase of 200,000 tons sugar from local mills. Sources told Business Recorder that another sugar procurement tender has been scrapped on the directives of the ECC, as high prices were quoted in the tender by local sugar mills.
The TCP floated a gallop tender on November 3, 2011 for purchase of sugar from local mills up to 200,000 tons. The tender was opened on November 12, 2011 and as many as 32 parties showed their interest to sell sugar stocks to state run grain trader. The bids received, after two times extension, were valid up to December 14, 2011.
All 32 mills offered the bids for varying quantities at rates ranging from Rs 65,000 to Rs 66,000 per ton. However the quoted prices were much higher than the prevailing market prices. Therefore, following the decision of ECC the corporation has scraped the tender and decided to issue new tender aimed to get fresh bids. Although, earlier it was decided to approach 32 mills for extension of bids' validity and they were agreed to extend the validity, the ECC on Thursday decided to invite new bids ahead of declining trend in the sugar prices.
This was the second tender, which has been scrapped by the TCP. Earlier, on July 13, 2011 the TCP had scrapped sugar purchase tender as not a single bid was received in response the tender for procurement of 50,000 tons of sugar from members of Pakistan Sugar Mills Association. At that time the ECC had fixed a price of Rs 60 per kilogram (excluding taxes) for procurement of sugar from mills.
Meanwhile, the TCP has issued a new and third tender for purchase of carryover stock of sugar mills. Sealed offers have been invited from mills is Pakistan for purchase of 200,000 tons of white sugar packed in polypropylene woven sacks as per PSQCA standards ie 1822-2001 and PS 3128-2008, respectively. However, the TCP has made it clear that sugar mills who defaulted with the TCP are not eligible to participate in the tender unless they clear their dues before tender opening date.
State run grain trader has asked the interested parties to submit their bids in sealed envelops for a quantity of minimum 5,000 tons and maximum 10,000 tons and to be dropped in the tender box placed at TCP office by 11 am by December 23, 2011. The bids will be opened on same day at 11:30 in the TCP's Board Room in the presence of bidders or their authorised representatives, who may wish to participate. Market sources said that currently local sugar mills have some 600,000 tons of carryover stock of the commodity. On the other hand the country has a bumper sugarcane crop of 58 million tons, therefore, it is expected that sugar prices in the local market will further decline in near future. Presently, ready stocks of sugar are being sold at Rs 48 per kilogram ex-mill and after December 31, 2011 price will be quoted at Rs 47.25 per kilogram including all taxes, they added.