January 30, 2002	Wednesday	Ziqa’ad 15, 1422

KARACHI, Jan 29: The government has agreed in principle to purchase around 200,000 tons of white refined sugar from mills for which the Trading Corporation of Pakistan would be asked to enter the market.

In this regard a delegation of Pakistan Sugar Mills Association (PSMA), led by its central chairman Ashraf W Tabani on Tuesday, held a meeting with TCP chairman Syed Masood Alam Rizvi.

The quantity, to be procured by the state-owned corporation, will be used as buffer stock as well for stabilizing sugar prices in the domestic market.

The meeting discussed full range of modalities, covering the objective of such purchases by the TCP, sugar price, allocations, payment, time frame of transactions, storage, sales etc.

It was agreed that mills would sell sugar to the TCP at cost price and that the procurement should start within 30 days.

Similarly, it was also agreed that sugar, purchased by the corporation, would be stored at the respective sugar mill and no storage charges would be demanded.

Both sides have also agree that on achieving the objective of bringing the sugar prices at a level that will be cost-effective for the industry the TCP will not sell the produce in the open market without prior consultation with the PSMA.

Ever since the start of new season (2001-02), the sugar industry had been demanding of the government to allow the industry to export some quantity in order to assist it in improving its liquidity position.

The industry had been blaming the government for allowing unbridled imports of white refined sugar last year, resulting in huge carryover stocks of the produce.

In order to make its demand accepted the industry even delayed its procurement of cane from the growers and due to ‘price war’ the crushing season was also started late by around 30 days.

According to PSMA figures, the industry by end of December 2001, was holding around 0.5 million tons of unsold stocks, which it claimed to have squeezed it from the much-needed cash flow or working capital.

The meeting was attended by the director general, director finance and director commerce and trade of the TCP and chairmen of PSMA-Sindh and Punjab zones and members of the PSMA central executive committee.