February 12, 2006	Sunday	Muharram 13, 1427

KARACHI, Feb 11: On the assurance provided by the prime minister that the Trading Corporation of Pakistan (TCP) would not be allowed to directly sell its sugar stocks in the open market, private importers have started opening letters of credit (LCs) for import of white refined sugar to meet the ongoing shortage of the commodity in the country.

A delegation of Pakistan Commodity Importers Association (PCIA) led by its chairman Raees Ashraf Tarmohammad met the prime minister and other high officials of the ministry of finance and industries on Friday to find a way out of the current sugar crisis.

Some importers have already opened LCs for import of substantial quantity of refined sugar and it is expected that by March around 200,000 tons of sweetener would reach the country, market sources said.

Sources privy to the meeting told Dawn that the PCIA delegation raised the issue about the TCP role and informed the prime minister that the involvement of the corporation last time resulted in losses to importers.

The importers pointed out that when the TCP is allowed to import sugar and sell it in the open market, it has double negative impact. Firstly, the TCP involvement pushes the sugar prices up in the world market and secondly, in the domestic market importers have to suffer as corporation’s direct sales into the market bring the prices down causing financial loss to the importers.

After hearing the arguments, the prime minister assured the PCIA delegation that the TCP would not be allowed to directly intervene or sell its sugar stocks in the open market rather, it would be asked to make its stocks available to the Utility Stores Corporation to ease the soaring sugar prices.

The delegation members also suggested that there should not had been sugar crisis at this juncture when the crushing season was in full swing and around 2.8 to 3 million tons of sugar are likely to be produced in the country.

However, a spokesman of sugar mills told Dawn that there was a lot of fuss over the hike in sugar prices but the factors that are responsible for creation of the crisis have not been discussed. He said that the millers are paying double the government approved price for sugarcane to the growers but no one is ready to take this fact into account.

The chairman PCIA said that the prices of white refined sugar had also increased in the world market and by the middle of January they were being quoted at around $350 per ton and have now soared to $471 to $490 per ton.

However, he said that two ship-loads of 12,500 tons each of white refined sugar from India were expected to reach Karachi of Pakistan (a group of licensed next week and similarly, he said couple of racks (railway) of 1,800 tons through Wahga are also due during the same period. He said the Indian government did not allow shipments by road whereas there is a shortage of railway wagons in India.

Consequently, he said the most suitable route is by sea and some importers have already booked 500 containers of 25 tons each from Brazil which would mean that another 12,500 tons of sugar would soon be reaching the country.

Soon after meeting the prime minister, Mr Tarmohammad said that some importers booked 1,000 containers from the Gulf countries and hoped that by end March a total of around 200,000 tons of imported sugar would have reached the country. However, he said sugar imported from the Gulf countries is being quoted at around $490 per ton whereas from Brazil it costs $471 per ton.

The PCIA delegation also met Salman Shah, adviser to the prime minister on Finance and Economic Affairs, Dr Ashfaq Husain, Secretary Industries and Finance and chairman CBR Abdullah Yusuf.