ISLAMABAD, Aug 15: The delay in releasing the sugar stock of over 891,000 tons lying with the Trading Corporation of Pakistan (TCP) will not only result into a loss of Rs320 million per month to the national kitty but will also force consumers to pay more for the commodity, it is learnt.
The carrying cost of the sugar, which includes storage and bank charges, stood at 40 paisa per kg per month. The average price of TCP sugar was Rs38.50 per kg in July 2006. This means that in the current month it rose to Rs39 per kg.
The statistics showed that with the passing of time, the consumers would have to pay more for the inefficiency of the government for not deciding the issue at earliest for unknown reasons.
Due to a same kind of delay in taking decision in October 2005, a loss of around $200 million caused to the national exchequer for importing costlier sugar in the months of February 2006 onward from international market, which was available much below $400 per ton in November and December 2005.
An official in the finance ministry told Dawn that the one reason for delay in disbursement of the available stocks might be the strong opposition from the private sector sugar importers, who were asking the government not to sell TCP’s sugar in the market below their cost.
He said that the two summaries had already been sent to the senior officials for deciding the issue at earliest to give benefits to the consumers. Now another summary is being drafted to resolve the issue, added the official.
Another source told Dawn the government was considering a package of Rs4-5 billion for subsidising the sugar cost for selling at cheaper price at retail sector. The subsidisation of sugar due to improper planning of the relevant ministries would also have a negative impact on the national exchequer. "This will be another misuse of the taxpayers’ money," the source added.
TCP Chairman Asif Zaman Ansari told Dawn the government had constraints in offloading the sugar stock to protect the interest of all the stakeholders. However, he said that a decision to this effect was likely to be taken shortly.
Mr Ansari said that a total of 11 international tenders were held for import of sugar until August 2006. He was of the opinion that around $2.56 million were saved for the national exchequer after further negotiating on prices with the lowest bidders.
The sources said sugar price in the next year would depend on the implementation of the indicative price as well as sugarcane production. He said that this year the average price of sugarcane given to farmers in Sindh was Rs75 per 40 kg, while it was Rs65 in Punjab.
They said keeping this in view the farmers would demand either the same amount if no increase was made. The sources said that in case if the sugarcane price was Rs60 per 40 kg, after the cost of millers, payment of 15 per cent GST and margins of wholesaler and retailers, the consumer price of sugar would be around Rs33 per kg next year.
Similarly, the price of sugar might be brought down in case the sugarcane production crossed the 50 million tons target. The import of raw sugar, which was duty free, would also depend on international market price for bridging the shortfall in the sugarcane production, the sources added.