KARACHI, Oct 12: The government-owned Trading Corporation of Pakistan is emerging as the single largest trading house of the country with a conservative estimate of fund involvement of Rs30 billion by December this year.
Also now being revived is another public sector corporation, the Utility Stores Corporation that is being asked to offer through its retail outlets in major urban centres the essential goods to the general public at the prices fixed by the government.
"While the TCP serves the interest of at least 40 members of Shaukat Aziz's large cabinet, who come from the rich farming community, the Utility Stores Corporation serves an eye wash for the general public at large," remarked a cynic.
"But these were all the gimmicks of the politicians who used public money to keep themselves popular," is a comment of a cynic who believes that it was a conspiracy of the circumstances that present government of clean people, who day in and day out, swear by the market economy, are now forced to use crutches of the public sector institutions.
It is a compulsion of events and the fear of becoming unpopular that Shaukat Aziz government is now forced to put heavy funds at the disposal of TCP, which ironically was about to be closed down in 1996 when a World Bank dominated care taker government succeeded the PPP government.
"Don't forget that out of 60 ministers cabinet, there are at least 40 who come from the farming co0mmunity," an observer said and reminded that look at who's who of Shaukat Aziz's cabinet. "Either they are the same or close relatives of the ministers of the previous cabinets."
According to an assessment, the funds at stake in TCP transactions will increase much higher than Rs30 billion if the government decides to import more wheat after shipment of 925,000 tons by December.
The Prime Minister has hinted at the possibility of importing more wheat as traditionally January to March are critical periods of wheat supply in Pakistan. The TCP is well poised for export of cotton and there are reasons to believe that it may procure a huge quantity involving at least Rs10 billion funds.
The TCP has been activated for last few years to intervene in the event of scarcity as well as in case of abundance of wheat, cotton and sugar. At present TCP's Rs7 billion was stuck up in purchase of over 463,000 tons of sugar. On government orders, the TCP is offering 50,000 tons of sugar to the traders to be sold at Rs19 a kg.
Another amount of Rs13 billion (204 million dollars) is stuck up with the TCP for import of 926,000 tons of wheat. If government decides to import one million tons of wheat after December another amount of Rs14 billion would have to be placed at the disposal of the TCP. The sale of this Rs27 billion worth of wheat will involve heavy subsidy, which has so far not been taken into account in the budget.
The TCP has been asked to import 250,000 tons of urea before December. Out of this, the TCP has already tendered and accepted bids for import of 170,000 tons of urea.
The government has sanctioned Rs3.9 billion to the TCP for import of 150,000 tons of urea. The TCP will need about Rs4 billion more to place import order for 150,000 tons of urea. The TCP was instructed to import urea in September, which, officials are certain, will start reaching here by November.
Officials say that right now there were no plans to export sugar. They fear that sugarcane production this season is lower than that of last season and sugarcane crushing is being delayed. Total sugar production in the coming days will be hardly 3.2 million tons as against consumption demand of 3.6 million tons.
The government wants to use over 0.4 million four tons of sugar as buffer stock and also for pumping in the market in future if there was scarcity. A bumper cotton crop this season has brought the rate of un-ginned and lint prices to bottom low bringing sleepless nights to many ministers in the federal and provincial cabinets and members of the Senate, National and the provincial assemblies. The Prime Minister did not take much time in commissioning the TCP to intervene in the market.
For the first time, the TCP has been asked to procure "unlimited" cotton bales to ensure that farmers get Rs925 for 40 kg of phutti. A sum of Rs4.80 billion have been provided for procuring cotton during October to December with a promise of more funds.
The TCP may buy up to half a million bales this season if the situation warranted. The TCP plans to explore export market for this cotton. It is another multi-billion rupees trading of the public sector organization.