By Staff Reporter
KARACHI: State-run the Trading Corporation of Pakistan (TCP) has issued an international tender to purchase between 300,000 and 500,000 metric tons of white refined sugar, traders said on Friday, as the country scrambles to stabilize domestic prices following a sharp increase driven by a massive export boom and a production slump.
The tender, with a submission deadline of July 18, invites price offers from suppliers worldwide for sugar packed in bags, with a minimum bid of 25,000 metric tons. The TCP retains flexibility to adjust the purchase volume, traders noted. Shipments are slated to load in August, with all consignments required to reach Pakistan by September 30. The sugar, a premium, coarse-grain variety commonly consumed locally, will face rigorous post-shipment quality inspections to meet market standards.
The move follows the government’s approval on July 8 to import 500,000 metric tons of sugar to counter escalating costs. Market analysts report retail sugar prices have surged 36% to Rs200 per kilogram from Rs140 since January, a spike fueled by a 14% drop in domestic production to 5.9 million metric tons this year, hampered by adverse weather and reduced cane yields.
Compounding the crisis, sugar exports soared 2,200% in the last fiscal year, with 765,734 metric tons shipped between July and May, generating Rs114 billion in revenue. While the export windfall bolstered foreign exchange reserves, it gutted local supplies. The Pakistan Sugar Mills Association (PSMA) estimates current stocks of 2.8 million metric tons will last only until November, based on monthly consumption of 535,000 metric tons, against an annual demand of 6.4 million tonnes.
To ease the burden on consumers and curb inflation, the government has eliminated all duties and taxes on sugar imports. The Federal Board of Revenue (FBR) has exempted Customs duty on 500,000 metric tons, cut the sales tax from 18% to 0.25%, and reduced withholding tax to 0.25%, while waiving the 3% minimum value-added tax, per notifications issued on Wednesday. These reliefs, effective until September 30, 2025, apply to imports by the TCP or private sector.
The TCP will exclusively handle the imports under government oversight to ensure transparency and quality, with the Commerce Division enlisting an international inspection firm to verify standards. The 500,000-tonne shipment, priced at Rs153 per kilogram (excluding duties), offers a Rs37 discount to the domestic peak, providing a cost-effective buffer.
The import push comes after exports left local markets reeling. The government, which previously defended its export policy citing abundant supply at the time, now sees imports as critical to bridge the gap. Critics, however, slam the earlier approvals, arguing they prioritized millers’ profits—bolstered by the Rs114 billion haul—over consumer affordability.
Copyright © 2021 Independent Pakistan | All rights reserved
