By Staff Reporter
KARACHI: The state-owned Trading Corporation of Pakistan (TCP) has purchased approximately 55,000 metric tons of white sugar through an international tender that closed this week, according to European traders cited by Reuters.
The move comes as the government grapples with skyrocketing domestic sugar prices, which have fueled public discontent and prompted urgent efforts to stabilise the market.
The TCP secured 30,000 tons of medium-grade sugar from Dubai-based Al Khaleej Sugar at $586.00 per ton, cost and freight (c&f) included, and 25,000 tons of fine-grade sugar from Swiss trading house Louis Dreyfus Co. at about $580 per ton c&f, traders said. The tender sought up to 100,000 tons of fine-grade sugar. Another participant has been asked to revise its offer, with traders indicating a potential additional award before the week’s end.
The latest purchases follow a string of unsuccessful tenders, underscoring Pakistan’s struggle to secure affordable supplies. A July bid for 50,000 tons drew no offers, while a subsequent tender for 100,000 tons on July 31 saw a lowest price of $539.00 per ton c&f but failed to result in a deal. Other offers in the latest tender included Dreyfus at $580.75 per ton c&f for 25,000 tons of fine-grade sugar. Traders noted that further price and volume details could emerge as negotiations continue.
The tender, issued last week, called for small/fine- and medium-grade sugar from global origins, excluding India and Israel. Shipments are slated for September, with 50,000 tons of breakbulk supplies due between September 1 and 15, and the remainder from September 10 to 25. Container shipments are scheduled for September 1 to 20, with all sugar required to arrive in Pakistan by October 20.
Pakistan’s sugar market is under strain as retail prices have surged past 200 rupees per kilogram, far exceeding the government’s capped retail price of 173 rupees and ex-mill price of 165 rupees. The price spike has amplified public frustration over rising food costs, prompting the government to approve imports of 500,000 tons on July 8 to stabilise supplies.
National Food Security and Research Minister Rana Tanveer Hussain has pushed back against claims of a sugar shortage. Hussain, last month said Pakistan began the season with 800,000 metric tons in reserve, with the 2024-25 crushing season yielding 6.8 million metric tons against a domestic demand of 6.3 million tons, creating a 1.3-million-ton surplus.
To manage the surplus and support farmers and millers, the government allowed exports of 750,000 metric tons last year, generating $402 million. Exports initially helped lower retail prices from 138 rupees per kilogram to 119 rupees starting in October 2024. However, erratic weather slashed production in the 2024-25 season to 5.8 million metric tons, below the projected 7 million tons, forcing a halt to exports in January 2025.
By April 30, stocks stood at 6.3 million metric tons, including a 0.5-million-ton buffer, aligning with annual consumption. Current reserves of 2 million tons are sufficient for three months. Despite ample stocks, prices have spiked, which the government attributed to market manipulation, with sugarcane procurement costs rising from 450 to 700 rupees per 40 kilograms.
The Pakistan Sugar Mills Association (PSMA) has denied that exports drove the price hikes, with a spokesperson attributing past disruptions to “divergent government measures,” which have since been resolved. The PSMA confirmed that mills are supplying sugar at the capped ex-mill price of 165 rupees per kilogram, with stocks adequate until mid-November 2025.
Copyright © 2021 Independent Pakistan | All rights reserved
