Inland transportation cost issue: sugar export deal with Tajikistan delayed

 commercial agreement between Pakistan and Tajikistan for export of 30,000 tons of sugar has still not been signed because of the issue of inland transportation cost raised by officials of the commerce ministry, sources told Business Recorder on Wednesday. 

On August 15, the two countries had decided in principle that the sugar export agreement will be finalised in two weeks keeping in view Tajikistan’s request for early supply of commodity, the sources said. Pakistan and Tajikistan had agreed to let the Trading Corporation of Pakistan (TCP) to handle the execution of the deal. 

The deal neared maturity after a two-day meeting (August 13-14) between representative of both the countries. Later, minutes of meeting were mutually signed by Nurmahmad Akhmedov, the Chairman of Tajikistan’s Agency on State Material Reserves of Tajikistan, and Commerce Minister Makhdoom Amin Fahim. 

According to minutes of the meeting, Pakistan will supply 30,000 tons of white refined sugar to Tajikistan at about $20 dollar below international market price. The expected rate will be $528 per ton: on the day of the dialogue, sugar price in the world market was $548 per ton. 

During the meeting, it was also decided that the sugar will be delivered at Amangarh in Nowshera district, Khyber-Pakhtunkhwa (near Torkham border crossing) and sugar will be delivered by the TCP. Although, the export price was decided during a meeting, an official of the commerce ministry raised objection regarding the inland transportation cost, seeking a clarification on the issue. Commerce ministry officials contend that this cost should be borne by Tajikistan because Pakistan was supplying the commodity much below its international price. 

However, sources said that Tajikistan refused to bear the inland freight cost. As per general practices, international commodity prices already include inland transportation cost and quoted prices are Free on Port (FOP). Tajikistan contended that inland transportation was Pakistan’s responsibility, sources said. 

The issue of inland transportation cost had delayed the signing of the deal despite the fact that both sides had agreed to ink a commerical agreement within 15 days. The case has now been referred to the Economic Co-ordination Committee (ECC) of the cabinet. 

As the ECC schedule has still not been finalised and Tajikistan needs immediate supply, it has been suggested that Dr Abdul Hafeez Sheikh, as ECC chairman, may remove the objection and ask the TCP to bear the inland transportation cost. The matter could later be finalised in the next ECC meeting, the sources suggested.. 

“It is expected that the issue of inland transportation cost will be resolved soon and a commercial agreement will be signed during this week,” said a senior official of the ministry of commerce. 

Export of sugar will begin soon after the accord is signed, as the TCP has already been directed to make necessary arrangements for the supply of the commodity, he said. Despite the delay in signing the commercial agreement with Tajikistan, the physical delivery of the commodity would not be late, he added. “They (Tajik officials) are seeking delivery before September 30 this year. The delivery will be on time, as the commodity is already packed and ready to dispatch,” he said. 

Copyright Business Recorder, 2012

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

Articles: 4630

Leave a Reply

Your email address will not be published. Required fields are marked *