Following the directives of the federal government, the Trading Corporation of Pakistan (TCP) has procured some 50,000 tons of sugar from 34 local mills. Sources told Business Recorder on Thursday that TCP has finalised deals for the procurement of 50,000 tons of sugar at Rs 48,150 per ton from local sugar mills, which are facing some financial crisis due to bumper sugarcane crop and slow sales.
Last month, the Economic Co-ordination Committee (ECC) of the Cabinet asked the state-run grain trader for procurement of 100,000 tons of sugar from domestic sugar mills. Following the ECC directives, TCP decided to procure sugar through two tenders. First sugar tender was issued on July 3, 2013 for purchase of 50,000 tons sugar from local mills.
Accordingly, the tender was opened on July 18, 2013 and as many as 58 parties expressed interest in sale of sugar stocks to TCP. As per the tender terms & conditions, bidders were required to quote bids for a minimum quantity of 2,000 tons and a maximum 5,000 tons. The lowest offered price was Rs 48,150 per ton and highest bid was Rs 60,000 per ton. The lowest bid was submitted by M/s Adam Sugar Mills for the supply of total 5,000 tons of sugar.
The TCP has accepted bid of Adam Sugar Mills and accordingly a Letter of Acceptance was issued to the first lowest bidders for the purchase of 5,000 tons of sugar. As the tender was for the procurement of 50,000 tons of sugar and price matching was already allowed by the ECC, the TCP offered other bidders/mills to match the lowest price. In response to TCP”s offer, out of remaining 57 bidders, some 33 bidders agreed to supply a cumulative quantity of 143,700 tons at Rs 48,150 per ton.
Sources said as the tender was for a quantity of 50,000 tons of sugar procurement and mills have agreed to supply 143,700 tons of sugar, following the past practices TCP decided to procure sugar on prorata basis. Accordingly, the TCP has procured some 45,000 tons of sugar from 33 mills on prorata basis and contract letters have been awarded to 34 mills including first lowest bidder.
The TCP has procured some 776 tons of sugar from Premier Sugar Mills and 684 tons from Dewan Sugar Mills. Some 602 tons sugar has been procured from each mill including Alliance Sugar Mill, Habib Sugar Mills, Kiran Sugar Mills, RYK Sugar Mills and Sakrand Sugar Mills. Balance quantity of 40,430 tons sugar has been procured from 26 mills on prorata basis to complete the tender quantity.
Sources said the TCP will soon start sampling and inspection of stocks to complete the process of procurement, while the procured sugar will be directly supplied to the Utility Stores Corporation (USC). The TCP has already issued another sugar tender for the procurement of 50,000 tons from domestic mills. This tender will be opened today (August 2, 2013) at TCP Head Office.