KARACHI, Feb 16: The Trading Corporation of Pakistan holds around 202,019 tons of white refined sugar which will be sold through the Utility Stores Corporation (USC) and the Central Stores Department (CSD) at cost price.

This was stated by TCP Chairman Hashim Ansari at a news briefing here on Thursday. He said that under the government policy the corporation would continue to provide relief to end consumers through these utility stores.

He said further that the TCP would not directly intervene in the open market and the government was not ready to give any subsidy to commercial bulk consumers, with a demand of around 70 per cent of total consumption in the country.

Giving details about TCP’s sugar stocks position, Mr Ansari said that the corporation had procured around 377,157 tons of white refined sugar during last year’s season. During this period, he said, the corporation had also imported around 191,271 tons which took the total to 568,428 tons.

After offloading some of the quantity, the TCP currently holds around 202,019 tons of white refined sugar.

The TCP chairman was critical of sugar traders and said that around seven tenders were floated to offload the commodity into the market but the traders made cartels in order to frustrate the government policy to ease sugar prices in the market. As a result of this, Mr Ansari said all these tenders had to be cancelled as most of the bid prices were even less than TCP’s incurred cost on these stocks.

Responding to a question, the TCP chief agreed that all these stocks were procured at much less price –- around Rs18-19 per kg. However, he said carryover charges had pushed the cost to around Rs24-25 per kg.

The government, he said, had now asked the TCP to make available these stocks to the USC, CSD and other bulk consumers at Rs26 per kg so that the end consumers could get sugar at Rs28-29. He maintained that there was a big difference in prices of imported and locally procured sugar.

Mr Ansari says that sugar procured from the local mills costs Rs23-24 (after adding storage and financial costs), while imported sugar costs Rs28-29, and after averaging out of these two prices it comes to Rs25 per kg.

Whereas these crisis were going on, he said, a new development took place with the start of new crushing season in November 2005, where a row on cane prices began between the growers and sugar mills resulting in delay in the commencement of crushing operations. Furthermore, this season, he said, around 15 per cent less area came under sugarcane cultivation owing to shortage of water.

Similarly, he said Brazil, being one of the biggest sugar producers, made it mandatory upon the mills to produce around 15 per cent ethanol in their production capacity. This pushed sugar prices higher in the world market.

Looking at these developments, he said the government had decided to purchase sugar from India. He said that when prices of sugar were being quoted in London at around $465 per ton, Indian exporters were offering it at around $420-425 per ton.

Consequently, Mr Ansari said the government had allowed imports of sugar from India through the Wagah border. Tenders have been floated and 13-14 standard documents have been also issued. Some relaxation has also been given to ensure that supplies remain smooth.

Similarly, he said timely decisions and actions by the TCP averted a difficult situation on the fertilizer front where huge shortages were witnessed. He said that TCP’s operations were transparent and all steps were taken to ensure that no favouritism or any other sort of deals took place.