KARACHI: Pakistan Agriculture Storage and Services Corporation (Passco) would provide 600,000 tons of wheat to flour mills to bring down prices of flour varieties.

Flour millers’ representatives met Passco MD Maj-Gen Tauqir Ahmed on Tuesday in Lahore to review the price situation in the light of federal government’s Jan 10 decision to immediately release one million tons of wheat to flour millers, Utility Stores and traders to curb rising prices of wheat flour ahead of general elections.

Pakistan Flour Mills Association (Sindh Zone) Chairman Chaudhry Ansar Jawed, who attended the meeting with other representatives of the flour millers’ body, told Dawn that Passco would shortly issue tenders for wheat supply to mills.

He said out of 600,000 tons, mills in Sindh would get 150,000 tons of wheat, followed by 200,000 to Punjab mills, 150,000 tons to Khyber Pakhtunkhawa and 100,000 tons to Balochistan flour mills.

Millers would get wheat from Passco at the rate of Rs2,865 per 100kg bag, and after adding Rs150-200 per bag transportation charges, wheat would cost Rs3,100-3,200 per 100kg bag to mills.

“I think there will be enough wheat stocks in the country, especially for Karachi and interior Sindh mills till March end when new crop arrives in the country,” he said.

Consumers had already paid high prices for flour and other wheat related items despite huge wheat stocks in the country.

Millers in Sindh, while lifting wheat at subsidised rate from the Sindh government at Rs2,800 per 100kgs bag, continued to push up flour prices, saying that they had to lift wheat from open market at higher rates.

Both federal and provincial governments kept on watching millers from the sidelines.

Bread, rusk and bun making units also raised prices. Chappati and nan-sellers also raised prices by Re1 per piece followed by Rs3 per piece hike in Taftan and Sheermal rates.

Ansar Jawed said that wheat price had climbed to Rs3,500 per 100kg bag 10 days back, but millers kept the rate of flour varieties unchanged. They had last raised the price on Jan 14 by Rs50-75 per 50kg bags of various flour varieties.

He claimed that prices in the open market had come down to Rs3,300 per 100kg bag following reports that Passco would provide wheat to millers.

When asked about any cut in prices, he said millers would not reduce prices, but would keep them pegged at old rates.

MUMBAI/SINGAPORE: Indian mills have signed deals to buy up to 450,000 tonnes of Brazilian raw sugar for delivery from October to December as a gap between domestic and overseas prices widens, making room for the first imports in more than two years, five dealers told Reuters.

Millers based in western and southern India and global trading firms bought sugar at around $500 per tonne on a CIF basis, as the price in the domestic market has jumped more than 23 per cent to $680 per tonne in the past three months, the dealers said on Tuesday.

India, the world’s No.2 sugar producer after Brazil, last imported the sweetener in 2009/10, sending global prices to 30-year highs. The south Asian country has been exporting sugar for two straight years as output has exceeded demand and the shift to imports could bolster overseas sugar prices.

Global benchmark New York raw sugar futures edged up on Monday as rains persisted in main producer Brazil, but an expected rise in the global surplus kept the market near a two-year low of 18.81 cents hit on Sept. 6.

“The price difference is so high that despite calculating processing and handling costs, importers can make profits of more than $60 per tonne,” said a Mumbai-based dealer with a global trading firm.

India is likely to produce a surplus for the third straight year starting from Oct. 1, but output is likely to drop sharply in the key producing state of Maharashtra, parched by drought.

“Mills in Maharashtra are unlikely to get enough sugar cane. That’s why they are seeking raw sugar for capacity utilization,” said Kamal Jain, managing director of sugar brokerage Kamal Jain Trading Services.

India, the world’s biggest sugar consumer, currently charges a duty of 10 per cent on imports of raw sugar, but that would be waived if a mill exported the same amount of sugar within three years, Jain said.

India’s sugar production in 2012/13 is likely to fall to 24 million tonnes, from 26 million a year ago.

“People who are doing this (imports) are ED&F Man and Renuka. They are parking the cargo, hoping that production will be down in Maharashtra and millers will take the raw sugar,” said a dealer in Singapore.

“They are bringing in four vessels … they have succeeded in selling about 22,000 tonnes to two mills in Maharashtra.”

THAI PRICES HIGHER THAN BRAZIL

Thailand is quoting very high prices compared with Brazil, prompting India to source her entire requirement from the South American country, dealers said.

Indian farmers are likely to seek higher prices for cane after the government cut the fertiliser subsidy and the season’s drought is set to trim yields per hectare.

“Sugar prices will remain firm in 2012/13 due to higher cane price. This will make room for more imports. India may even buy 1 million tonnes of raws in the entire year. Most will get refined in Maharashtra,” said another Mumbai-based dealer.

“There is a risk of local prices going down due to higher supply. But that is even true for the world market. While the difference between local and overseas prices stays, India will import.”

Total supply in India for 2012/13 is estimated at 30 million tonnes, against local demand of about 22.5 million tonnes.

Bumper crops and lower imports by major consumers Russia and China will help global sugar prices to fall further in the 2012/13 marketing year, consultant Jonathan Kingsman said this month.

President Rice Mills Owners Association Daska Muhammad Iqbal Gujar said that the mill owners will lodge their protest by locking up their mills and later stage a sit in outside the GEPCO offices for two days. – File photo

SIALKOT: Massively disappointed by frequent power outages that have led to closure of factories and downsizing of workforce, as many as 27 rice mills owners in Daska have said that they would shift their rice mills to Bangladesh soon.

At a press conference, President Rice Mills Owners Association Daska Muhammad Iqbal Gujar blamed the federal government for the energy crisis and said that the millers of Siraanwali in Daska tehsil were taking this extreme step to protest against the ‘never ending’ loadshedding in the area that went on 20 to 22 hours on daily basis.

He said that the hundreds of factory workers and labourers were made redundant in the region as the mills had ceased operations. If things continue like this, we will set up our rice mills in Bangladesh, he maintained.

He further said that the mill owners will lodge their protest by locking up their mills and later stage a sit in outside the GEPCO offices for two days.

The government has allowed export of up to 200,000 tonnes of sugar, with only 5000 tonnes allowed for each individual sugar mill. – File photo

KARACHI: The State Bank on Thursday advised all authorised dealers in foreign exchange (Banks) to process the cases of sugar export.

A circular in this regard was issued on Thursday to the heads and principal offices of all authorised dealers in foreign exchange operating in Pakistan.

Banks will forward the requests of sugar mills for approval of SBP. While forwarding such requests, banks should also maintain the record of each sugar mill to ensure compliance of maximum prescribed quota of 5,000 tons per sugar mill, said the SBP.

The SBP will allow permission against each E-Form on first come first served basis.

Banks will send sugar export update to Director, Exchange Policy Department, State Bank on daily basis.

The SBP said applications received after July 23, 2012 will not be entertained.

Recently the government has allowed export of sugar with some terms and conditions. A total 200,000 tons of sugar will be exported.

A quantity not in excess of 5000 tons will be allowed to be exported by individual sugar mills on first come first served basis.

The export will be made only against E-Form.

The State Bank will monitor the export and no E-Form will be issued in excess of individual and cumulative ceiling mentioned above.

The CCP noted that legal, statutory and regulatory barriers to entry were usually the result of lobbying by existing players. – File photo

ISLAMABAD: The Competition Commission of Pakistan (CCP) has taken notice of the ban on establishment of new sugar mills and expansion of existing ones, in force since December 2006, and asked the provincial government to lift the ban to allow a fair competition in the sector.

In a policy note, a copy of which was obtained by Dawn, the commission mandated to foster free competition in all spheres of commercial and economic activities observed that consumers stood to gain from greater competition.

“Competitive markets encourage more trade and lower prices. (They) provide greater choice and more employment. Let market forces of demand and supply prevail which will ensure competition.”

The policy note sent to the chief secretary and industries secretary of Punjab said that in a free market an entrepreneur must be allowed to decide whether the opportunity to set up any business enterprise, including a sugar mill, was worth availing.

“This will encourage manufacturers and service providers to be more efficient, to better respond to the needs of consumers, to innovate, to initiate and to venture, and consumers will benefit from better prices, quality goods and more choices.”

The CCP noted that legal, statutory and regulatory barriers to entry were usually the result of lobbying by existing players.

“We note that in economics and especially in the theory of competition, barriers to entry are obstacles to the path of an undertaking which wants to enter a given market. It may be any factor that makes it difficult for a new undertaking to enter a market.

“The term refers to hindrances that an undertaking may face while trying to gain entrance into a profession or a trade,” the commission said while defining the term ‘barrier’.

It said the object of erecting barriers to entry was to exclude new entrants to a market or sector of industry. These prospective entrants might bring with them efficiencies that could reduce costs related to production (by introducing novel technology or through better research and development) which in turn would enhance competition by forcing existing players to stay competitive. This threat can be neutralised by erecting barriers to entry for new players.

It said that if existing players had managed to exploit some of the economies of scale that were available to undertakings in a particular industry, they would have developed a cost advantage over potential entrants. They may use this advantage to cut prices if and when new players enter the market. “Although they will be moving away from short-run profit maximisation objectives, they will, however, inflict losses on new undertakings and thus protect their own market position in the long run.

Once a potential entrant is successfully barred from a market, existing players are free to revert to their prior anti-competitive conduct.”

The policy note said that capacity expansion restraint in the industrial sector might indirectly support the anti-competitive practices such as production curtailment and quota allocation and eventually manipulation of prices by the incumbent undertakings.

However, incentives of capacity expansion would help achieve economies of scales and scope which could result in better prices and quality for consumers.

It rejected the plea of the Punjab government that the ban was meant to protect cotton from the encroachment of sugarcane crop.

Commenting on the note, chairman of the All-Pakistan Sugar Mills Association Javed Kayani warned that the price of sugar would go up if more sugar mills were established.

“Ground realities are different from what the CCP thinks,” he remarked. He said the existing sugar mills had a capacity to produce five million tons of sugar, but only 3.1 million was being produced currently due to what he claimed non-availability of sugarcane.

He further claimed that a ‘cane war’ was already going on in the province and the mills were getting sugarcane at prices much higher than the support price announced by the government.

In his opinion, any addition to the existing capacity would serve to create chaos in the sector.

It was in this background that the official spot rates were quoted higher by Rs100 per maund at Rs5,800 but most of the deals were based on quality of lint in trade. - File photo

KARACHI: Cotton prices on Wednesday tended further higher as spinners and mills resumed their normal daily intake and ginners were quick to take advantage of the rising demand.

Floor brokers said some of the fine lots from the southern Punjab cotton belt were traded as higher as Rs6,000 per maund, up Rs300 from the previous closing rates.

“There was no apparent bullish reason behind the snap rally but some said it may be due to a fight between the big ones to grab the floating stock of fine lots”, they said.

They said the latest mill buying spree may have been caused by the perception that the duty-free relief given by the EU to 75 items, notably textiles could boost exports to any highs.

The more surprising fact was that the local market trend was quite the reverse of the global markets, notably New York cotton futures, which are again on the decline, they added.

However, the run-up despite reports of a bumper crop reflects that textile sector was heading for a record exports during the coming years as the EU is one of the major textile importer, its previous annual bill being around $3.5 billion, textile sources said.

It was in this background that the official spot rates were quoted higher by Rs100 per maund at Rs5,800 but most of the deals were based on quality of lint in trade.

The New York cotton futures on the other hand were lowered by 1.74 and 1.77 cents at 94.97 and 96.06 cents per lb for both the ruling March and forward May contracts respectively.

The following are some of the notable deals reported by the Karachi Brokers Forum on Wednesday:

SINDH TYPE: 200 bales and 400 and 800 bales, Mirpurkhas, Hyderabad, Kotri Khadro and Shahdadpur at Rs4,600.

PUNJAB VARIETY: 600 and 400 bales, each Khanewal, Yazman and Bahawalpur at Rs6,000, 1,000 bales, Rahimyar Khan at Rs5,900 to Rs6,000, 2,400 bales, Bakhar at Rs5,850, 1,000 bales, Chichawatni at Rs5,800, 2,400 bales, Sadiqabad at Rs5,750 to Rs6,000, 200 bales, Uch Sharif at Rs5,700, 800 bales, Lodhran at Rs5,600 to Rs5,800, 1,000 bales, Fort Abbas at Rs5,575 to Rs5,750, 1,000 bales, Dahranwala at Rs5,250,and 200 bales each, Faqirwali and Haroonabad also at this rate.

A spokesman said that TCP was working on fast track for payments after completion of codal formalities as agreed by the mills as per tender documents such as performance bonds, offer of stocks by the mills, completion of inspection/survey, lab tests and other documentation on the part of the mills.

LAHORE: The Trading Corporation of Pakistan on Wednesday said that it had made payment of Rs2.45 billion to seven of the 45 sugar mills from which it had procured 378,000 tons of sugar last month.

Rejecting an allegation levelled by the Pakistan Sugar Mills Association (PSMA) about inordinate delay in the release of the payments, a TCP spokesman said the payments to the seven mills were made after completion of codal formalities and receipt of quality test reports of samples from PSQCA/PCSIR.

He said the payment to the remaining mills would be made as soon as codal formalities were completed and lab test reports and the bills from the mills supported by necessary documents received. He was hopeful that the process would be completed and payment made to all the mills by the end of this month.

He said the TCP was working on fast track for payments after completion of codal formalities as agreed by the mills as per tender documents such as performance bonds, offer of stocks by the mills, completion of inspection/survey, lab tests and other documentation on the part of the mills.

Shutting down illegal quarrying in the tail end of the Margalla Hills still remains one of the biggest challenges for the government. - File photo

ISLAMABAD: The initiative launched by Pakistan Environment Protection Agency (Pak-Epa) for greening the steel industry has made some progress as one of the eight steel mills in the capital installed equipment to control emissions of pollutants.

“The bag-house filter is a proven technology worldwide to control 99 per cent emissions of dangerous pollutants from chimneys,” said Director General Pak-Epa Asif Shuja who had given four months to the owners of steel mills in the capital industrial sectors to install the environment-friendly equipment.

After a lot of pushing by the government, Pak-Epa and the owners of the steel mills signed a resolution supporting the agency to make Islamabad pollution-free in general and the industrial area in particular.

The resolution signed by all the parties in July bound the owners to make all-out efforts, including upgradation of anti-pollution equipment, and further bring down emissions from their units within four months to the levels prescribed in the National Environment Quality Standards (NEQS) established by the government.

“The equipment seems working perfectly. There are no visible dust clouds and black smoke is also under control,” said one of the inspectors from Pak-Epa observing the operation of the new gadget installed at Karachi Steel Mills in I-9 Industrial Area.

However, the system would require monitoring and Pak-Epa still has to check gaseous emissions once the tests were sent to the lab, the official explained.

The new equipment would allow recording emission levels regularly through online monitors already installed at the steel units.

The Pak-Epa chief said his plan of greening the industry-2016 was aimed at reining in all the steel mills in sectors I-9, I-10, Kahuta Triangle and he wanted to bring illegal stone crushers in Sangjani and other areas under the ambit of his plan.

He said the owners of still mills were still reluctant to install the new technology because of the cost that touched Rs7 million to Rs8 million.

“There are no options or short cuts. It is imperative that all the steel mills should install new technology to make the air we breathe safe,” he added.

Shutting down illegal quarrying in the tail end of the Margalla Hills still remains one of the biggest challenges for the government.

“The idea is to introduce crop-slicing and benching practice for rehabilitation of the Margalla Hills that has been exhausted by the illegal quarrying,” said Asif Shuja.

Pak-Epa had also suggested regenerating the quarried and disfigured hills and transforming them into public resorts.

“The idea is to encourage sustainable development. There are plenty of holes that can be converted into ponds and lakes and the greenery can be improved around it for the people to appreciate the environment,” he explained.— Jamal Shahid

Reports of failure of talks between the TCP and the Pakistan Sugar Mills Association to buy about 0.2m tons of sugar pushed down its prices both at the wholesale and retail levels on renewed selling. - File photo

Some essential items consolidated their previous gain on the wholesale commodity market during the previous week but supply position remained fairly comfortable owing to steady arrivals from upcountry trading centres.

However, some type of pulses could not sustain last week’s sharp rise and ended lower under the lead of masoor followed by reports of fresh selling by a leading importer.

Sugar remained in the news throughout the week followed by reports of failure of talks between the sugar mills association and the government to procure the commodity through official channels to stabilise its prices on the open market.

In the process, however, its prices fell and were last quoted at around Rs55 per kilo with dealers expecting further fall.

The arrest of downward drift in cotton prices was the week’s another notable feature. Reports were there that the TCP had given indication to purchase about a million bales from ginners at Rs5,500 per maund to ensure a fair return to growers.

Prices were expected to rise further from the current levels and could stabilise around official procurement rate of Rs5,500 per muand.

On the industrial counter, guar seed maintained its upward drive for the second week in a row on reports of a short crop. The net increase over the week was of the order of Rs500-800 per 100 kg at Rs80 per kilo, a record high so far.

The cereal sector, on the other hand, stayed week on selling prompted by larger arrivals from upcountry markets and falling demand by the end-product users.

Wheat: Prices of wheat remained steady despite supplies in far excess of demand. The rise in prices was Rs5 per maund amid slow activity.

Sugar: Reports of failure of talks between the TCP and the Pakistan Sugar Mills Association to buy about 0.2m tons of sugar pushed down its prices both at the wholesale and retail levels on renewed selling.

While prices of white sugar were traded lower on wholesale markets, retail prices were quoted further higher around Rs55 per kilo.

Desi sugar did not show any change and so did gur which was quoted unchanged owing to fall in demand from Afghanistan.

Pulses: Pulses again remained in active demand but were held unchanged under the lead of gram and gram dal on renewed support and except for masoor, were quoted sharply lower.

Rice: Prices of new IRRI-6 crop were quoted modestly lower on selling by local stockists in absence of demand from private sector exporters. Prices of basmati varieties including kernel and sela types, lacked active support of exporters and were held unchanged.

Cereals: This sector showed easy trend under the lead of maize, jowar and bajra on selling triggered by reports of rise in arrivals from Sindh markets. Maize led the list followed by others, while jowar was quoted unchanged.

Among other cereals, barley led the advance followed by reports of active buying by leading exporters but was quoted unchanged at previous level.

Oilseeds: This sector, on the other hand, showed easy trend under the lead of rapeseed on selling reported by new crop arrivals, and prices were quoted lower by Rs100 per bag.

Prices of other major seeds, including cottonseed were held unchanged barring til which fell sharply lower by Rs50 per 100 kg.

Castor seed with higher export demand was quoted modestly higher amid active trading.

Cotton: Its prices earlier recovered from previous lower levels on active spinner buying and was quoted higher but late selling followed by reports of rise in arrivals of phutti and fall in mill demand, pushed its prices below Rs5,000 per maund.

Oilseeds: Prices of cottonseed were quoted lower as new crop arrivals were on the higher side leading to decline in price.

Oilcakes: Rapeseed cakes showed modest fall but later came in for active selling under the lead of cottonseed cakes on reports of large new crop arrivals and fell sharply lower—M.A