These instructions were issued on the request of the Ministry of Food and Agriculture (Minfa), which raised this issue at the Economic Co-ordination Committee (ECC) of the Cabinet, in its meeting on January 12, 2010. "The ECC taking note of status of procurement of paddy through Passco, directed the SBP to manage additional financial limits for procurement of rice and report to the ECC in its next meeting," the sources added.
The Minfa was also directed that detailed analysis by the independent appraiser be conducted on the mechanism for procurement of rice directly from farmers indicating reasons for delay along with recommendations for in time procurement in future.
Chairman ECC, Finance Minister Shaukat Tarin was of the view that report in this regard should positively be brought before the ECC. According to official documents, the ECC directed the Minfa on October 6, 2009 that it should conduct an inquiry into the delayed procurement of paddy through an independent appraiser but after a passage of three months, the Minfa has yet to submit the required report.
The sources said the Trading Corporation of Pakistan has also been directed to expedite measures to sell rice expeditiously through international biding by utilising services of commercial counsellors in Iran, Saudi Arabia and UAE, etc. According to sources, the ECC was informed that the government of Philippine has shown interest in purchasing rice and selling sugar to Pakistan at international prices. The ECC has directed the Commerce Ministry to start negotiations on government-to-government basis and come up with a comprehensive proposal at the earliest.
Following the ECC decision, the TCP has announced export tender for 25,000 MT Super Basmati rice, which was opened on Thursday. In November 2009, the TCP had floated a tender for export of the same quality rice as overseas buyers are not interested on account of no milling infrastructure with the TCP for reprocessing of the commodity.
Export consignments are reprocessed before being exported from Pakistan and only the private sector is in a commanding position and well-equipped with modern processing mills. According to analysts, overseas buyers are quality conscious especially on Pakistan's top variety Super Basmati rice and no such interest was seen recently for such purchase even at government-to-government level.
The best and most appropriate exit for the TCP is to float local sale tenders on ex-warehouse basis in PKR like Passco; premium from market can be gained on quantity sale, said one of the market player from Karachi. Passco recently sold 143,000 MT of Super Basmati rice at a fairly high price due to large offerings.