Informed sources in the Industries Ministry told Business Recorder that the Economic Co-ordination Committee (ECC) of the Cabinet, in its meeting on November 17, 2009 took stock of the sugar situation in the country and decided that the TCP should start the tendering process immediately, so that sugar starts arriving by February 2010.
Subsequently, according to the minutes of the meeting of the Sugar Advisory Board held on January 4, 2010, all participants unanimously concluded that the best way to compel the price go down was to supplement the domestic stocks of sugar through timely arrival of the imported sugar to discourage speculative hoarding.
The consensus was that the TCP had already tendered 0.5 million tons of sugar which must reach the country by February 2010 while another 0.5 million tons would need to be positioned inside the country before the end of the crushing season. In addition, 0.5 million tons would be imported for maintaining strategic reserve/buffer stocks as already approved by the Cabinet.
However, in the last meeting held on January 12, 2010 under the chairmanship of Minister for Finance, Shaukat Tarin, the ECC discussed a summary of the Ministry of Industries regarding progress on implementation of National Sugar Policy 2009-10. The ministry requested the ECC to give TCP clear-cut timelines to import the remaining 0.5 million tons of white sugar well before the end of the present crushing season in April, 2010 as this will help curb the speculation and hoarding trend in the market, including alleged forward selling of sugar.
In this meeting, the previous ECC decisions which were never implemented, were conveniently ignored and it was decided that TCP will import 0.5 million tons of white sugar by the end of March 2010. Even though the Cabinet approved the Sugar Policy on November 4, 2009.
Resultantly, until now, through well-co-ordinated and concerted efforts, the decisions taken by the Cabinet and the ECC have not been implemented and not a single kilo of imported white sugar has actually arrived in Pakistan. In the TCP clarification that was published in Business Recorder on Wednesday, January 20, 2010, TCP has admitted that no tender documents in respect of 0.35 MMT of sugar import has so far been issued by the TCP.
However, this correspondent received an inside information which suggests that the TCP in connivance with the Ministry of Commerce and other officials continue to coerce the Ministry of Science and Technology into violating the current national standards in force and are delaying the issuance of the tender terms and conditions due to this reason.
Powerful lobbies behind this scheme refuse to accept the fact that the national standards were formulated by independent technical committees comprising all the stakeholders from the government, academia, industry, chambers and others, a few years ago and took effect from January 1, 2009. The quality prescribed for white sugar futures, which are traded on the Liffe in London, is based on a colour of a maximum 45 units Icumsa attenuation index which is an international quality benchmark. This can easily comply with Pakistan's current standards and can be sourced from all origins. Moreover, Pakistan's standard for polypropylene woven sacks for packing (sugar) (1st Rev) PS 3128-2008 (R) takes into account the packing standards of different countries and cannot be modified on an ad hoc basis to specifically accommodate Thailand and exclude other sugar countries such as Brazil, Argentina and Guatemala.
Sources confirmed that that PSQCA and Ministry of Science of Technology defied pressure from the federal government and the Ministry of Commerce to review the standards of imported sugar as they claim the process in relation to PSQCA has to be followed at any cost.
They have refused to give a green signal for an ad hoc decision in reply to the Secretary Commerce's letter of January 7, 2010. Also, before clearance of imported sugar consignments through Customs, PSQCA takes the necessary action for drawing of samples of sugar and packing thereof for testing/conformity assessment in accordance with the requirements of the PSQCA Act 1996 and conformity assessment rules.
Internationally, sugar futures have rallied monumentally to fresh 30-year peaks. Analysts predict that white sugar futures will cross $1000. The sugar crisis is going to continue to worsen in the coming few months.