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This blog is for students, managers and those lay people who are interested to contribute to, comment on or simply share their workplace problems and are keen to learn about issues relating to public finance, corporate finance and macro-economic management affecting their lives.

Monday, August 9, 2010

Sugar sugar everywhere….But do you have a grain for your Iftar-time lime drink?

It was reported in these pages that Trading Corporation of Pakistan had bought sugar from China @ $558 per ton. It was a good news but probably sugar at that cheap rate was not viable for Pakistan market. Soon the sweet deal turned bitter and had to be scrapped apparently for supplier firm’s inability to honor its commitment. The month of Ramadan is now around the corner and with sugar shortage in the wake of increased demand, thirsty people at the break of their fast would not be able to quench their thirst with home-made chilled beverage of fresh lime. 
However, Businessweek has reported that taking advantage of the shortage and abnormal demand during Ramadan, a Dubai-based firm has seized the opportunity and is supplying sugar at a much higher rate. The report says that Pakistan’s Trading Corp. purchased 205,000 metric tons of white sugar to boost supplies and reduce domestic prices. The Trading Corp. bought the sugar from Dubai’s Al-Khaleej Sugar Co. at $674.80 a ton, the state-run agency said in a statement from Karachi today.
At this rate, the landing cost of sugar would be Rs. 57 per kg and after taking into account freight and duties, it should be available to retail customers at Rs. 63-65 per kg. It is yet to be seen if the customers would be able to get sugar at all. And no one would let them buy at this rate and if the past experience is any guide, the sugar price would surely cross Rs. 75 per kg. That will fill many coffers at the cost of common people.
The government also plans to complete purchases of 1.2 million tons of sugar to overcome shortages and control prices. Pakistan has received shipments of 264,111 tons since February and has confirmed orders of 895,000 tons scheduled to arrive by November. Trading Corp. had planned to buy at least 175,000 tons in today’s tender. It bought 320,000 tons on Aug. 2 from Singapore’s Agrocorp. and Dubai’s Sucden.
Pakistan also allowed traders to import 500,000 metric tons of raw sugar until November 30 without paying any duties, according to a government statement last month.


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