Sugar may cost Rs100/kg in Ramazan
08 July, 2010
ISLAMABAD: The reputation of son-in-law of Prime Minister Yusuf Raza Gilaniâ€™s cousin, who had won a $50 million contract to import 100,000 tons of sugar from Brazil before the start of holy month of Ramazan after quoting the lowest ever rates, is now at huge stake after his Chinese partners failed to meet a set deadline of July 5 and had sought ten more days to ensure delivery of consignment.
An official confirmed that if Ali Syed fails to import multimillion dollar consignment on time, it may cost Pakistan very heavily as poor consumers would buy sugar at Rs100 per kg in Ramazan. But, the sources said, if he manages to supply sugar after getting extension in the contract, Pakistan might save $10 million on only one contract.
The Trading Corporation of Pakistan (TCP) has now allowed Ali Syed to give a new schedule for supply of sugar from Brazil after applying 0.1 percent penalty on contract. The new deadline has been set at July 15.
Under the agreement with the TCP, Ali Syed, who is representing a Chinese company in Pakistan which was given two separate import contracts worth $100 million to import 200,000 metric tons of sugar, was supposed to nominate a ship by July 5 and subsequently hand over schedule of consignments to the trading body. But, as earlier predicted by market forces about the inability of the Chinese to provide sugar at such low rates, the company failed to provide name of ship on Monday and rest of schedule for shipment purpose to Pakistan which had jolted the whole market. This failure has already created panic in the TCP ranks, which is under fire for its failure to giving a contract to a company which did not have required experience in the field of import of sugar. The TCP has been held responsible for dramatic rise in sugar prices in recent weeks.
Earlier Ali Syed, the son in law of former defence secretary Saleem Abbas Jilani, has got two separate sugar import contracts worth $100 million after he shook the whole import sugar market by quoting almost $150,200 per ton less rate than prevailing market rates.
The TCP had awarded the contract to Ali Syed after he quoted the lowest ever rate of $488 per metric ton. This low price had simply played havoc with rest of bidders as they were never in the range of this price as the Chinese company had only demanded $20 per ton shipment cost against the market rate of $100-150 per ton.
Talking to our sources, TCP Chairman Anjum Bashir confirmed that the Chinese firm had not met the deadline of July 5 to provide the details of the shipment. But, he said, under the rules, ten days were given to the firm after imposing penalty. He said that if the company failed to meet the extended deadline of July 15, he would cancel the contract.
Ali Syed told our sources that this was true that July 5 deadline was not met and now the company was expected to give new schedule of shipment by July 17. He said the company representatives were already in Brazil to arrange the ship and were very serious to execute his multimillion dollar deal. He said: â€œEven if we have to give more time to Chinese firm, we should give them because this single deal would save $10 million to Pakistan and this was not an ordinary amount. He hoped that his Chinese partners would meet the new deadline by July 17.