KARACHI: The Trading Corporation of Pakistan has failed to attract foreign buyers in its super basmati tender while local bids remained below the benchmark.
The TCP in its recently called international tender for sale of 25,000 tonnes Super Basmati rice crop 2008-09, has received bids only from domestic traders which too are below the prevailing domestic and international market rates of Super Basmati while foreign rice importers or procurement agencies did not participated in the tender opened on January 21, 2010.
Only two domestic traders offered highest bids of $812 per tonne for each quantity of 1,000 tonnes while the lowest bid for 4,000 tonnes was at $561 per tonne.
Another trader has conditionally offered $805 per tonne for the entire quantity of 25,000 tonnes subject to lifting of stocks in 90 days and without depositing pay order of 5 percent bid money, equivalent to Rs85.531 million, which is a breach of conditions laid down in the tender documents and disqualifies the bidder.
Many bidders offered bids in Pak rupees ranging between Rs45,000 to Rs52,475 per tonne, almost 50 percent below the cost of TCP despite of clear condition of tender price which should be quoted in US dollar. As per ECC decision of its meeting held on 27 October, 2009, TCP was clearly directed “to expedite measures to export rice stocks held with TCP.”
Shamsul Islam Khan, an experienced rice exporter told The News that participation of domestic traders in rice tender was a sign that local market prices were increasing but no interest from foreign buyers proved that export dynamics of Basmati have changed and private sector rice exporters had full advantage of quality assurances over the public sector.
He said tender price evaluation committee of TCP would surely consider the price offered, which was too low and if tender was awarded at that price, TCP would suffer a loss of up to Rs1 billion and traders.
Another rice exporter said on the request of anonymity that the TCP after incessant failure to attract any foreign rice importer or governments buying agencies should realise that export of Basmati rice was not its business and it should be left to the private sector exporters who know importers’ requirements.
Shamsul Islam Khan said Rice Exporters Association of Pakistan (REAP) stood against intervention of the public sector in rice trade. “Public sector intervention in rice has never proved fruitful rather it has caused losses to the national exchequer as added financial burden,” he said.
The country was passing through a critical economic situation and role of public sector in business should be eliminated to minimize losses incurred by state owned corporations as burning of the taxpayer money could not be praised by any one, he said. “Rice procurement didn’t helped paddy growers, consumers or exporters but opportunists and traders had always minted money through such moves.”
Pakistani rice exports have now established themselves in global markets, they have entered a matured phase and country is reaping benefits of earning more foreign exchange, Khan said.
“Time has come to effectively use marketing tools and promote our rice around the world particularly in non traditional markets.” He suggested that the government should support private sector in launching marketing campaigns, most importantly taste development campaigns in China, Central Asian Countries and other rice eating nations. “This will help us to export more quantities of Pakistani rice which will ultimately help grower to get better price of their produce. It is the private sector who motivated and encouraged paddy growers to grow more paddy and had invested billions in modern milling,” he said.
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