TCP seeks sugar export bids at $660/tonne despite lower global prices; bidder interest at risk

Profit reports that the Trading Corporation of Pakistan (TCP) has put a floor of $660 on each tonne offered in its sugar export tender, a level at least $130 above current overseas quotes for refined white sugar. The tender, issued on September 6, covers 107,739 metric tonnes stored at the Pipri godown in Karachi, split into 11 lots. Bidders must quote in dollars per tonne, though those using the e-Pak Acquisition and Disposal System may bid in rupees converted at Rs280 per dollar.

Profit says white refined sugar trades internationally near 510-520 dollars per tonne, leaving the reserve 140-150 dollars higher, and the report sees that gap as a possible hurdle for bidders. The sugar was brought in last year as a safeguard against local supply gaps. Even so, TCP has eased several conditions: the bid deadline was pushed back two days to 3 pm on September 30, and earnest money fell from 10% to 2%, cutting the deposit per lot to Rs36.96 million from Rs184.8 million.

Winning bidders must pay in full, either in advance or by a sight letter of credit, in foreign currency through banks. They then get 45 days from award to lift the whole quantity. Unlifted and unpaid lots attract a carrying charge of Rs2 per kilogram per month after the deadline, and TCP could terminate the agreement and forfeit the performance guarantee.