Commodity News Snapshot-Pakistan

Floods cause Rs 17 billion losses to Khyber Pakhtunkhwa livestock, agriculture sectors

PESHAWAR (September 01, 2010): Heavy torrential rains and devastating floods caused a loss of Rs 5.344 billion to livestock and Rs 12.139 billion to agricultural sectors of Khyber Pakhtunkhwa province, respectively. Briefing media here at Chief Minister's House on Tuesday, provincial minister for Information, Mian Iftikhar Hussain said that statistics gathered from various districts showed a total of 94,924 cows and bulls were affected and 29,081 died in the floods which worth Rs 1.769.billion.

Who to blame for sugar price hike?

ISLAMABAD (September 01, 2010): Sugar prices are hovering at around Rs 90 per kg and it is difficult to determine which of the key players is to blame: the government, including TCP, the sugar mill owners, the stockists, the wholesalers, or the retailers. Background interviews with officials and private sector stakeholders, however, do establish the fact that sugar price is at an artificially high level and someone is making windfall profits during Ramazan.

TCP opens two LCs for 0.32 million tons of sugar import

KARACHI (September 01, 2010): The Trading Corporation of Pakistan (TCP) has established two Letters of Credit (LCs) worth $243 million for import of 320,000 tons of white refined sugar. Sources told Business Recorder on Tuesday that with the opening of two LCs it is expected that first shipment of sugar would reach Pakistan in mid-September.

Sindh government lifts ban on inter-district wheat movement

KARACHI (September 01, 2010): The Sindh government has withdrawn Section 144 on the movement of wheat in the province to deal with the expected shortage of the commodity in the flood hit districts, Business Recorder has learnt. It may be mentioned here that the Sindh government, couple of month's back, had imposed Section 144 on the wheat movement at the joint borders of Sindh-Punjab-Balochistan and within the province to avoid smuggling of the commodity

Rice farmers, cotton millers: Zardari for special credit package

KARACHI (September 01, 2010): President Asif Ali Zardari has held a meeting with the representatives of rice growers and cotton ginning millers at Chief Minister's House here on Tuesday to discuss the extent of damages to rice and cotton crops due to recent floods and examine the ways and means to retrieve the losses and help recover the lost ground.

PSMA (Punjab) calls for import of raw sugar

LAHORE (August 31, 2010): Pakistan Sugar Mills Association (PSMA - Punjab) Chairman Javed Kayani has laid emphasis on the import of raw sugar to meet the demand in coming season. Kayani in a letter written to the Secretary Food Punjab said shortage of food is likely to aggravate as about twelve districts in Punjab have been inundated by the flash floods, damaging crops badly.

Who to blame for sugar price hike?

Sugar prices are hovering at around Rs 90 per kg and it is difficult to determine which of the key players is to blame: the government, including TCP, the sugar mill owners, the stockists, the wholesalers, or the retailers. Background interviews with officials and private sector stakeholders, however, do establish the fact that sugar price is at an artificially high level and someone is making windfall profits during Ramazan.

"The government is unable to control the rising price of sugar, which is as high as Rs 90 per kg in some parts of the country. The large stockists, who purchased sugar from mills and stocked it in their respective mills, are to blame," said an official who has been closely monitoring the sugar situation. The Cabinet, which is scheduled to meet on Wednesday, is expected to take up the issue of rising sugar price.

The Ministry of Industries and Production (MoI&P) which according to the Rules of Business is also responsible for taking measures to keep prices of essential items at a reasonable level is not accepting any responsibility for the price hike. Some officials of MoI&P told this correspondent that it is the responsibility of provincial governments to have check on prices through administrative measures and not that of the federal government.

The Pakistan Sugar Mills Association (PSMA), which was invariably blamed for manipulating sugar prices in the past, claimed that the industry sold 95 percent of sugar stocks at low rates and the current high price does not benefit the mill owners. "The failure of Trading Corporation of Pakistan (TCP) to import sugar well in time has increased market prices. Mills have hardly any stocks. Prices will stabilise if and when TCP sugar arrives," said PSMA Chairman Iskandar Khan while talking to Business Recorder. However, TCP Chairman Anjum Bashir, who was present in the federal capital on Tuesday, acknowledged that the delay of sugar import might have contributed to its current high price.

"I do not agree that it was TCP's failure; I will rather say that delay in sugar import is one of the reasons for the increase in its price," he added. Lengthy process due to procurement rules in addition to delay in release of funds by the Finance Ministry are the main reasons for the delay in shipment as TCP cannot open LC without funds, he added.

He, however, itemised several other reasons which, he claimed, contributed to an increase in sugar price including higher rates of transportation, destruction of infrastructure due to the floods, excessive oil prices in flood-hit areas and disordered distribution of sugar among the affectees. TCP Chairman said that the provincial governments had picked up only 40 percent of sugar from the TCP so far, which implies that they have sufficient stocks.

In previous meetings of the Cabinet and the ECC, some Cabinet members expressed reservations over the delay in sugar import and demanded a formal probe to establish responsibility. These members will also be present in the cabinet meeting when this issue will come under discussion on Wednesday.

The Cabinet is also expected to ratify the decision taken by the Economic Co-ordination Committee (ECC) on July 20 and 29, 2010. On July 29, the ECC had directed the TCP to complete the ongoing sugar import process of 5,75,000 tons including the already arrived quantity of 2,64,000 tons and make all possible efforts to open tenders of the advertised quantity of 3,75,000 tons of sugar.

TCP implemented the decision of the ECC but it was not provided the required funds to open LCs despite the fact that the ECC asked the Finance Ministry to arrange funds for TCP immediately so that LCs for the tenders could be opened on July 31, and August 7, 2010, respectively.

The ECC had also decided that 100,000 tons of sugar, imported by TCP, would be offloaded in the open market at import price through provincial mechanism starting from July 28, 2010. The provinces were required to arrange payment through their selected dealers as they lift the stocks from TCP well before Ramazan. After completion of the current sugar import process the market forces would be allowed to prevail and the private sector would be encouraged to import sugar.

Copyright Business Recorder, 2010

Floods cause Rs 244.6bn loss to agri sector: MinFA

* Small farmers suffer loss of Rs 98bn, while some face total annihilation of their crops
ISLAMABAD: The devastating floods across the country have caused damage worth Rs 244.6 billion to the agriculture sector with maximum losses suffered by the small farmers of around Rs 98 billion, while some facing total annihilation of their crops.

This was revealed in the initial estimate prepared by the Ministry of Food and Agriculture (MinFA) on Monday in coordination with the provincial governments and Azad Jammu and Kashmir (AJ&K) government. However, the estimate prepared by the MinFA has also said that the agriculture loss could be higher in Southern Punjab and some parts of Sindh as clear pictures from many areas have yet not been received. The ministry has said that maximum damage by the floods has been made to the minor crops of Kharif season, which includes jawar, maize, moong and mash pulses and some citrus fruit varieties. “The most upsetting thing is that the minor crops are mainly cultivated by small farmers and in areas where growers have small land holdings,” said a senior official of the MinFA. “This loss is the most serious setback for the farming community because most of the small farmers have lost considerable number of livestock too as they had limited facility for their animals.” Among the major cash crops the ministry’s report highlighted that the largest loss of Rs 71.4 billion has been faced by the cotton crop.

Cotton was sown over 3.1 hectares in the current Kharif season out of which the floods have destroyed crops at 0.51 million hectares, as a result the production is expected to decline by almost 15 percent to 11.7 million bales as against the targeted cotton production of 14 million bales in 2010.

The Minister for Food and Agriculture Nazar Muhammad Gondal has said that Pakistan will face serious cotton shortage in coming days as more than 15 percent of the crop has already been hit by the floods.

“Two million bales have been destroyed in the floods in Punjab alone and we have yet to receive the complete details,” the minister added. The cotton crop has been seriously damaged in Bakkhar, Layyah and Mianwali districts apart from many other areas in southern districts of Punjab, while the left bank of River Indus in Sindh is the cotton belt and the cotton crops have suffered in Sukkur, Khairpur, Ghotki, Naushero Feroze and Benazirabad districts. The paddy crops in the country have faced a loss of Rs 56.3 billion and the worst hit areas are right bank districts of Sindh.

The countrywide paddy production is expected to decline by around 27 percent to 4.35 million tonnes as against the original estimated production of 5.95 million tonnes. Among the major crops, sugarcane farmers have suffered a loss of Rs 19.3 billion and its production is expected to decline to 47.23 million tonnes as against the estimated production of 54.83 million tonnes.

Pakistan Sugar Mills Association (PSMA) Chairman Iskander khan said that the initial reports suggest that the sugar cane crops in Charsadda, DI Khan and some parts of Southern Punjab have suffered damages. He said that 4 million tonnes of sugar production was expected in the coming season but now 3.8 million tonnes is likely to be obtained. The MinFA has estimated that the other serious issue faced by the country in the near future would be shortage of vegetables.[DailyTimes]