ISLAMABAD: The Ministry of Finance has reportedly given no objection to the import of sugar subject to the condition that no financial liability shall arise on the part of federal government as a deal is finalized with Azerbaijan’s SOCAR.
The Finance Division has stipulated that the subsidy implication of proposed import of sugar may be borne by the respective provinces for which a prior firm commitment may be obtained.
Moreover, keeping in view, large amount of TCP receivables against the provinces for the past import operations, the payment may be made by the provinces to TCP on upfront basis to avoid undue accumulation of markup and receivables for TCP.
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The Finance Division has also advised that the proposed import of sugar shall be carried out in staggered manner, aligned with the domestic price stabilization goals and assessed domestic demand as and when required.
“A robust regulatory framework shall be introduced to track the quantity, pricing and distribution of imported sugar to ensure that the proposed objectives are fulfilled,” the sources said adding that a revised Cash Credit Limit (CCL) for this quarter amounting to Rs 461,477.222 million to TCP has been issued by Finance Division keeping in view the import of 500,000 MT of sugar for which TCP requires an additional Rs. 115 billion.
The sources further stated that the Federal Cabinet has approved import of sugar from SOCAR due to emergency situation on the recommendations of Special Committee headed by Senator Ishaq Dar, Deputy Prime Minister.
According to Ministry of National Food Security and Research, at the time of closure of the crushing season 2024-25, it was observed that the sugar stocks in the country, including the 500,000 MT buffer stock of previous year, would be barely enough for meeting the domestic requirement before start of the next sugarcane crushing season.
The stockists and the hoarders started to take advantage of the tight stock position and a sharp increase was observed in the sugar prices in the country.
The government immediately initiated administrative measures to ensure the supply chain a smooth working without any bottlenecks. However, in order to replenish domestic stock Ministry of National Food Security initiated a summary for import of 500,000 MT of sugar.
The task of importing was assigned to the Trading Corporation of Pakistan (TCP). The first tender was floated on 10th July and the bids were opened on 22nd July, 2025. Two firms submitted their refusals due to terms and conditions, so practically no bid was received.
In view of the situation, the Steering Committee (established to facilitate the import process), in its meeting held on 23rd July, 2025 decided to issue another tender with revised terms and conditions to seek fresh interest from the suppliers.
During the meeting the Trading Corporation of Pakistan noted that beside the tendering they have also approached potential suppliers from different countries for G2G supplies.
Azerbaijan’s SOCAR responded positively and submitted proposals for supply of 100,000 MT of medium grain sugar @ $ 570/MT at Karachi and $ 575/MT at Gwadar Port. TCP was directed to negotiate a possible reduction in the rate offered by SOCAR.
On July 31, 2025 the Committee under the chairmanship of Deputy Prime Minister, reviewed the procurement process. The TCP informed that they have received four bids against the 2nd tender for supply of sugar but three of the bidders did not meet the price and the crystal size of the grains given in the tender documents. So, they were declared as ineligible, whereas one qualified bidder has quoted the price of $ 599/MT (which is way above the offer of the SOCAR).
After detailed discussion, the Committee directed TCP to once again negotiate with SOCAR for further price reduction and also to reduce the supply timelines.
The Chairman, TCP informed the Committee that they have already re-negotiated the price with SOCAR which has offered a revised rate of $ 559/MT for order of 100,000 MT and the price would be reduced if order is enhanced to 200,000 MT, bringing down the rate to $ 558/MT at Karachi Port.
After detailed discussions and analyses of the tendering process and the offer of SOCAR, the Committee directed that the following recommendations may be placed before the Cabinet for its consideration/approval: (i) given the emergency situation of possible shortages of sugar in the country and the fact that the two tenders floated for the supply of sugar were non-responsive and the rates. offered by SOCAR being competitive, MNFSR shall invoke the provisions of alternate method of procurement provided under Section-42(c)(v) of PPRA Rules-2004, to enable TCP to procure 200,000 MT sugar from SOCAR with first shipment of 100,000 MT arriving Karachi before September 30, 2025 and to ensure the arrival of another 100,000 MT by mid of October, 2025; (ii) Cabinet may extend the deadline of FBR’s SROs No. 1215(1)/2025, 1216/2025 and 1217(1)/2025 of July 8, 2025 from September 30, 2025 to November 30, 2025 to cover the arrival of the 2nd consignment tax free and; (iii) in order to keep the cost of import at reduced level, exemption may be granted from 60% mandatory landing requirement of government consignments at Gwadar Port as per Cabinet Decision of September 12, 2024.
According to sources, the Cabinet accorded the approval on a summary of Ministry of National Food Security and Research through circulation. The Cabinet Division has also sought implementation status of its decision.
