Pakistan Surplus Sugar Tender Draws Zero Bids as Reserve Price Overshoots World Market
The government’s bid to sell surplus sugar abroad ended without a single offer. The Trading Corporation of Pakistan (TCP) floated an export tender for 107,739 metric tons of imported white refined sugar, but the Pakistan surplus sugar tender opened on September 30 and closed with zero bids.
The reserve price was the deal breaker. TCP set a uniform reserve price of $660 per metric ton. White refined sugar was trading at $505 to $515 per metric ton on the international market. The gap of $145 to $155 per ton left exporters with no commercial case for the stocks.
Why the Pakistan surplus sugar tender found no buyers
The maths never worked for the trade. TCP priced the sugar at Rs184,800 per metric ton, based on an exchange rate of Rs280 to the dollar. The 11 lots carried a combined reserve value of Rs19.91 billion, or $71.1 million.
TCP tried to pull in participants. It extended the bid submission deadline from September 28 to September 30. It also cut the earnest money requirement from 10 percent to 2 percent, which lowered the security deposit per lot from Rs184.8 million to Rs36.96 million. The relaxations changed nothing. Not a single trader submitted a bid.
The sugar was offered on an Ex Works basis from TCP’s Pipri Godown in Karachi. Bids were to be quoted in US dollars per metric ton through the e-Pak Acquisition and Disposal System, with payment in foreign exchange through authorised banking channels.
How Pakistan ended up with surplus sugar
The stocks were imported last year to meet domestic demand after retail sugar prices rose sharply. The government approved large-scale imports to steady the market and protect consumers. But domestic demand never absorbed the full quantity, and the stocks became a surplus.
TCP had planned to export the sugar before the next crushing season begins in November. The failed tender now puts that timeline under pressure. The corporation also faces pressure to clear inventories and trim financing costs in the last quarter of the year.
What happens next
The government must now decide how to dispose of the stocks. It could re-tender with a lower reserve price, change the terms, or look for other routes to move the sugar. Until the asking price moves closer to world levels, exporters are unlikely to bite.
The episode also shows the wider challenge of state commodity trading. Buying to cool prices and selling into a weaker market leaves the exchequer carrying the difference. TCP will need a fresh plan before the November crushing season adds new supply to the picture.
How much sugar was up for sale?
107,739 metric tons of imported white refined sugar, split into 11 lots, stored at TCP’s Pipri Godown in Karachi.
Why did the tender fail?
The $660 per metric ton reserve price stood roughly $150 above international prices, which made the deal commercially unattractive to exporters.
What is TCP?
The Trading Corporation of Pakistan is the state trading agency that handles government imports and exports of commodities such as sugar and wheat.
When does the crushing season start?
The next sugarcane crushing season begins in November, which set the deadline for exporting the surplus stocks.
