The company, after outbidding the refiners through quoting low prices of the essentials, now faces performance-guarantee forfeiture while TCB's open-market sale (OMS) operation sees severe disruptions due to supply shortages, officials said.
Last June, Gemcon Food and Agriculture Products Ltd won two bids for supplying 3.0 million litres of soybean oil in two-litre bottles and also 2,000 tonnes of lentils.
In this case, the company beat a group of long-time suppliers like Meghna Edible Oils Refinery Ltd, City Edible Oil Ltd, Super Oil Refinery Ltd, Bashundhara Multi Food Products Ltd, and Shun Shing Edible Oil Ltd.
This fiscal year, Gemcon Food again won two bids to supply 3.5 million litres of soybean oil and 5,000 tonnes of sugar.
Usually, only the companies having refineries had been supplying essential commodities to the TCB that has been carrying out OMS rationing of some most essential goods under government's market intervention to offset impact of steep price rises on commoners' living.
However, early this year, the Ministry of Commerce had decided to give chance to traders having no refineries to participate in the tender process for supplying any item to the corporation.
The new provision created scope for traders like Gemcon Food, Mas Corporation and M/s Priom Enterprise, and some other companies to beat many big shots who dominate business.
However, the companies having refineries were sceptical as to whether traders like Gemcon Food will be able to supply the items finally to the TCB as they quoted "relatively low" prices.
Finally, Gemcon Food and two other traders could not deliver the goods and cited pandemic-linked global supply-chain disruptions and price hike of commodities behind their failures.
On their plea, the companies were given extra time several times but they could not make it until October 15.
As such, the TCB board of directors in a meeting on October 24 decided to do away with the deals and encash the performance-guarantee check the companies had submitted to the corporation.
TCB Chairman Brigadier-General Ariful Hassan said the trading companies were given adequate time but they couldn't supply the commodities the state trading agency now needs most to tame an overheated market.
But, he said, one or two companies having no refinery could supply sugar and lentils to the TCB as per the agreements.
"Our efforts to include traders as supplier to the TCB have become successful to some extent," he told the FE Friday over the phone.
TCB Director and commerce ministry Additional Secretary A H M Shafiquzzaman said Gemcon Food could not supply as the prices of the items have gone up significantly on the international market for pandemic-linked troubles.
They could have incurred huge financial losses if they had supplied the items, he said about the upset.
Amid the situation, while the TCB already started the procedure of encashing performance guarantee, the Gemcon Food authority in a letter to the commerce secretary Wednesday requested time extension until January 2022 to supply the items.
In the letter they cited the pandemic as main reason for their failure and said they would be able to supply the commodities at agreed prices though their present global prices are much higher.
Gemcon Group's Chief Financial Officer, Captain (retd) ZA Zakir, told the FE his company had participated in tenders after ensuring the supply sources.
The company was confirmed by suppliers in Malaysia and Singapore about delivery of soybean oil, he said.
"But the severe lockdown in Malaysia had paralysed their banking, transportation, and production systems and thus we could not import oil from there," Mr Zakir said and added that other sources were also explored but meantime the prices had gone up steeply.
Now the company could manage four dependable suppliers in Brazil and wants to deliver oil to the TCB though it will cause financial loss to Gemcon Food, he said.
If the commerce ministry gives Gemcon some more time, the TCB's effort to break the refiners' dominance will be successful, he added.
syful-islam@outlook.com