KARACHI: Following the directives of the federal government, the State Bank of Pakistan (SBP) has allowed 15 days extension for shipment of sugar export consignments.
On the demand of the sugar mills, the Economic Coordination Committee (ECC) of the Cabinet, in its meeting held on July 13, 2024, allowed export of 150,000 metric tons of sugar with certain terms and conditions.
As per term and conditions issued initially, sugar mills were required to submit an undertaking to the bank that consignment would be shipped within 45 days from the date of quota allocation.
Sugar export: 100pc receipt of export proceeds in advance made mandatory
In this regard, as per the Ministry of Industries and Production’s Office Memorandum (O.M) F. No. 1(6)/2022-23-CAO dated September 04, 2024, the Federal Cabinet has approved fifteen (15) days extension in the forty-five (45) days’ time period already allowed for shipment of sugar export consignment.
As per fresh directives, for the unutilized export quota of sugar mills from Punjab, fifteen (15) days effective from the date of issuance of this decision of the cabinet, while for other Provinces, the extension period will commence from the date of allocation of quota by the Provincial Cane Commissioner.
According to the SBP, this extension in shipment period will not be applicable on sugar mills, which have failed to use export proceeds for payment to growers.
The SBP has advised Authorized Dealers to bring fresh additional instructions to the knowledge of all their constituents and ensure meticulous compliance there against.
The State Bank has asked banks to ensure 100 percent receipt of export proceeds in advance from the buyer abroad through the normal banking channel, before the shipment takes place, based on a valid sales contract.
In addition, Authorized Dealers will obtain proof of allocation of quota by the respective Provincial Cane Commissioner and keep a copy of the same in their record. ADs will also obtain an undertaking from the exporters that consignment would be shipped within 45 days from the date of quota allocation.
In order to ensure price stability in the domestic market, Pakistan Sugar Mills Association (PSMA) has provided an undertaking that ex-mill prices will not increase beyond Rs.140 per kg and the ex-mill price as well as market price of sugar shall be monitored by the Provincial Authorities. If the retail price of sugar rises beyond the benchmark price plus Rs 2.00 per kilogram then the Sugar Advisory Board will immediately revoke permission to export.
Copyright Business Recorder, 2024
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