KARACHI: The State Bank of Pakistan (SBP) on Friday directed banks to process cases from eligible sugar mills for the export of 200,000 metric tonnes of sugar in accordance with their mill-wise quotas against sight letters of credit or advance payments.
Following the federal government’s directives, the SBP allowed banks to process sugar export cases and issued the relevant terms and conditions governing such exports.
In September, the Economic Coordination Committee (ECC) of the Cabinet approved the export of 200,000 metric tonnes of sugar subject to certain terms and conditions. Subsequently, the Ministry of National Food Security and Research (MNFSR), in coordination with the Pakistan Sugar Mills Association (PSMA), issued operational modalities for the implementation of the sugar export quota.
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To facilitate the commencement of sugar exports, the SBP on Friday has advised Authorised Dealers (banks) to process requests from eligible sugar mills for the export of 200,000 metric tonnes of sugar, subject to fulfilment of the prescribed terms and conditions.
SBP has directed the banks to ensure that FI issuance requests of exporters are processed in accordance with the mill-wise quota allocated by the PSMA.
Under the terms and conditions for sugar exports, the State Bank has stipulated that exports shall be made against a sight letter of credit or advance payment. The central bank has also specified that sugar shipments shall be made exclusively by sea.
The SBP has not prescribed any specific deadline for shipment. However, export proceeds against letters of credit must be realised within the regulatory time period prescribed by the state bank.
Banks will be required to submit details of sugar export transactions and shipment updates to the SBP on a weekly basis, using the prescribed reporting format, by 4:00 pm every Friday.
The SBP has also directed banks to conduct due diligence on the transactions and satisfy themselves regarding the bona fides of the clients and underlying transactions in accordance with applicable regulations.
It may be mentioned here that the export quota of 200,000 metric tonnes of sugar has been allocated among the 79 sugar mills of all provinces. Mill-wise allocation of sugar export quota has been worked out on the basis of sugarcane crushed.
Copyright Business Recorder, 2026
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