First-come-first-served rule for surplus sugar export: SBP

The State Bank of Pakistan (SBP) said on Thursday that export quota to sugar mills would be allocated on first-come-first-served basis and only surplus stock certified by the concerned Cane Commissioner would be allowed to export. As the Ministry of Commerce through a memorandum No. 7(2)/2012-Exp.III has allowed sugar mills to export 225,000 metric tons sugar, the SBP has asked authorised dealers (ADs) to process the export of sugar cases.
According to SBP's EPD Circular Letter No. 01 of 2017, ADs will forward the requests of sugar mills through their respective Departmental/ Business/Group Heads to the Director, Exchange Policy Department, State Bank of Pakistan, Karachi, for approval along with the attested/authenticated copies of required documents including sugar export contract, manual Form-E and irrevocable L/C or advance payment voucher.
Clearance issued by the concerned Cane Commissioner will certify that concerned sugar mill has cleared outstanding dues of the farmers up to the last season and has started crushing at full capacity. The concerned Cane Commissioner shall also certify the quantity (in MT) of surplus sugar available with the concerned sugar mill for export during the current season.
As per procedure, export will be allowed only from surplus sugar available with the concerned sugar mill during the current season as certified by the concerned Cane Commissioner and it will allocate sugar export quota to sugar mills on first-come-first-served basis.
SBP has said that ADs will ensure receipt of a minimum 15 percent of total contract value as advance payment (evidenced by advance payment voucher, swift message and reporting schedule/credit advice) or obtain an irrevocable L/C from the buyer. All exports including those destined for Afghanistan and Central Asian Republics will also be subject to receipt of export by wire transfer through banking channel.
In addition, exporter must ship the sugar within 45 days from the date of SBP approval regarding quota allocation or by March 31, 2017, whichever comes earlier. SBP has clarified that there will be no export rebate/cash support on freight for the export.
In case of non-performance within the stipulated time against the quota allocated by SBP, ADs will recover a penalty of 15 percent of total contract value from the exporter and deposit the same with the Exchange Policy Department, State Bank of Pakistan, Karachi through DD/PO in favour of Government of Pakistan.
Prior permission from SBP will be required for return of advance payment received there from the importer. ADs have been advised to submit sugar export shipment update to the Director, Exchange Policy Department SBP on weekly basis as per the reporting format. SBP said that incomplete requests shall not be considered.