Karachi, July 2, 2024 (PkRevenue.com) – The State Bank of Pakistan (SBP) on Tuesday issued detailed guidelines to banks for processing requests related to the export of sugar.
These directives follow the Economic Coordination Committee (ECC) of the Cabinet’s approval to allow the export of 150,000 metric tons (MT) of sugar under specific terms and conditions.
In a communication to banks and authorized dealers (ADs), the SBP highlighted the Ministry of Industries and Production’s Office Memorandum (O.M) F. No.1(6)/2022-23-CAO dated June 26, 2024. The ECC’s decision, outlined in Case No. ECC-116/12/2024 dated June 13, 2024, was ratified by the Federal Cabinet in its decision Case No. 181/22/2024 dated June 25, 2024.
The SBP’s guidelines to ADs for processing sugar export requests include several critical requirements:
1. Quota Allocation Proof: ADs must obtain and keep a record of the allocation quota issued by the respective Provincial Cane Commissioner.
2. Export Undertaking: Exporters must provide an undertaking that the consignment will be shipped within 45 days from the date of quota allocation.
3. Advance Receipt of Export Proceeds: ADs must ensure that 100% of the export proceeds are received in advance from the buyer through the normal banking channel before the shipment, based on a valid sales contract.
4. Weekly Reporting: ADs are required to submit weekly updates on sugar export transactions and shipments to the Director of the Foreign Exchange Operations Department (FEOD), SBP-BSC, Head Office, Karachi.
These new instructions supersede the earlier guidelines contained in EPD Circular Letter No. 06 dated January 30, 2023. The SBP emphasized the importance of meticulous compliance with these guidelines and advised ADs to disseminate the instructions to all relevant parties.
The ECC’s decision to allow the export of sugar comes as a measure to manage surplus sugar stocks in the country and support the local sugar industry. By ensuring that export proceeds are received in advance, the SBP aims to safeguard the financial interests of Pakistani exporters and maintain a stable flow of foreign exchange.
The SBP’s proactive stance and clear directives are designed to streamline the export process, ensuring that all stakeholders adhere to the regulatory requirements. This move is expected to facilitate smoother sugar export operations, contributing positively to Pakistan’s trade balance and economic stability.
As the sugar export season progresses, the SBP and relevant authorities will continue to monitor compliance and address any issues that arise to ensure the successful execution of the ECC’s export allowance decision.
