Banks can process exports under revised quotas for eligible sugar mills in Punjab and Sindh, while Khyber Pakhtunkhwa’s approval remains pending.
KARACHI: The State Bank of Pakistan (SBP) has revised instructions for the export of 200,000 metric tonnes of sugar, allowing authorised banks to process export transactions under revised quotas for eligible sugar mills in Punjab and Sindh.
In a circular issued to presidents and chief executives of authorised dealers in foreign exchange, the central bank referred to its earlier EPD Circular Letter No. 14 dated October 2, 2026, concerning the export of 200,000 tonnes of sugar.
The SBP said the Ministry of National Food Security and Research (MNFSR), through an office memorandum dated October 9, 2026, had communicated revised province-wise and mill-wise export quotas received from the Pakistan Sugar Mills Association (PSMA).
The ministry also conveyed corrections to the names of three sugar mills following a subsequent PSMA letter dated October 8, 2026.
According to the circular, the governments of Punjab and Sindh have endorsed the revised quotas for sugar mills operating in their respective provinces. However, endorsement from the Khyber Pakhtunkhwa government is still awaited.
Authorised dealers may therefore process export transactions for eligible mills in Punjab and Sindh according to their revised quotas. Mills in Khyber Pakhtunkhwa will become eligible for processing under the revised quotas once the required government endorsement is received through the ministry.
Conditions for sugar exports
The SBP has specified several conditions that authorised dealers must observe while processing sugar export transactions.
Exports must be made against a sight letter of credit or advance payment, while shipments must be transported exclusively by sea. The circular states that there will be no shipment deadline.
Export proceeds against letters of credit must be realised within the regulatory period prescribed by the SBP.
Authorised dealers are also required to submit weekly reports covering sugar export transactions and shipment updates to the Director of the Foreign Exchange Operations Department (FEOD), SBP Banking Services Corporation, at its head office in Karachi.
The reports must be emailed every Friday by 4:00pm, using the prescribed format provided in Annexure A.
Banks directed to ensure compliance
The central bank has directed authorised dealers to conduct appropriate due diligence and satisfy themselves about the bona fides of clients and underlying transactions in accordance with applicable regulations.
Banks must also ensure full compliance with the revised instructions and the conditions specified in the ministry’s accompanying office memorandum.
The SBP said the revised quotas for eligible sugar mills in Khyber Pakhtunkhwa would be communicated once the required endorsement was received from the provincial government through the MNFSR.