Pakistan: SBP revises instructions for sugar exports
Pakistan’s State Bank revised export quotas for 200,000 tonnes of sugar, allowing eligible mills in Punjab and Sindh to process shipments under updated conditions. Khyber Pakhtunkhwa’s allocation remains pending confirmation. Banks must verify transactions, accept sight letters of credit or advance payments, and submit weekly export reports.
KARACHI: The State Bank of Pakistan (SBP) has revised its instructions for sugar exports, sharing updated province-wise and mill-wise export quotas and directing banks to conduct due diligence on export transactions to verify the bona fides of clients and the underlying transactions in accordance with applicable regulations.
Following the revision of province-wise and mill-wise sugar export quotas by the Ministry of National Food Security and Research (MNFSR), based on information received from the Pakistan Sugar Mills Association (PSMA), and the correction of the names of three sugar mills, the SBP has issued revised instructions for the export of 200,000 metric tons of sugar.
The Government of Punjab and Government of Sindh have already endorsed the revised quotas of sugar mills located in their respective provinces. While the endorsement from the Government of Khyber Pakhtunkhwa (KPK) is still awaited.
Accordingly, SBP has advised the banks to process the export transactions of eligible sugar mills of Punjab and Sindh as per their revised quotas, subject to the conditions issued by the SBP.
Under the conditions for sugar exports, the SBP has stipulated that exports must be made against a sight letter of credit or advance payment, with shipments allowed only by sea, however no shipment deadline has been specified.
Export proceeds against letters of credit must be realised within the regulatory period prescribed by the SBP.
The state bank has also directed authorised dealers to submit weekly reports on sugar export transactions and shipment updates to the Director, Foreign Exchange Operations Department (FEOD), SBP-BSC, every Friday as per prescribed reporting format.
The SBP has clarified that the revised sugar export quota endorsed by the Khyber Pakhtunkhwa (KPK) government will be communicated upon receipt of confirmation from the MNFSR. Accordingly, authorised dealers will be allowed to process sugar export transactions of eligible mills located in KPK only after receiving the required confirmation.
In addition, SBP has directed the banks to perform appropriate due diligence of the sugar export transactions and satisfy themselves with the bona fides of the client and underlying transaction in line with the applicable regulations.
Banks are also advised to ensure meticulous compliance with the above instructions and the conditions stipulated in the enclosed Office Memorandum of MNFSR.
It may be mentioned here that the Cabinet Committee on sugar export decided that the export allocation among sugar mills will be strictly on provincial quota based, determined according to their verified crushing season capacity/performance and the ministries shall not get involved in this matter. Therefore, banks are required for implementation of the Federal Cabinet decision for export of 200,000 metric tons of sugar.
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Source : Brecorder
