SBP issues sugar export mechanism

KARACHI: The central bank on Tuesday issued mechanism for the process of one million metric tons of sugar exports.

The government on October 18, 2018 allowed sugar mills to export one million metric tons of sugar on certain conditions.

To comply with the government decision, the State Bank of Pakistan (SBP) has directed banks to adhere with the prescribed mechanism.

The banks have been directed to ensure that sugar mills submit clearance certificate issued by the cane commissioner concerned regarding the clearance of outstanding dues of the farmers for the sugarcane crop up to 2017/18.

Further, after November 15, 2018, the clearance certificate would also certify that the sugar mill concerned has started crushing at full capacity, the SBP said.

The banks have also been directed to ensure that those sugar mills, which want to export the produce, were not defaulter to any bank in Pakistan. The sugar mills are required to submit export contract, besides electronic export form for online web Customs clearance.

The central bank also said Foreign Exchange Operations Department (FEOD) would allocate sugar export quota to sugar mills on first come first served basis.

There will be no freight or financial support by the federal / provincial governments for export under the above scheme, it added.

All exports, including those destined for Afghanistan and Central Asian Republics, will be subject to receipt of export proceeds by wire transfer through banking channel, the central bank said. It also directed that exporters must ship the sugar within 60 days from the date of FEOD’s approval regarding quota allocation.