Govt raises cap on sugar export to 0.65 million tons

KARACHI: The government has allowed another 150,000 tons of sugar exports, bringing the total to 650,000 tons so far this year, as it seeks to trim surplus stocks and bolster domestic prices.
The Economic Coordination Committee (ECC) of the Cabinet in November allowed sugar mills to export 500,000 tons and the quota to be allocated to individuals on first-come first-served basis. The ECC had also allowed sugar export to Afghanistan and beyond by land route in the dollar terms.
The State Bank of Pakistan (SBP) on Monday advised the registered sugar dealers with surplus stocks to submit their export requests for approval.
The central bank has asked them to submit the requests of sugar mills through their respective departmental/business/group heads to the director, Exchange Policy Department, State Bank of Pakistan, for approval.
“The requests should be accompanied with clearance issued by the cane commissioner concerned to the effect that the sugar mill concerned has cleared outstanding arrears of the growers; sugar export contract; E-Form; irrevocable LC or advance payment voucher, swift message and reporting schedule / credit advice, as the case may be,” the central bank notification said.
The central bank will allow permission against each E-Form on first-come first-served basis, it added.
“The dealers will ensure receipt of a minimum 15 percent of the total contract value as advance payment (evidenced by advance payment voucher, swift message and reporting schedule/ credit advice) or obtain an irrevocable LC from the buyer.”
The central bank said exporter must ship the sugar within 45 days from the date of approval or by May 15, whichever comes earlier.
Moreover, the dealers will ensure to forfeit 15 percent advance payment in favour of the government of Pakistan in case of nonperformance within the stipulated time, it added.
The dealers will submit sugar export shipment update to the director, Exchange Policy Department, State Bank of Pakistan, Karachi, on a weekly basis, failing which, the central bank will initiate action under related rules and regulations.
Pakistan is back in export market following expectation of 5.7 million tons sugar output this production season. The country’s sugar consumption is pegged at around 4.6-4.7 million tons, and it started the 2014/15 year with around 800,000 tons of stock.
The country is maintaining high sugar reserves at present despite of the fact that it had already exported a total of 700,000 tons during the last season. The stocks are much higher than what is should have been as many of the industrialists in the confectionery and related sectors have made cheap imports last year.
The Pakistan Sugar Mills Association had proposed the government to allow export of 1.5 million tones this season, which includes export of 500,000 tons with immediate effect and export of another one million tons at the end of the crushing season.