KARACHI: In order to set up a mechanism for export, the State Bank of Pakistan (SBP), through a circular, has made it compulsory for sugar millers to produce receipt of their payments to the growers as most of the mills are not buying sugarcane at the official rate or not giving payment to the growers in time.
As per the new mechanism, the authorised dealers (ADs) in foreign exchange will forward requests of sugar mills to the State Bank for approval. The government has allowed 650,000 tonnes of sugar exports for those sugar mills who clear their outstanding dues. The authorised dealers are required to furnish authenticated copies of clearance certificates issued by the concerned cane commissioner regarding clearance of outstanding arrears of growers, according to a circular issued by the State Bank.
The circular said the dealers would ensure receipt of a minimum 15 per cent of total contract value as advance payment or obtain an irrevocable Letter of Credit (LC) from the buyer.
The authorised dealers would ensure to forfeit 15 per cent advance payment in favour of Government of Pakistan in case of non-performance within the stipulated time.
Exporter must ship the sugar within 45 days from the date of SBP approval or by May 15, whichever comes earlier, said the circular.
The SBP will allow permission on first-come, first-served basis. The authorised dealers would submit sugar export shipments update to the State Bank on a weekly basis. The dealers are also required to furnish sugar export contracts, e-forms, irrevocable LCs or advance payment vouchers, swift message and reporting schedule/credit advice, said the SBP circular.
