KARACHI: The State Bank of Pakistan (SBP) has announced that all sugar exports must be accompanied by 100% advance receipt of export proceeds through a banking channel.
This directive follows a memorandum from the Ministry of Industries and Production issued on June 26, 2024, regarding sugar export.
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Under pressure from millers, the Economic Coordination Council (ECC) of the Federal Cabinet approved the export of 150,000 metric tons of sugar, a decision made just two days before the federal budget announcement.
As per SBP’s circular, all banks have been instructed to ensure that export proceeds are fully received before any shipments are made.
Banks are required to obtain proof of quota allocation from provincial cane commissioners and an undertaking from exporters that the consignment will be shipped within 45 days of quota allocation.
The SBP circular stresses that banks must ensure advance receipt of export proceeds based on a valid sales contract and submit weekly updates on sugar export transactions to the SBP.
This move follows previous experiences where sugar exports led to an 80% surge in domestic prices, despite assurances from sugar millers that there would be no price increase. The SBP’s stringent measures aim to maintain market stability while facilitating export processes.
In a related development, the Punjab government has granted the highest export quota to sugar mills owned by Jahangir Khan Tareen, with JDW Sugar Mills-I and JDW Sugar Mills-II receiving an allocation of 10,783 tons out of the total 96,000 tons permitted for export from the province.
In addition to JDW Sugar Mills, other mills received export quotas as follows: Hamza Sugar Mills (6,535 tons), Madina Sugar Mills (3,790 tons), Ramadan Sugar Mills (2,988 tons), Al-Arabia Sugar Mills (1,660 tons), Ashraf Sugar Mills (2,158 tons), Ittefaq Sugar Mills (1,298 tons), and Tandlianwala Sugar Mills (3,447 tons).
