The central bank Monday asked the commercial banks to maintain record of the sugar exporting mills to ensure that the exporters do not exceed the maximum prescribed quota of 5,000 tonnes per sugar mill. The Economic Coordination Committee (ECC), in its January 31st meeting, had said yes to the demand of Pakistan Sugar Mills Association to allow the export of 100,000 tonnes of surplus sugar to, apparently, ward off a possible glut in the local market.
The Ministry of Commerce, through public notice number 7(2)/2012-E-III, had tasked the State Bank of Pakistan to “monitor the exports and no form (E) shall be issued in excess of individual and cumulative ceiling” that was set at 5,000 tonnes by the ECC. Monday saw the central bank notifying the authorised dealers in the Foreign Exchange of a “mechanism” of compliance with regard to the sugar exports by the millers. Under the mechanism, the SBP said, the banks would forward for its approval the requests of the sugar mills along with photocopies of E-Form, the contract, Letter of Credit, advance payment etc.
“The banks should also maintain the record of each sugar mill to ensure compliance of maximum prescribed quota of 5,000 tonnes per sugar mill,” said the State Bank. All requests, it said, should be addressed to the Director Exchange Policy Department of the SBP, situated in regulator’s head office here. The central bank would allow permission against each E-Form on first come first served basis, it said adding the bank concerned would send sugar export update to the Director Exchange Policy Department on weekly basis. The State Bank warned that the applications that are “incomplete” or received to it after April 15 (2012) would not be considered. “Authorised dealers are advised to bring the same to the notice of all their constituents,” the bank said through issuing EPD Circular Letter No. 03 of 2012 on Monday. The Ministry of Commerce, in a public notice, set following conditions for the millers to export excess sugar.
a) 100,000 tonnes of sugar will be exported.
b) A quantity not in excess of 5,000 tones shall be exported by individual sugar mills on first come first basis.
c) The export shall be made only against “E” Form.
d) The State Bank of Pakistan will monitor the exports and no form (E) shall be issued in excess of individual and cumulative ceiling mentioned above.
The federal government had banned sugar export in 2009 when prices of the daily-use kitchen item skyrocketed to double, over Rs80 per kilogram, in the domestic market. Since then the sugar millers have been demanding of the government to allow the export of sugar that is in excess of the country’s strategic stocks. Pakistan consumes, annually, around 4.2 million tonnes of sugar while the expected surplus at the end of current season is estimated at 1.5 million tonnes.
