The central bank Tuesday asked the dealers to immediately cancel the contracts made in pursuance of the decision of the Economic Coordination Committee (ECC) in January, May and October this year against which the sugar has not yet been exported or partially exported.
Also, the regulator said the contracts made in pursuance of ECC’s October 2012 decision shall be cancelled if sugar was not exported within 15 days of the decision.
“The contracts made in pursuance of ECC decision of January and May, 2012 against which the sugar has not yet been exported or partially exported be immediately cancelled”.
The quantity of sugar against the cancelled contracts shall be allowed export against minimum 10% advance payment of contract or irrevocable letter of credit and shipped within 60 days from the date of approval of SBP.
There will be no limit on individual sugar mills for export, the bank said.
The sugar mills shall export 500, 000 MT against irrevocable L/C or contract with 10% advance payment to be shipped in 90 days of the registration with SBP in addition to already allowed export of 700,000 MT of sugar.
Accordingly, the authorized dealers are advised to process the cases as per following mechanism:
One, all approvals granted under FE Circular Letter No. 3 & 5 dated March 05, & June 14, 2012 respectively stand cancelled with immediate effect.
Two, all approvals granted under FE Circular Letter No.8 dated October 19, 2012 will remain valid for shipment up to December 26, 2012 and stand cancelled thereafter.
Three, request for approvals against the 1 & 2 above would be subject to either of the following conditions and procedure conveyed in above FE Circular Letters:
To receive a minimum 10% of total contract value as advance payment (evidencing by advance payment voucher, swift message and reporting schedule/ credit advice) and shipped within 60 days from the date of approval of SBP.
Or obtaining an irrevocable L/C 60 days maturity from the buyer and shipped within 60 days from the date of approval of SBP.
Further, approval against fresh allocation of 500,000 MT of sugar will be subject to the following:
Receipt of a minimum 10% of total contract value as advance payment (evidencing by advance payment voucher, swift message and reporting schedule/ credit advice) and exporter must ship the sugar within 90 days from the date of SBP approval.
Or obtaining an irrevocable L/C 90 days maturity from the buyer.
The banks will forward the requests of Sugar Mills alongwith attested photocopies of contract, E-Form, irrevocable L/C 90 days maturity or advance payment voucher, swift message and reporting schedule /credit advice, as the case may be, for SBP approval.
All requests should be addressed to the Director, Exchange Policy Department, State Bank of Pakistan, I.I. Chundrigar Road, Karachi with reference to the related F. E. Circular Letter on the subject.
The SBP will allow permission against each E-Form on first come first served basis.
The bank will send sugar export update to the Director, Exchange Policy Department State Bank of Pakistan, I.I. Chundrigar Road, Karachi on daily basis.
