ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Thursday empowered the cane commissioners in Punjab to allocate sugar export quota to mills on the pattern of Sindh and the export shipment should be completed within 45 days.
The meeting, presided over by Finance Minister Ishaq Dar, was reminded that on the recommendation of the Sugar Advisory Board (SAB) led by Minister for National Food Security and Research (MNFSR) Tariq Bashir Cheema, the ECC had allowed on Jan 3 export of a total of 250,000 tonnes of sugar including 100,000 tonnes already approved on December 15. The exports were allowed to sugar mills on a ‘first come first serve basis’.
The Jan 3 meeting had also decided that the total quantity of export should be distributed among provinces based on their installed crushing capacity to be determined by Pakistan Sugar Mills Association. The export is subject to the condition that export proceeds in US dollars will be recovered from sugar exporters within 60 days of the opening of letters of credit.
Under the decision, the State Bank of Pakistan (SBP) and the Ministry of Commerce notified that “authorised dealers will ensure to obtain an irrevocable letter of credit from the (sugar) buyer”. The SBP later pointed out that stakeholders were raising queries for permission to export through advance payment and hence recommended amending the decision to clarify the timelines for shipment of sugar export after approval of quota.
The SBP suspected that exporters could avail sugar quota for export but not execute the transaction, or may stretch it beyond the time frame of two months.
Therefore, the SBP recommended that shipment of consignment be ensured within 30 days of quota allocation and PSMA-Punjab’s demand be accepted for allocation of sugar quota for export through cane commissioner as was already done in the case of Sindh under the previous ECC decision.
Published in Dawn, January 27th, 2023
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