ISLAMABAD, July 1: The Sri Lankan government has allowed duty free import of 9,337 tons of rice from Pakistan under the Free Trade Agreement (FTA), which could be utilized till December 2006.

Under the FTA effective from June 12, 2005, Sri Lanka has given duty free access to Pakistan for long grain basmati rice up to 6,000 tons per annum. Pakistani exporters, however, were not able to utilize the full quantity for 2005.

An official announcement issued here by the commerce ministry said the issue of unutilized quantity of rice was taken up with the Sri Lankan side which agreed in a bilateral meeting to carry forward the unutilized quantity of 3,337 tons of 2005.

Initially, the Sri Lankan government authorised the Cooperative Wholesale Establishment (CWE), a public sector organisation, to handle import of rice under TRQ. However, Pakistan requested the Sri Lankan authorities that import of rice might not be restricted to one organisation, as it would create cartel and also lead to price distortion.

In order to address the concerns of Pakistan, the Sri Lankan government has allowed importers of basmati rice to carry out their business in a free market condition. Accordingly, approval for import of basmati rice will now be made by the Sri Lankan authorities on the "first come first served" basis subject to maximum ceiling of 500 tons for each importer during the year.

Importers in Sri Lanka should utilise such approval within a period of six months from the date of approval. Unutilised quantities, during the stipulated period, will be allowed to be imported by the interested parties on the same basis.

To ensure better utilisation of the quota in a transparent manner, the ministry has decided that export of rice under the FTA would be made in the following manner: a) Certificate of origin will be provided by the Export Promotion Bureau (EPB) on first-cum-first-served basis on submission of bill of lading, commercial invoice, and a quality certificate from the TCP certifying that the consignment is comprised of basmati rice; b) the shipments would be made against irrevocable letter of credit or advance payment; c) the certificate of origin to be granted by the EPB under the above mentioned terms and conditions would be on post-shipment basis and not on the basis of commitment of exports and; d) to ensure transparency and level-playing field, the EPB may notify the leftover quantity available for export on its website on regular basis and keep this ministry informed about the utilization of quantity.

The ministry has also issued necessary guidelines to the EPB to put in place appropriate mechanism for monitoring the record of utilised and leftover quantity.