KARACHI: All banks have been told by the State Bank of Pakistan (SBP) to assist sugar exports, but to make sure that revenues are collected prior to shipments being shipped.
The Economic Coordination Committee (ECC) of the Cabinet has approved the export of 150,000 tonnes of sugar subject to certain terms and conditions, the central bank stated in a circular on Tuesday. Just two days remained before the government budget for 2024–25 was announced.
Political ramifications of the sugar export choice drive up prices on the domestic market. Sugar exports were allowed in FY23, which caused domestic prices to rise by 80%.
With strong ties to the federal and provincial power structures, the Pakistan Sugar Mills Association has been able to exert pressure on the government to approve the export of sweeteners.
Exporters will need to provide the proceeds ahead of time.
Despite the sugar millers’ assurances to the government that domestic prices would not increase, historical data refuted their statements.
Making money off of the public is a typical occurrence. Growers in the county are facing severe financial difficulties due to an unauthorized import of wheat. They were unable to sell their produce due to a glut brought on by the scandalous 3.5 million tonnes of enormous imports that the interim government had permitted.
The State Bank organized $1 billion for the purchase of wheat while causing enormous problems for other imports of even $1 million, a fact that astonished a lot of importers and economic stakeholders.
The State Bank circular further stated that the banks will guarantee 100% of export proceeds received in advance from the foreign buyer through the regular banking channel prior to shipping, provided that the buyer has a valid sales contract.
According to the circular, the exporters would have to give the banks an assurance that the shipment will be sent no later than 45 days after the date of quota allocation.
The banks will get documentation from the corresponding provincial cane commissioners attesting to the quota allocation, and they will retain a copy for their files.
