Urea export quota to be allocated on first-come-first-serve basis: SBP

The State Bank of Pakistan (SBP) said here on Tuesday that export quota to urea manufacturers will be allocated on first-come-first-serve basis without subsidy and exporters will be required to ship the urea within 45 days after approval. As the federal government has allowed export of 0.3 million tons of urea, accordingly the SBP has advised authorised dealers (ADs) to process the export of urea cases.
According to an EPD Circular (Letter No. 05 of 2017), Commerce Ministry's office memorandum (No. 6(1)/2015-Exp.III, dated January 27, 2017), regarding the export of urea in terms of which government of Pakistan has allowed urea manufactures to export 0.3m tons of urea.
As per mechanism, ADs will forward the requests of urea manufactures on prescribed format through their respective departmental/business/group heads to the Director, Foreign Exchange Operations Department (FEOD), SBP-Banking Services Corporation (BSC) for approval.
Attested/authenticated copies of urea export contract, manual Form-E or printout of EFE request, in case of electronically generated Form-E through WeBOC and irrevocable L/C or advance payment voucher, will be submitted along with the request. The circular says that FEOD, SBP-BSC will allocate urea export quota to urea manufacturers on first-come-first-serve basis and there will be no export subsidy on export of urea. ADs will ensure receipt of a minimum 15 per cent of total contract value as advance payment (evidenced by advance payment voucher) or obtain an irrevocable L/C from the buyer.
All exports, including those destined for Afghanistan and Central Asian Republics, will also be subject to receipt of export proceeds by wire transfer through banking channel. Exporters will be required to ship the urea within 45 days from the date of FEOD's approval regarding quota allocation or by April 28, 2017, whichever comes earlier.
In case of non-performance within the stipulated time against the quota allocated by SBP-BSC, the ADs will recover a penalty of 15pc of total contract value from the exporter and deposit the same with the SBP through DD/PO in favour of government of Pakistan. In case of partial shipment, the penalty shall be recovered proportionately by the AD.
In addition, ADs will be required to obtain prior permission from FEOD, SBP-BSC for return of advance payment received there against from the importer. ADs will submit urea export shipment update the Director FEOD, SBP-BSC head office on weekly basis as per the described reporting format and incomplete requests shall not be considered.
It may be mentioned here that Economic Co-ordination Committee (ECC) of the cabinet has allowed export of urea fertilizer up to 0.3m tons up to April 28, 2017 and fertilizer review committee would meet after the expiry of the deadline fixed for exporting urea fertilizer to review the exported quantities and if originally estimated surplus materialises, the committee may recommend additional quantities for export.