In order to facilitate the exporters, State Bank of Pakistan (SBP) while extending the shipment period for sugar by 45-days has announced to reduce advance deposit requirement from 25 percent to 15 percent with immediate effect. According to SBP EPD Circular Letter No 07 2014 issued last week, following Economic Co-ordination Committee (ECC) of the Cabinet''s decision dated July 4, 2014 conveyed to State Bank of Pakistan by Ministry of Commerce vide their Office Memorandum No 7(2)/2012-E-III dated July 11, 2014, the central bank has amended it previous circular, issued in April this year, for sugar export.
As per ECC decision, shipment period for export of sugar has been extended from 45 days to 90 days with retrospective effect from 27th March, 2014 and now exporters can dispatch their sugar shipments through sugar mills latest by October 31, 2014. Accordingly, shipment period for export of sugar will be 90 days from the date of issuance of SBP approval letter or by October 31, 2014 whichever comes earlier.
Further, shipment period of 45 days for the export of sugar on the basis of the earlier SBP approvals issued in the light of the to EPD Circular Letter No 02/EPP.1 (51)-2014 will also stand extended to 90 days. Following the ECC decision, SBP has also announced to reduce advance deposit requirement for sugar export by 10 percent. With this amendment, the requirement for advance deposit has been reduced from 25 percent to 15 percent with immediate effect.
Sugar mills can export commodity from now onwards against irrevocable letter of credit or a contract with 15 percent non-refundable advance payment, which will be forfeited in favour of Government of Pakistan in case of non-performance. According to SBP, all other terms and conditions of the above mentioned EPD Circular Letter No 02/EPP.1 (51)-2014 issued for sugar export shall remain unchanged. SBP has asked all authorised dealers to bring the same to the notice of all their constituents to facilitate the exporters.
Sugar industry has welcomed the ECC and SBP decision and said that these types of measurers would provide some cushion to the mills to offload their stock before staring new crushing season. They said that still hundreds of tons sugar stocks are lying at sugar mills'' warehouses for domestic and export purposes, while new crushing season is going to start in next two months.