PAR News - Fri, 26 Apr 2024

TOPLINE

• The government has decided to import 200,000 tonnes of urea to satisfy the rising demand for the kharif season, in light of sharp price increases by local producers—from Rs 500 to Rs 700 per 50kg bag this month—despite stable input costs.
• The government targets a cotton production of 10.8 million bales for FY 2024-25 to rejuvenate the industry, which has struggled with underperformance and was heavily impacted by floods in 2022.
• Punjab Food Minister Bilal Yasin supported forming a committee to investigate wheat imports by the caretaker government after the Punjab Assembly rejected the existing wheat procurement policy.
• The Federal Committee on Agriculture (FCA) in Pakistan has set the production targets for the 2024-25 kharif season, aiming for 10.8 million bales of cotton, 8.7 million tonnes of rice, 9.3 million tonnes of maize, and 76.7 million tonnes of sugarcane.
• Starting May 1, 2024, ex-depot prices for petrol and high-speed diesel (HSD) are expected to drop due to lower international oil prices and premiums.
• The World Bank warned that rising tensions in the Middle East, especially due to Israel's genocide in Gaza, are pushing up oil and gold prices, potentially reversing recent progress in controlling global inflation.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Court Suspends Roti & Naan Price Reduction: The Islamabad High Court suspended a city administration notification that reduced the prices of Roti and Naan following a petition by the Naanbai Welfare Association. The petition challenged the new pricing, which set 120-gram Roti and Naan at Rs 16 and Rs 20 respectively. [BR]
• Cotton Revival Target: The government targets a cotton production of 10.8 million bales for FY 2024-25 to rejuvenate the industry, which has struggled with underperformance and was heavily impacted by floods in 2022. Last season, production improved significantly, though still below target, reaching 8.336 million bales. [The News]
• Call for Probe into Wheat Imports: Punjab Food Minister Bilal Yasin supported forming a committee to investigate wheat imports by the caretaker government after the Punjab Assembly rejected the existing wheat procurement policy. Yasin stated that the import decision, which has disrupted local wheat purchases, was made by the caretaker government and emphasized the need to protect small growers from middlemen. [Dawn]
• Wheat & Potato Production Surges: The Federal Committee on Agriculture (FCA) reported that wheat production in Pakistan for the 2023-24 season increased by 5.4% to 29.69 million tonnes. Additionally, tomato production rose by 3.9% to 627.47 thousand tonnes, and potato production significantly exceeded targets, reaching 8.1 million tonnes, 27.9% above the FCA's expectations. [ET]
• Kharif Crop Targets Set: The Federal Committee on Agriculture (FCA) in Pakistan has set the production targets for the 2024-25 kharif season, aiming for 10.8 million bales of cotton, 8.7 million tonnes of rice, 9.3 million tonnes of maize, and 76.7 million tonnes of sugarcane. Additional targets were also established for crops such as mung, mash, and chilies. [Dawn]
• Addressing Medicine Shortages: The Drug Regulatory Authority of Pakistan (Drap) reported that while essential medicines like inhalers and insulin are generally available, there are sporadic shortages due to supply chain issues. Drap is actively working with manufacturers and importers to mitigate these shortages, according to CEO Asim Rauf. [The News]

ENERGY - WEATHER, WATER & POWER

• Urea Import Plan Announced: The government has decided to import 200,000 tonnes of urea to satisfy the rising demand for the kharif season, in light of sharp price increases by local producers—from Rs 500 to Rs 700 per 50kg bag this month—despite stable input costs. This decision, awaiting approval from the Economic Coordination Committee, is a response to expected urea consumption increases of 18-20% this season. [Dawn] [ET]
• SSGC Targets Gas Theft: Sui Southern Gas Company (SSGC) has intensified its anti-theft operations in upper Sindh, disconnecting illegal gas connections in 140 houses across two residential areas during recent raids. In Zafar Housing Society and Mahar Ali Society, residents had illegally connected rubber pipes to SSGC's main lines, resulting in annual thefts of 19,200 and 115,200 cubic meters of gas respectively. Legal actions and theft claims are now being pursued following these crackdowns. [The News]
• Curbing Fuel Smuggling: The Ministry of Energy seeks action from the Ministry of Interior and the Federal Board of Revenue to curb Iranian petroleum product smuggling, which has caused a refinery shutdown and risks multi-billion dollar refinery upgrades, as per concerns raised by the Oil Companies Advisory Council. [The News]
• Fuel Prices Set to Drop: Starting May 1, 2024, ex-depot prices for petrol and high-speed diesel (HSD) are expected to drop due to lower international oil prices and premiums. Estimates suggest a reduction of Rs 4.88 per liter for petrol, Rs 7.37 for HSD, Rs 8.03 for kerosene oil, and Rs 5.37 for light diesel oil (LDO) for the first half of May. [BR] [ET]
• Dealers Decry Deregulation: In Pakistan, petroleum dealers have opposed the proposed deregulation of fuel prices, arguing it could harm their businesses and potentially lead to closures. This reaction follows a briefing by the Oil and Gas Regulatory Authority (OGRA) and subsequent concerns expressed by the country's oil refineries about the complexity of the issue. [The News]
• KAPCO Rejects CTBCM: Kot Addu Power Company Limited (KAPCO) has indicated that participating in the Competitive Trading Bilateral Contracts Market (CTBCM) is neither feasible nor commercially viable for them, citing regulatory changes that limit the Central Power Purchasing Agency (CPPA-G) role in power procurement. [BR]
• Experts Identify Flooding Causes: At a program on urban flooding held at the Climate Action Centre, experts identified the significant encroachment of storm water drains and the lack of a regular cleaning system as the main causes of flooding in the city. The panel, including specialists in hydrology, meteorology, and urban planning, stressed the need to address these root causes to effectively prevent future flooding. [Dawn]
• Boosting Pakistan-US Trade: Pakistan and the United States discussed enhancing their trade and investment ties during a meeting under the Trade and Investment Framework Agreement (TIFA). The dialogue included topics like regulatory practices, digital trade, intellectual property, and agriculture, focusing on increasing access for U.S. biotechnology products and beef. [BR] [Dawn]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• Parliamentary Power-Sharing Deal: After months of negotiations, Pakistan's government and opposition agreed on a power-sharing formula for the composition of standing committees in the lower house of parliament. The government will chair 26 committees, while the opposition will chair 11, including the Public Accounts Committee. [BR]
• Pakistan PM's Saudi Visit: Prime Minister Shehbaz Sharif of Pakistan will visit Saudi Arabia on April 28-29 to attend a special meeting of the World Economic Forum in Riyadh and engage in bilateral discussions with Saudi leaders on mutual interests. Accompanying him will be Foreign Minister Ishaq Dar, with the visit taking place at the invitation of Saudi Crown Prince Mohammed bin Salman. [BR]
• Court Restrains Imran Khan's Statements: An Islamabad accountability court ordered former Prime Minister Imran Khan and his spouse, Bushra Bibi, to stop making statements against the establishment and judiciary. The court, handling the Al-Qadir Trust case, also directed the media to avoid emphasizing any political or inflammatory remarks from the couple. [Dawn]
• IMF Demands GST Reform: The IMF has urged Pakistan to address massive GST fraud by incorporating the General Anti-Avoidance Rule (GAAR) into the Sales Tax Act of 1990, a likely condition for a forthcoming IMF bailout package. Discussions between Pakistan and the IMF are expected to start in the second week of May 2024. [The News]
• Pakistan's Reserves Decline: Pakistan's total liquid foreign exchange reserves decreased by $94 million last week, as reported by the State Bank of Pakistan (SBP). The reserves now stand at $13.281 billion, with the SBP’s reserves falling by $74 million due to external debt repayments and commercial banks' reserves declining by $20 million. [BR] [Dawn]
• Roshan Account Inflow Surge: Since its launch in September 2020, Pakistan's Roshan Digital Account (RDA) has attracted $7.660 billion in gross inflows by the end of March 2024, according to the State Bank of Pakistan. In March 2024, the RDA saw an increase in inflows, receiving $182 million, up 29% from $141 million in February, with the total number of accounts reaching 679,792. [BR] [Dawn] [ET] [PT]
• Proposing Trade Strategy Shift: The Pakistan Business Council (PBC) proposed a five-year exports charter and imports substitution plan to the Commerce Ministry, which includes a moratorium on signing new trade agreements. This was discussed during Commerce Minister Jam Kamal's visit to the PBC on April 8, 2024, where they focused on challenges to export growth and the need to reduce heavy imports. [BR]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• Israel Genocide: Palestinians in Rafah, Gaza mourned the deaths caused by Israeli bombardment amid Israel's plans for a ground invasion targeting Hamas militants in the area. This escalation has intensified global concerns and aid groups warn that an invasion would worsen the catastrophic conditions for Gaza’s 2.4 million residents. [BR] [Dawn] [Dawn] [DW]
• Conflict Inflates Commodity Prices: The World Bank warned that rising tensions in the Middle East, especially due to Israel's military activities in Gaza, are pushing up oil and gold prices, potentially reversing recent progress in controlling global inflation. They highlighted that the period of falling commodity prices aiding disinflation has likely ended, and a significant shock to oil prices could further exacerbate global inflation. [BR] [Dawn]
• Blinken Seeks Responsible Management: US Secretary of State Antony Blinken, on arriving in Beijing, called for the US and China to manage their differences responsibly. He is set to discuss issues like Chinese support for Russia and treatment of Taiwan, alongside expected Chinese concerns about US trade actions, starting with a closed meeting with Chinese scholars. [Dawn]
• Sanctions Target Iranian Drones: The United States, along with the United Kingdom and Canada, has imposed new sanctions on Iran, targeting those involved in the sale of Iranian drones, especially to Russia for use in Ukraine. These sanctions affect more than a dozen entities, individuals, and vessels linked to these activities, which support Iran’s Revolutionary Guards and Russia's military efforts. [BR]
• Congo Accuses Apple: The Democratic Republic of Congo has formally accused Apple of using illegally exploited minerals from its eastern region in Apple's products. The government's lawyers have issued a cease and desist notice, warning Apple of potential legal action and alleging that the minerals are smuggled into Rwanda before entering the global supply chain. [Dawn]

OPINION(S) & REMAINDERS

• Balochistan Raises Job Age Limit: The Balochistan government has increased the maximum age limit for applying to government jobs from 28 to 43 years, aiming to tackle unemployment and broaden public service access. Previous administrations had raised the limit to 35 and 38 years, but those changes were later reversed. [Dawn]
• Shuhada Package Launched: Prime Minister Muhammad Shehbaz Sharif launched the Shuhada Package to aid families of federal government officials martyred in the line of duty. He announced this during a visit to the family of late Customs Inspector Syed Hasnain Ali Tirmizi in Dera Ismail Khan, in the presence of government and party officials. [BR]
• Opinion: Existential Threats & Global Economy - “The title of April 2024 World Economic Outlook (WEO) report by International Monetary Fund (IMF, or simply the ‘Fund’) being ‘Steady but slow, resilience and divergence’, and a rather upbeat mood of the Fund with regard to growth prospects, whereby IMF’s economic counselor, Pierre-Olivier Gourinchas, pointed out in the foreword to the Report: ‘The global economy remains remarkably resilient, with growth holding steady as inflation returns to target. …despite many gloomy predictions, the world avoided a recession, the banking system proved largely resilient, and major emerging market economies did not suffer sudden stops.’” - By Dr Omer Javed [BR]