PAR News - Thurs, 25 Apr 2024

TOPLINE

• The country's wheat production for the Rabi Season 2023-2024 missed its target, yielding 29.69 million tons from 9.6 million hectares of land, below the set target of 32.2 million tons.
• In March 2024, rice exports from Pakistan reached a record high of 545,000 tonnes, valued at $330.453 million, despite reduced shipments to China, driven by strong demand in African and Asian markets.
• Pakistan is set to begin exporting dairy products to China from a sophisticated farm in Sheikhupura, following an unofficial approval by China Customs, announced Punjab Livestock Secretary Masaud Anwar.
• Iranian President Ebrahim Raisi's recent visit to Pakistan highlighted the significant yet delayed IP Gas Pipeline Project between the two countries, hindered by geopolitical tensions and international sanctions.
• U.S. Ambassador to Pakistan, Donald Blome, commended Pakistan's new economic team and expressed optimism about ongoing IMF discussions, according to a statement from the Senate Secretariat.
• Israel said Wednesday its forces were carrying out “offensive action” in Lebanon after launching cross-border strikes targeting Hamas ally Hezbollah as Israeli aircraft and tanks pounded the Gaza Strip.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Cotton Market Faces Downturn: The local cotton market is bearish with low trading volumes due to declining international prices, as reported by Cotton Analyst Naseem Usman. Prices vary between Rs 20,000 and Rs 22,000 per maund, while the spot rate was reduced by Rs 500 to Rs 20,300 per maund. Phutti prices in Punjab are between Rs 9,500 and Rs 10,000 per 40 kg, and polyester fiber is priced at Rs 367 per kg. [BR]
• Sugar Prices Spike Amid Export Talks: Domestic sugar prices in Pakistan have risen by Rs 10 to Rs 150 per kg amid potential government approval for exporting 1 to 1.5 million tonnes of sugar, following pressure from millers. Rauf Ibrahim of the Karachi Wholesalers Grocers Association noted a recent wholesale price increase to Rs 138-139 per kg and cautioned that approving sugar exports could lead to further significant price increases locally. [Dawn]
• KP Cabinet Sets Wheat Procurement Rate: The Khyber Pakhtunkhwa cabinet, led by Chief Minister Ali Amin Khan Gandapur, has approved the procurement of 600,000 metric tons of wheat at the rate of Rs 3,900 per 40kg, aligning with the rates set by the federal government as well as the governments of Punjab and Balochistan. This decision was made during a cabinet meeting held on Tuesday. [Dawn] [The Nation]
• Wheat Production Shortfall: The country's wheat production for the Rabi Season 2023-2024 missed its target, yielding 29.69 million tons from 9.6 million hectares of land, below the set target of 32.2 million tons. This shortfall was reported during a meeting of the Federal Committee on Agriculture, chaired by Federal Minister Rana Tanveer Hussain. [BR]
• Inquiry into Unnecessary Wheat Imports: National Food Security and Research Minister Rana Tanveer announced an inquiry into the caretaker government's decision to import wheat despite predictions of a bumper local crop. He also supported forming a House committee to scrutinize this decision, responding to queries in the National Assembly related to agriculture. [ET]
• Lawmakers Slam Government Wheat Policy: In a rare show of bipartisan unity, both opposition and treasury lawmakers have strongly criticized the government's wheat policy, labeling it a "farmer enemy policy." They are calling for an investigation into the caretaker government's decision to import wheat, alleging corruption and expressing concerns about potential exploitation of farmers and a looming wheat shortage. [ET]
• Islamabad Court Reviews Bread Prices: The Islamabad High Court issued notices in response to a petition challenging the mandated reduction of 'naan' and 'roti' prices in Islamabad, filed by Sajjad Ali of the Naanbai Welfare Association. The petition contests the pricing set by the District Magistrate on April 15, fixing the cost of 120-gram roti at Rs 16 and naan at Rs 20. [BR]
• Pakistan's Rice Triumph: Breaking Records - In March 2024, rice exports from Pakistan reached a record high of 545,000 tonnes, valued at $330.453 million, despite reduced shipments to China, driven by strong demand in African and Asian markets. According to leading exporter Shamsul Islam Khan, these figures represent an 89.74 percent increase in value and a 65.95 percent surge in quantity compared to the previous year. [The News]
• Pakistan Begins Dairy Exports to China: Pakistan is set to begin exporting dairy products to China from a sophisticated farm in Sheikhupura, following an unofficial approval by China Customs, announced Punjab Livestock Secretary Masaud Anwar. Concurrently, the government plans to invest significantly in agriculture, allocating Rs 100 billion over two years and another Rs 80 billion for watercourse modernization over three years. [Dawn]

ENERGY - WEATHER, WATER & POWER

• IP Pipeline: Renewed Commitment - Iranian President Ebrahim Raisi's recent visit to Pakistan highlighted the significant yet delayed IP Gas Pipeline Project between the two countries, hindered by geopolitical tensions and international sanctions. During the visit, both nations reaffirmed their commitment to energy cooperation, including electricity trade and power transmission, as detailed in a joint statement. [BR] [Dawn]
• Boosting Pakistan-Iran Trade: Pakistan and Iran agreed to expedite a Free Trade Agreement and boost bilateral trade to USD 10 billion within five years, as stated in a joint statement following Iranian President Dr. Seyed Ebrahim Raisi's visit. They also committed to collaborate in combating terrorism. [BR]
• Petrol Prices Poised to Drop: Petroleum product prices in Pakistan are expected to decrease due to falling global oil prices, with petrol potentially dropping by Rs 3.75 per liter and diesel by Rs 7.85 per liter. Final price adjustments will be confirmed on April 29, 2024, after reviewing the recent trends in global oil prices. [The News]
• SOEs Embrace ADR for Taxes: The government has enabled state-owned enterprises (SOEs) to use the Alternative Dispute Resolution (ADR) mechanism to resolve tax disputes with the Federal Board of Revenue (FBR) before filing appeals. This policy, detailed in the Tax Law Amendment Bill, 2024, applies to disputes over Rs 50 million, though SOEs are not subject to this limit. [BR]
• Record Diesel Stockpiles Grow: Pakistan's high-speed diesel stockpiles have hit a record 650,000 tonnes and are expected to grow after Pakistan State Oil imports an additional 100,000 tonnes this month. Daily consumption remains around 14,000 tonnes, unaffected by the harvesting season, largely due to the impact of smuggled Iranian diesel. [The News]
• KE's Billion-Rupee Revamp Approved: The National Electric Power Regulatory Authority (Nepra) has approved a seven-year investment and loss reduction plan for KE, spanning from 2023 to 2029, with a projected investment of Rs 392.5 billion aimed at reducing losses to 12.63% from 14.58%. This approval, delayed and criticized at various forums, was issued just before the Prime Minister’s visit to Saudi Arabia, which had voiced concerns over the delays. [BR] [Dawn] [ET]
• Pak-EPA Reviews New Grid Station EIA: The Pakistan Environmental Protection Agency (Pak-EPA) held a public hearing for the Environmental Impact Assessment (EIA) of a new 132 KV Grid Station and its transmission lines in Islamabad's E-16 Sector, a mandatory step required to obtain a No Objection Certificate (NOC) for the project. [ET]
• Net Metering Rate Cut Considered: The government is contemplating reducing the buyback rates for net metering electricity from Rs 21 per unit to Rs 11 per unit, due to concerns that the widespread adoption among the wealthier segments is undermining financial strategies for capacity charges in the power sector. This has raised concerns within the Power Division about long-term damage to the sector. [BR]
• NTDC Bars Tender Discussion: The National Transmission and Despatch Company (NTDC) has barred its Chief Engineer (DTLP) from discussing the tender for the Islamabad West Grid Station project due to concerns about revisiting settled issues, following warnings from the World Bank about problematic communications with the bidder, M/s NWEPDI-TBEA. [BR]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• U.S. Commends Pakistan's Economic Team: U.S. Ambassador to Pakistan, Donald Blome, commended Pakistan's new economic team and expressed optimism about ongoing IMF discussions, according to a statement from the Senate Secretariat. In a meeting with Chairman Senate Yousaf Raza Gilani, Blome also emphasized the potential for increased economic cooperation between the U.S. and Pakistan. [BR] [Dawn]
• Cabinet Approves Tax ADR Shift: The federal cabinet has greenlit tax law amendments to dissolve some appellate bodies and introduce Alternative Dispute Resolution (ADR) methods. These changes target the inefficiencies at the Appellate Tribunal Inland Revenue (ATIR), where around Rs 2 trillion is stuck in litigation. [BR]
• PM Shehbaz Addresses Karachi Chamber Concerns: Prime Minister Shehbaz Sharif responded to concerns raised by the Karachi Chamber of Commerce & Industry by directing federal ministers and secretaries to meet with the Chamber to resolve issues. He promised to personally review the outcomes of these discussions and plans to announce relief measures on May 1st. [BR]
• PM Vows Transparent Privatization: Prime Minister Shehbaz Sharif stated that the government's privatization process would be conducted transparently and without bureaucratic delays, emphasizing the role of the private sector in driving national development and prosperity. He assured that consultations with the business community would precede any final decisions on privatization. [The News]
• PM Boosts Sindh Development: Prime Minister Shahbaz Sharif met with Sindh Chief Minister Murad Ali Shah to discuss unresolved financial and developmental issues. He instructed his ministers to prioritize these issues and announced the provision of 150 buses to the provincial fleet, demonstrating his commitment to development in Sindh. [BR]
• Tax Law Revamp Targets Appeals: The Tax Law Amendment Bill, 2024, introduced in the National Assembly, revises the jurisdiction of the Commissioner Inland Revenue (Appeals) to only handle income tax, sales tax, and federal excise duty appeals below specified thresholds. Higher-value appeals will be directed to the Appellate Tribunal Inland Revenue (ATIR) for resolution within six months. [BR] [Dawn]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• Israel’s Genocide: Israel said Wednesday its forces were carrying out “offensive action” in Lebanon after launching cross-border strikes targeting Hamas ally Hezbollah as Israeli aircraft and tanks pounded the Gaza Strip.  Since the Israel-Hamas war erupted on October 7, Lebanon’s powerful Iran-backed Hezbollah group and Israeli forces have traded near-daily fire, heightening fears of a wider conflict breaking out. [BR] [Dawn]
• Biden Signs $61B Ukraine Aid Bill: US President Joe Biden signed legislation authorizing $61 billion in military aid for Ukraine, followed by the Pentagon announcing a $1 billion aid package including air defense and artillery munitions for Kyiv. The bill, which also includes aid for Israel and Taiwan and a potential TikTok ban, addresses delays that had previously hindered Ukrainian military efforts. [Dawn]
• UN Launches Climate Resilience Fund: The United Nations has launched a new Climate Resilience Fund to protect refugees and displaced communities from climate change impacts. The UN refugee agency plans to raise $100 million by next year to support those in regions hardest hit by climate emergencies, highlighting that over 70% of refugees in 2022 came from climate-vulnerable countries. [BR]
• Blinken's Critical Talks in China: US Secretary of State Antony Blinken is in China for his second visit this year, aiming to address concerns over China's support for Russia and manage other bilateral tensions. During his stay, he will meet with top officials in Beijing to discuss issues including Taiwan's new leadership and U.S. concerns about Chinese trade practices, significant in an election year for President Joe Biden. [Dawn]
• Senate Approves TikTok Sale Bill: The US Senate approved a bill that could trigger a court challenge over TikTok's free speech protections by requiring its Chinese owner to sell the app or face removal from app stores. This move has raised concerns among civil rights advocates, TikTok, and its users, who are likely to sue if President Joe Biden signs the bill into law. [Dawn]
• Oil Prices Dip Amidst Calmer Tensions: Oil prices dipped slightly on Wednesday due to reduced tensions in the Middle East and slower business activity in the top oil-consuming country. However, a decrease in U.S. crude inventories limited the losses. Brent crude fell 27 cents to $88.15 a barrel, while U.S. West Texas Intermediate dropped 38 cents to $82.98 a barrel. [BR]

OPINION(S) & REMAINDERS

• Opinion: Debt, Climate, Inflation - “DEBT, climate, and inflation have in recent years become important planks of the spring meetings hosted by the World Bank and IMF. The agenda for this year’s meetings, which concluded last week, included finding ways to reform the global financial architecture, mobilize additional development and climate finance, and strengthen international cooperation to address multiple global crises, especially their impact on developing countries.” - By Ali Tauqeer Sheikh [Dawn]