PAR News - Tues, 16 Apr 2024

TOPLINE

• The Sindh government demands an increase in the support price of seed cotton to Rs 11,000 per maund, citing the adverse effects of inadequate pricing on cotton cultivation. Rs 21.9 billion was the export value of cotton yarn in Feb 2024, up 47.8%.
• The provinces struggle to secure loans for wheat procurement due to high commodity debt. Sindh purchased 900,000 tons of wheat at Rs. 4000/maund, while Punjab has set a support price of Rs. 3900/maund. The Sindh Abadgar Ittehad (SAI) accuses the Sindh government of buying wheat from traders, not growers, violating the law with a procurement target of only 20%.
• New rains are predicted today after recent incidents claimed 43 lives in Pakistan. The NDMA warns of landslides and flash floods in various regions, advising precautions. Meeting the agriculture growth target of 3.5% for 2023-24 faces challenges due to ongoing rains damaging major crops like wheat, risking the achievement of the 32.2 million ton production target.
• The government raised petrol prices as Petrol now costs Rs 293.94/liter, up from Rs 289.41, and HSD is priced at Rs 290.38 per liter, compared to Rs 282.24 previously.
• Finance Minister Aurangzeb mentioned that Pakistan will be at least requesting for a three-year programme. The IMF proposed taxing non-essential items, like cigarettes and e-cigarettes. The meetings are ongoing this week.
• Coral reefs worldwide, from Australia to Kenya to Mexico, are undergoing a widespread bleaching event—the fourth global occurrence in three decades. Since February last year, 54 countries and territories have experienced mass bleaching due to climate change-induced warming of ocean surface waters.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Agriculture Growth Target Threatened: Meeting the agriculture growth target of 3.5% for 2023-24 faces challenges due to ongoing rains damaging major crops like wheat, risking the achievement of the 32.2 million ton production target set for this season, as per a senior official from the Ministry of National Food Security and Research (MNFSR). [BR]
• Sindh Urges Cotton Price Hike: The Sindh government demands an increase in the support price of seed cotton to Rs 11,000 per maund, citing the adverse effects of inadequate pricing on cotton cultivation. Sardar Muhammad Bux Mahar stresses the urgent need for this adjustment to address the hardships faced by farmers in Sindh. [BR] [ET] [The News]
• Cotton Yarn Export: Rs 21.9 billion was the export value of cotton yarn in Feb 2024, up 47.8% compared to Rs 14.8 billion in Feb 2023, according to the Pakistan Bureau of Statistics. [ET]
• Cotton Market Balanced Despite Surging Prices: Global cotton market remains balanced for 2023-24, but prices surge despite ample supply due to unexpected factors like reduced import demand from Pakistan. Despite projections of higher domestic cotton use, Pakistan's import demand hits a seven-year low, challenging USDA's import forecasts. [BR]
• Rawalpindi Readies Eid Cattle Market: The Rawalpindi Cantonment Board is preparing for the Bhatta Ground Cattle Market ahead of Eid Ul Fitr, ensuring compliance with SOPs and maintaining disease-free conditions. The contract auction will begin at Rs 89.5 million, following previous patterns, with the market's 2020 contract initially auctioned for Rs 7 million before a surprising re-auction by the contractor. [ET]
• Provinces Seek Loans for Wheat Procurement: Provinces struggle to secure loans for wheat procurement due to high commodity debt, leading banks to demand federal government guarantees. The issue was discussed in an ECC meeting, which considered proposals to delegate wheat procurement to provinces, resulting in varied opinions on the matter. [ET]
• Sindh Farmers Decry Wheat Procurement: The Sindh Abadgar Ittehad (SAI) accuses the Sindh government of buying wheat from traders, not growers, violating the law with a procurement target of only 20%. SAI demands transparency. Meanwhile, Punjab wheat growers seek to maintain a 4 million ton procurement target, with Khalid Mahmood Khokhar of PKI urging a meeting with Chief Minister Maryam Nawaz Sharif to address concerns about inadequate allocations of gunny bags. [BR] [ET] [BR] [PO]
• Lahore Crackdown on Tandoors Over Price Violations: The Lahore district administration launched a crackdown on 'Tandoors' failing to adhere to revised prices for 'Roti' and 'Naan'. Assistant Commissioners and Price Control Magistrates inspected 296 outlets, resulting in the arrest of seven 'Tandoor' owners, fines for 19, and notices issued to 46 others for non-compliance with pricing guidelines. [BR] [Dawn] [ET] [ET]

ENERGY - WEATHER, WATER & POWER

• Pakistan Braces for Further Rainfall Amid Recent Fatalities: New rains are predicted today after recent incidents claimed 43 lives in Pakistan. The National Disaster Management Authority warns of landslides and flash floods in various regions, advising precautions. In Khyber Pakhtunkhwa, heavy rain caused 8 deaths, 10 injuries, and damaged 85 houses over the last two days, according to the Provincial Disaster Management Authority. [BR] [BR] [Dawn]
• March 2024 Urea & DAP Sales Surge: Sales of urea are expected to reach approximately 590,000 tons in March 2024, marking a 21% increase from the same period last year and a 9% rise from February 2024. Di-ammonium phosphate (DAP) sales are projected to be around 119,000 tons in March, reflecting a significant 132% year-on-year increase and a marginal 3% month-on-month rise. [ET]
• Federal Government Raises Fuel Prices: The government raised petrol prices by Rs 4.53 per liter and high-speed diesel (HSD) prices by Rs 8.14 per liter until April 30, citing international market price fluctuations, as per a finance ministry notification. Petrol now costs Rs 293.94 per liter, up from Rs 289.41, and HSD is priced at Rs 290.38 per liter, compared to Rs 282.24 previously. [BR] [Dawn] [Dawn] [ET] [ET] [The News]
• Import of Liquified Natural Gas: Rs 88.7 billion was the import value of liquified natural gas in Feb 2024, down 7.15% compared to Rs 95.6 billion in Feb 2023. [ET]
• FBR Permits Foreign Petroleum Storage in Customs Warehouses: The Federal Board of Revenue (FBR) has permitted foreign suppliers of petroleum products to store their inventories in Customs bonded warehouses across Pakistan, as announced in SRO 568(I)/2024. This move facilitates import, domestic sale, and re-export of petroleum products under the Customs Bonded Facilities Rules, 2024. [BR]
• Interior Minister Vows Action Against Electricity Overbilling: Interior Minister Mohsin Naqvi stated the government's commitment to combat power theft and overbilling, revealing 830 million overbilled electricity units in Lahore Electric Supply Company. He emphasized the Prime Minister's support for the Federal Investigation Agency's campaign against overbilling, pledging to continue until the issue is fully resolved. [BR]
• Neelum-Jhelum Hydropower Project Partially Closed Again: The Neelum-Jhelum Hydropower Project, completed at a cost of over Rs 510 billion, has been partially closed again after nearly 20 months of repair works, shortly after reaching full capacity utilization. The project initially closed in July 2022 due to major cracks in its tailrace tunnel and resumed power generation in August-September 2023. [Dawn]
• NEECA Deliberates National Green Hydrogen Strategy: NEECA discussed the National Green Hydrogen Strategy (NGHS) to formulate plans for exporting green hydrogen to China, Japan, and South Korea. Dr. Sardar Moazzam emphasized utilizing Pakistan's Indigenous Renewable Energy (IRE) resources, highlighting hydrogen's potential as an energy vector to address energy supply challenges. [BR]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• Pakistan IMF Programme: Finance Minister Aurangzeb mentioned that Pakistan will be at least requesting for a three-year programme. The IMF proposed taxing non-essential items, like cigarettes, for short-term and long-term tax reforms to increase revenue and enhance public health. This recommendation, supported by health advocates and experts, suggests harmonizing rates across items and broadening the tax base to include products such as e-cigarettes. [BR] [Dawn] [Dawn]
• Saudi Foreign Minister Visits Pakistan: Saudi Foreign Minister Prince Faisal Bin Farhan Al Saud arrived at Rawalpindi’s Nur Khan Airbase for a two-day visit, receiving a warm welcome from his counterpart Mohammad Ishaq Dar and Ambassador Nawaf bin Saeed Ahmad Al-Malkiy. The visit aims to enhance bilateral cooperation and economic partnership, according to the Ministry of Foreign Affairs. [Dawn] [ET] [The News]
• PSX Hits Record High on Oil & Banking Stocks: On Monday, the Pakistan Stock Exchange (PSX) reached new record highs, buoyed by gains in oil and banking stocks amidst an earnings season rally. Despite initial volatility and concerns over geopolitical tensions, market sentiment improved during the day, driven by expectations of increased trade and foreign investment following a visit from a Saudi Arabian delegation. [ET]
• Debate Over State Bank Interest Rate Cut: Analysts are divided on whether the State Bank of Pakistan will cut interest rates to stimulate growth or maintain stability. Market anticipates rate cuts in April and June, with some expecting a significant 400 basis point cut this quarter, given positive indicators like easing price pressures and positive real interest rates for the first time in nearly three years. [The News]
• Shehbaz Sharif Pushes Solar Energy Investment: Prime Minister Shehbaz Sharif urged swift action on foreign investment in solar energy projects and emphasized transitioning coal-based power plants to local coal during a Power Division meeting. The meeting also discussed a 600 MW solar power project and proposed better utilization of existing electricity capacity in industries. [BR] [ET]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• Israel-Iran Conflict: Iran stated that its missile and drone attack on Israel inaugurated a new strategy, warning of a strong response to any future aggression. This marks a departure from past proxy conflicts, with Israel's military claiming to have intercepted 99% of the threats with US and allied assistance, resulting in minimal damage. Iran President Ebrahim Raisi has declared Tehran’s aerial attack against Israel to be a success and said Iran would deliver an even more “painful” blow if there are future threats to its interests, Al Jazeera reports citing the Irna news agency. [Dawn] [Dawn] [Al-Jazeera]
• IMF, World Bank Spring Meetings Focus on Climate, Debt Relief: The spring meetings of the IMF and World Bank start Tuesday with a focus on combating climate change and aiding heavily indebted nations. The gatherings will feature discussions on the global economy's status, beginning with the release of the IMF's updated World Economic Outlook. [Dawn]
• Trump's NY Trial: Donald Trump's New York criminal trial began, a historic first for a former US president and a significant development in the tumultuous 2024 presidential election. In court, Judge Juan Merchan greeted Trump as the defendant. Trump, aims to spin his criminal cases as evidence of persecution. [Dawn] [ET]
• Global Coral Bleaching Event: Fourth in Three Decades: Coral reefs worldwide, from Australia to Kenya to Mexico, are undergoing a widespread bleaching event—the fourth global occurrence in three decades. Since February last year, 54 countries and territories have experienced mass bleaching due to climate change-induced warming of ocean surface waters, as reported by NOAA's Coral Reef Watch. [Dawn] [ET]
• Brazil's Soybean Harvest Reaches 84%: Brazil's soybean harvest for the 2023/24 cycle has reached 84% of the planted area, according to AgRural. Harvesting is focused in Rio Grande do Sul, with productivity reported as very good. Recent rains have benefitted the second corn crop in regions previously struggling due to high temperatures and lack of rainfall. [BR]
• Palm Oil Futures Hit Two-Week Low: Malaysian palm oil futures fell to their lowest closing in over two weeks due to weak global demand and lower crude prices. The benchmark contract for June delivery closed down 1.87% at 4,202 ringgit ($879.63) per metric ton, its lowest since March 29. Analysts noted some support from Chinese buying but overall demand remained subdued. [BR]
• Oil Prices Drop After Iran's Attack on Israel: Oil prices fell on Monday following Iran's attack on Israel, which was less damaging than feared, easing concerns of a rapid escalation in conflict. Brent futures for June delivery settled at $90.10 a barrel, down 35 cents (0.4%), while US crude futures for May delivery ended at $85.41 a barrel, down 25 cents (0.3%). [BR]

OPINION(S) & REMAINDERS

• Opinion: Need for a Population Management Council - “The recent electoral manifestos of Pakistan’s major political parties marked a momentous moment, reflecting a concerted focus on addressing the social issues confronting the nation, with particular emphasis on the underlying challenge of rapid population growth. Now, with the PPP, PML-N and PTI forming governments at federal and provincial levels, the imperative lies in translating these pledges into tangible actions aimed at enhancing the quality of life for the people.” - By Dr Ali M Mir [ET]