PAR News - Wed, 08 May 2024

TOPLINE

• The Economic Coordination Committee (ECC) of Pakistan has increased Passco's wheat procurement target from 1.4 million to 1.8 million tonnes and approved importing 200,000 metric tons of urea.
• The University of Agriculture, Faisalabad, has launched the Pakistan-China Joint Lab for Artificial Intelligence and Smart Agriculture to promote advanced farming techniques.
• Cotton Analyst Naseem Usman reported to Business Recorder that cotton prices in Sindh and Punjab are currently ranging from Rs 19,500 to Rs 21,500 per maund.
• Urea sales plummeted to a three-year low in April, falling 49% month-on-month to 328,000 tonnes and 33% year-on-year. Meanwhile, DAP sales dropped 12% month-on-month to 92,000 tonnes but surged 82% year-on-year.
• The Karachi Water and Sewerage Corporation (KWSC) board, led by Mayor Murtaza Wahab, approved a Rs 12 billion project to construct a new canal and rehabilitate an existing one, aimed at increasing water supply from Hub Dam to Karachi.
• Sindh Agriculture University (SAU) and United Bank Limited (UBL) have teamed up to tackle the issue of substandard cotton seeds in Sindh, which has been causing significant crop losses.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Ex-PM Kakar Clarifies Wheat Import Comments: Former caretaker Prime Minister Anwarul Haq Kakar denied blaming the provinces for the excessive wheat imports, attributing the misrepresentation to false media reports. According to Dawn, Pakistan imported around 3.2 million tonnes of wheat between September 2023 and March 2024, coinciding with the arrival of the local crop in April. [Dawn] [ET]
• ECC Expands Wheat & Urea Plans: The Economic Coordination Committee (ECC) of Pakistan has increased Passco's wheat procurement target from 1.4 million to 1.8 million tonnes and approved importing 200,000 metric tons of urea. Additionally, it authorized releasing funds to clear Rs 70 billion and Rs 55 billion in tariff differential subsidies for KE and AJK, respectively. The cabinet also approved an extra 400,000 tonnes of wheat procurement and around Rs 144 billion in supplementary grants. [BR] [Dawn] [ET] [The News]
• Cotton Prices Steady in Pakistan: Cotton Analyst Naseem Usman reported to Business Recorder that cotton prices in Sindh and Punjab are currently ranging from Rs 19,500 to Rs 21,500 per maund. In Punjab, the prices for phutti (raw cotton) are between Rs 9,500 and Rs 10,000 per 40 kg. The spot rate for cotton has remained steady at Rs 19,700 per maund, and polyester fiber is priced at Rs 367 per kg. [BR]
• Spices Export: Rs 2.48 billion was the export value of spices in March 2024, up 6.40% compared to Rs 2.33 billion in March 2023, according to the Pakistan Bureau of Statistics. [ET]
• UAF, China Partner on AI Agriculture Lab: The University of Agriculture, Faisalabad, has launched the Pakistan-China Joint Lab for Artificial Intelligence and Smart Agriculture to promote advanced farming techniques. The lab, inaugurated by UAF Vice Chancellor Dr. Iqrar Ahmad Khan and Dr. Wu Jun, CEO of CAS Cogniser, aims to boost agricultural productivity. [ET]

ENERGY - WEATHER, WATER & POWER

• Sindh Faces Soaring Temperatures: The Met department predicts a rise in daytime temperatures across Sindh for the next three days due to high pressure in the upper atmosphere. Expect temperatures to be 3-5 degrees Celsius above normal, reaching 45-47°C in upper and central districts, and 36-38°C in Karachi, where the maximum was 37.1°C with 54% humidity on Tuesday. [Dawn]
• Fertilizer Sales Hit Three-Year Low: Urea sales plummeted to a three-year low in April, falling 49% month-on-month to 328,000 tonnes and 33% year-on-year. Meanwhile, DAP sales dropped 12% month-on-month to 92,000 tonnes but surged 82% year-on-year. The decline in fertilizer sales is linked to delays in the wheat harvest and expectations of falling urea prices, leading dealers to purchase cautiously. [Dawn]
• Karachi Approves Major Water Project: The Karachi Water and Sewerage Corporation (KWSC) board, led by Mayor Murtaza Wahab, approved a Rs 12 billion project to construct a new canal and rehabilitate an existing one, aimed at increasing water supply from Hub Dam to Karachi. The project, set to complete in 12 months, will boost the city's water supply by 200 million gallons per day. [Dawn]
• Pakistan Affirms Sovereignty Over Pipeline: Pakistan's Foreign Minister asserted the nation's sovereignty and commitment to its own interests regarding the gas pipeline project, stating that Pakistan cannot be dictated to by the U.S. He emphasized that Pakistan will make decisions in its best interests despite any complications, while also stressing the importance of mutual respect for sovereignty in international relations. [The News] [ET]
• Discos Seek Tariff Hike Approval: Power Distribution Companies (Discos) have filed a request with the National Electric Power Regulatory Authority (Nepra) to increase electricity tariffs by up to Rs 1.60 per unit to recover an additional Rs 52 billion from consumers. This adjustment, primarily for capacity charges of Rs 31.348 billion to power plants, is for the third quarter of FY 2023-24. Nepra is scheduled to hold a public hearing on this matter on May 17, 2024. [BR] [The News]
• OGRA Plans Petroleum Deregulation: Mansoor Khan, the chairman of the Oil and Gas Regulatory Authority (OGRA), announced that the government will gradually deregulate petroleum prices, consulting with all relevant stakeholders including dealers and oil marketing companies. This phased approach follows the government's decision to deregulate High Speed Diesel and petrol. [The News]
• Liquified Natural Gas Import: Rs 81.6 billion was the import value of LNG in March 2024, down 3.3% compared to Rs 84.4 billion in March 2023. [ET]
• OGDCL Share Transfer Proposal: The Privatisation Division seeks CCoP approval to transfer 322,460,900 shares of OGDCL to the Petroleum Division, then to the Pakistan Sovereign Wealth Fund. Originally slated for divestment, market response led to postponement in 2014, and in 2021, divestment was officially halted. [BR]
• SAU, UBL Address Cottonseed Crisis: Sindh Agriculture University (SAU) and United Bank Limited (UBL) have teamed up to tackle the issue of substandard cotton seeds in Sindh, which has been causing significant crop losses. SAU is working to provide certified cotton seeds across the province, identifying the use of poor-quality seeds from private suppliers as a key problem in the cotton sector. [BR]
• ADB Flags NTDC Project Delays: The Asian Development Bank (ADB) has highlighted implementation challenges, particularly procurement delays, in NTDC projects in Pakistan, posing risks to future multi-billion dollar projects. The findings were revealed during an ADB mission visit to Pakistan from April 15-26, 2024, involving a team of energy and development specialists. [BR]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• Saudi Investment Boosts Pakistan Ties: Prime Minister Shehbaz Sharif commended the positive impact of a Saudi investment delegation's visit to Islamabad on Pakistan-Saudi relations. In a federal cabinet meeting, the cabinet also approved Air Sial's new flight operations to several countries, aligning with the National Aviation Policy 2023. [The News]
• Military Demands Regret from Rioters: Ahead of the first anniversary of the May 9 riots, the military stated that participants must sincerely regret their actions and reject "politics of anarchy and hate" before any discussions can begin. This was emphasized by Maj Gen Ahmed Sharif of Inter-Services Public Relations during a press conference, referencing the violence following PTI founder Imran Khan's arrest. [Dawn] [ET]
• Pakistan Plans Universal Pension Reform: Ahead of IMF negotiations and the budget, the Pakistani government plans to implement a universal pension reform that includes raising the retirement age for all public servants, including the armed forces and judiciary. Law Minister Azam Nazeer Tarar stated that this would involve amending relevant acts and the constitution to ensure comprehensive application. [The News]
• Pension Reforms to Ease Financial Strain: Finance Minister Muhammad Aurangzeb stated that the pension system has become a significant financial liability, requiring gradual service structure reforms to reduce costs. He also mentioned that a visiting Saudi delegation's positive business meetings have boosted investor confidence, reflecting improved economic indicators. [BR]
• Tribal Areas' Tax Exemption Ending: The government will not extend the exemption from duties and taxes for the erstwhile tribal areas beyond June 30, 2024, aiming to generate an additional Rs 45 billion in revenue in the 2024-25 budget. This exemption was previously extended for one year under the Finance Act, 2023. [BR]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• HRW Condemns Israeli Strike, Protests Spread: Human Rights Watch labeled an Israeli strike in Lebanon that killed seven first responders as "an unlawful attack on civilians" and called on the U.S. to suspend weapons sales to Israel. Concurrently, student protests advocating for universities to cut ties with Israel due to its actions in Gaza have been spreading across Europe. Recently, police intervened in demonstrations in the Netherlands, Germany, and France. [Dawn] [Dawn] [ET]
• Iran Evades Sanctions via Malaysia: A senior U.S. Treasury official stated that Iran has been using Malaysian service providers to evade international sanctions and sell its oil in East Asia. These sales are said to fund armed proxies like Hamas and Yemen’s Houthis, contributing to regional instability. [BR]
• Putin Inauguration: Confrontation or Cooperation - At his inauguration for a new six-year term, Russian President Vladimir Putin stated that the choice between confrontation and cooperation lies with the West. The ceremony, boycotted by the US and its allies amid ongoing conflict in Ukraine, saw Putin commending Russian soldiers and declaring his re-election as proof of national unity and correct direction. [BR] [Dawn]
• Global Debt Hits $315 Trillion: Global debt has reached a record $315 trillion in the first quarter, driven by borrowing in emerging markets, the United States, and Japan, according to the Institute of International Finance (IIF). The debt-to-output ratio, indicating the ability to repay, increased to 333% as global debt rose by $1.3 trillion compared to the previous quarter. [BR]
• India Reduces Troops in Maldives: India has withdrawn more than half of its troops stationed in the Maldives ahead of a Friday deadline, as the island nation strengthens ties with China. This troop reduction aligns with the commitment of the Maldives' pro-China President Mohamed Muizzu to diminish India’s political influence in the country. [Dawn] [ET]
• Global Shift to EVs Prompts New Taxes: As the global shift from combustion engines to electric vehicles (EVs) risks creating a $110 billion shortfall in government revenues from reduced fuel duties, policymakers worldwide are introducing new taxes on EVs and hybrid vehicles. This approach has been adopted by the UK, New Zealand, Israel, and the majority of US states, aiming to offset the decrease in petrol and diesel tax receipts. [The News]
• Oil Prices Stabilize, Palm Oil Rises: Oil prices stabilized on Tuesday, with Brent crude falling 0.4% to $82.97 a barrel and US West Texas Intermediate also dropping 0.4% to $78.20 a barrel, amid easing supply concerns and signs of weakening demand. Meanwhile, palm oil futures rose 1.76% to 3,930 ringgit per metric ton on the Bursa Malaysia Derivatives Exchange, reaching the highest close since April 25. [BR] [BR]

OPINION(S) & REMAINDERS

• CCP Reviews PTCL-Telenor Merger: The Competition Commission of Pakistan (CCP) has completed the first phase of its review for a pre-merger application involving Pakistan Telecommunication Company Limited (PTCL) acquiring 100% shareholding of Telenor Pakistan (Private) Limited (TP) and Orion Towers Private Limited (OT) from Telenor Pakistan BV (TPBV). [BR]
• Opinion: Modi & MPs from Pakistan - “REVANTH Reddy, the waggish Congress chief minister of Telangana, was fielding questions from a BJP-hugging TV anchor about Prime Minister Narendra Modi’s prospects in the ongoing elections. “Do I see myself accepting that Mr Modi is coming back with 400 seats? It’s mathematically not possible, unless he is also counting MPs from Pakistan.” The Lok Sabha has 543 elected seats, and, so far, only Rajiv Gandhi has won 400-plus seats following Indira Gandhi’s assassination in 1984.” - By Jawed Naqvi [Dawn]