PAR News - Fri, 17th Mar 2023

17/03/23 - Army Agri Land Takeover, NRL oil supply halt, IMF deal, SBP Reserves, Credit Suisse Lifeline

PAR News

March 17, 2023

News

TOPLINE

The Pakistan Army has asked the Board of Revenue, Punjab to hand over 45,267 acres of state land to the Army for corporate farming in West Punjab.
National Refinery Limited (NRL) has decided to halt supply to Pakistan State Oil (PSO) after the state-owned oil marketing company stopped the payments to the refinery. NEPRA is set to allow an electricity surcharge of up to Rs 3.23 per unit for next fiscal year beginning July 1, 2023.
Pakistan's Finance Minister, Ishaq Dar, assured that the country's nuclear and missile program would not be compromised, while addressing the Senate about the delay in signing an agreement with the IMF.
The State Bank of Pakistan will soon receive $500 million from the Industrial Credit Bank of China, which will increase its reserves to $4.8 billion.
Credit Suisse has secured a $54 billion lifeline from the Swiss National Bank to boost investor confidence after its worst-ever day on the stock exchange on Wednesday, when shares plunged over 30%.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

Textile Material Export: Rs 7.02 billion was the export value of art, silk and synthetic textile in Jan 2023, up 5.7% as compared to Rs 6.6 billion in Jan 2022, according to the PBS. [ET]
Cotton Market: The Karachi Cotton Association's Spot Rate Committee decreased the spot rate by Rs 300 per maund to close at Rs 19,500 per maund, while the local cotton market remained bearish with low trading volume. Cotton prices in Sindh are in the range of Rs 17,500-19,500 per maund, and Phutti prices in Sindh are between Rs 7,000-8,300 per 40 kg. [BR]
Drought Threatens Food Output: The drought-hit regions of northern and central India, up to Pakistan, are expected to face lower than normal rainfall due to the El Nino weather pattern, leading to lower food output and high prices. The trend is likely to affect cereal and oilseed crops across Asia, while some growing regions in North and South America are likely to see more crop-friendly weather, according to meteorologists. [Dawn]
Pakistan Army's Agriculture Farming: The General Headquarters Lands Directorate has asked the Board of Revenue, Punjab to hand over state lands of 45,267 acres to the Pakistan Army for corporate agriculture farming. The Director General Strategic Projects, Pakistan Army through a letter, a copy of which is available with Business Recorder, addressed to the Member (Colonies), Board of Revenue, Punjab, has asked for handing over the state lands in three districts of Punjab including Bhakkar, Khushab, and Sahiwal. [BR] [Dawn] [Dunya]

AGRI-INPUTS, WEATHER, WATER & POWER

Nepra Criticizes Electricity Prices: The five-member National Electric Power Regulatory Authority (Nepra) strongly criticized the government for an unprecedented and continuing hike in electricity prices without addressing the structural problems in the power distribution companies as the regulator appeared set to allow an electricity surcharge of up to Rs 3.23 per unit for next fiscal year beginning July 1, 2023. [Dawn]
NRL Halts PSO Supply: National Refinery Limited (NRL) has decided to halt supply to Pakistan State Oil (PSO) after the state-owned oil marketing company stopped the payments to the refinery, The News learnt on Thursday. PSO has been suffering from a severe financial crisis due to lack of payments from various sectors on account of supply of petroleum products. Currently, the PSO owes NRL Rs 3.469 billion. [The News]
US Aid for Pakistani Farmers: The United States Thursday announced a $4.5 million new programme to strengthen fertilizer efficiency and effectiveness for Pakistani farmers, and the two sides expressed their recommitment to tackling the climate crisis through cooperation, mitigation and adaptation. [BR]
Power Surcharge Hike Criticized: The Pakistani government's decision to increase the power surcharge by Rs 1.80 per unit has been criticized by officials from the National Electric Power Regulatory Authority (NEPRA) and consumers, as the surcharge will increase from Rs 1.43 per unit to Rs 3.23 per unit to pay off circular debt and cover the cost of power theft by power distribution companies (DISCOs). [ET]

AGRI UPDATES & PAKISTAN POLICY

Pakistan Assures no Compromise: Pakistan's Finance Minister, Ishaq Dar, assured that the country's nuclear and missile program would not be compromised, while addressing the Senate about the delay in signing an agreement with the International Monetary Fund (IMF). Senator Raza Rabbani expressed his disappointment about the lack of transparency with the Parliament about the conditionalities of the IMF loan facility, and raised concerns that the delay may be due to pressure on Pakistan's nuclear program. [The News] [Dawn] [ET]
IMF Deal Last Hurdle: Finance Minister Ishaq Dar said on Thursday that an assurance from “friendly countries” to fund a balance of payment gap was the last hurdle in securing an IMF deal, which will offer a critical lifeline to avert an economic meltdown. [BR]
Arrest Warrant Rejection for Imran Khan: The Additional District and Sessions Judge (ADSJ), Islamabad, Zafar Iqbal, on Thursday rejected former prime minister Imran Khan’s request seeking suspension of non-bailable arrest warrants issued in the Toshakhana case and once again directed the police to arrest the PTI chairman to present him in court on March 18. [The News]
Imran Khan Ready to Negotiate: Imran Khan, indicated flexibility in his stance and expressed his readiness to talk to anyone for the sake of the country and democracy, after a court kept his arrest warrants in play and police showed their resolve to execute the warrants in the Toshakhana case. [Dawn] [ET]
PTI Demands Simultaneous Elections: The Khyber-Pakhtunkhwa (K-P) Governor Haji Ghulam Ali on Thursday said, “Several Members of the National Assembly (MNAs) of Pakistan Tehreek-e-Insaf (PTI) wanted elections of both national and provincial assemblies at the same time.” [ET]
Petition to Disqualify President Dismissed: The Supreme Court of Pakistan has dismissed a petition filed by Zahoor Mehdi, a citizen, seeking the disqualification of President Dr Arif Alvi. The court held that an endorser of the presidential candidate must be a member of the Parliament as per constitutional requirements. [The News]
Pakistan's Foreign Exchange: Pakistan's foreign exchange holdings increased by $92 million to $9.847 billion during the week ended March 10, due to higher inflows of remittances and export proceeds. Additionally, the State Bank of Pakistan (SBP) will soon receive $500 million from the Industrial Credit Bank of China, which will increase its reserves to $4.8 billion. [Dawn]
Supreme Court Rules on Super Tax: The Supreme Court of Pakistan ruled that companies with pending cases in the Islamabad High Court must pay 50% super tax. The decision was made during a hearing on a super tax case, where the court directed the Islamabad and Lahore High Courts to quickly resolve the matter before further action is taken. [The News]
Disbursement of ICBC Loan: Finance Minister Ishaq Dar has stated that documentation for second disbursement of US 500 million dollars from Industrial and Commercial Bank of China (ICBC) has been completed. The minister tweeted that out of ICBC’s approved rollover facility of $1.3 billion (which was earlier repaid by Pakistan to ICBC in recent months), documentation for the second disbursement of $500 million has been completed by the Finance Ministry for the release of funds to the State Bank of Pakistan. [BR]
Dollar Exchange in Pakistan: In the hustle and bustle of Chowk Yadgar, formerly known as the Hasting’s Memorial, a young man, whilst shouting “come purchase dollars and dinars,” can be seen frantically beckoning passersby to come check out the seemingly amazing exchange rate that is on offer. [ET]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

ECB Raises Interest Rates: The European Central Bank raised interest rates by 50 basis points on Thursday as promised, ignoring financial market chaos and calls by investors to dial back policy tightening at least until sentiment stabilizes. [BR]
Credit Suisse Secures $54 Billion Lifeline: Credit Suisse has secured a $54 billion lifeline from the Swiss National Bank to boost investor confidence after its worst-ever day on the stock exchange on Wednesday, when shares plunged over 30%. The embattled bank has also made a buyback offer of around $3 billion worth of debt, and analysts remain cautious about the bank's future despite the stock's recovery on Thursday. [Dawn] [IN]
Iran-Saudi Arabia Relations: Iran had been attempting to restore ties with Saudi Arabia for two years before China's secret role in accelerating the process led to the recent breakthrough in talks, according to two Iranian officials. The deal, struck after a seven-year diplomatic rupture, could mean improved security for Saudi Arabia, which in 2019 blamed Iran for attacks on its oil installations that knocked out half of its supply. [Dawn]
Iranian Security Official Visits UAE: Iran's top security official held high-level talks in the United Arab Emirates on Thursday as Tehran seeks greater outreach to Gulf states amid mounting tensions with the West over the country's nuclear work and its drone sales to Russia. [ET] [Reuters] [AN]
Oil Prices: Oil prices rose 2% on Thursday after dropping to near 15-month lows earlier in the session, supported by reports that top producers Saudi Arabia and Russia met to discuss ways to enhance market stability. Brent crude futures rose $1.61, or 2.2%, to $75.30 a barrel by 1:08 p.m. EDT (1708 GMT). West Texas Intermediate crude futures (WTI) rose $1.53, or 2.3%, to $69.14 a barrel. [BR]