PAR News - Thurs, 13 Aug 2023

TOPLINE

• The interim government is expected to announce a substantial increase in ex-depot prices of petroleum products, possibly up to Rs 10 per liter, effective from September 16, 2023.
• The Karachi Cotton Association's Spot Rate Committee raised the spot rate by Rs 500 to Rs 19,000 per maund.
• A protest was held in Landi Kotal, Pakistan, against the extended closure of the Torkham border. The demonstration included political activists, transporters, traders, Customs clearing agents, laborers, and local organization representatives.
• The International Finance Corporation (IFC) has pledged around $1.5 billion in short and long-term investments in Pakistan for the fiscal year 2023-24, doubling its investments from the previous year.
• President Dr. Arif Alvi has written to Chief Election Commissioner Sikandar Sultan Raja, specifying that, in accordance with Article 48 (5) of the Constitution, the general election to the National Assembly should be held on November 6, 2023, within 90 days after the dissolution of the National Assembly.
• A tragic fire in Hanoi, Vietnam, claimed the lives of 56 people, making it the deadliest fire in the country in 20 years.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

• Karachi Cotton Association Raises Spot Rate: The Karachi Cotton Association's Spot Rate Committee raised the spot rate by Rs 500 to Rs 19,000 per maund. Cotton prices vary across regions: Sindh - Rs 18,500 to Rs 19,000 per maund, Punjab - Rs 19,000 to Rs 19,500 per maund, Balochistan - Rs 18,500 to Rs 19,000 per maund. Phutti (raw cotton) prices also vary: Sindh - Rs 8,000 to Rs 9,000 per 40 kg, Punjab - Rs 8,000 to Rs 8,200 per 40 kg, Balochistan - Rs 8,500 to Rs 9,500 per 40 kg. [BR]
• Punjab Takes Action Against Whitefly Infestation: Pest management teams in Punjab are taking action to combat a whitefly infestation, resorting to cluster spraying. Experts estimate that around half of the standing crop in hotspot areas may already be damaged. Drones and high-pressure spray machines are being used to target affected and neighboring fields where the whitefly seeks refuge to avoid pesticides. [Dawn]
• Textile Export Boost Proposals: Syed Usman Ali, Senior Vice Chairman of the Towel Manufacturers Association of Pakistan (TMA), has submitted proposals to the Ministry of Commerce's Textile Wing to boost textile exports. He highlighted the need for providing competitive facilities to match regional countries, citing the challenge of high business costs, which lead international buyers to shift their orders to countries offering lower-priced, quality products. [BR]
• Pakistan's Exports to Regional Countries: In the first month of the current fiscal year, Pakistan's exports to nine regional countries declined by 14.55%, driven by reduced shipments to China. These exports amounted to $260.983 million, making up 12.62% of the total exports of $2.068 billion in July. Importantly, imports from China also saw a notable decrease in July compared to the previous year. In the previous fiscal year (FY23), exports to regional countries dropped by 21.1%, totaling $3.331 billion year-on-year. [Dawn]

AGRI-INPUTS, WEATHER, WATER & POWER

• Expected Price Hike in Petroleum Products: The interim government is expected to announce a substantial increase in ex-depot prices of petroleum products, possibly up to Rs 10 per liter, effective from September 16, 2023, according to estimates. This could result in significant price hikes for petrol, high-speed diesel (HSD), kerosene oil (KERO), and light diesel oil (LDO) in the next fortnight of September. These estimates are based on current government taxes on petroleum products, including a petroleum levy (PL) of Rs 60 per liter on petrol and Rs 50 per liter on HSD, to meet IMF conditions. [BR] [Dawn]
• Landi Kotal Protest Over Torkham Border Closure: A protest was held in Landi Kotal, Pakistan, against the extended closure of the Torkham border. The demonstration included political activists, transporters, traders, Customs clearing agents, laborers, and local organization representatives. Protesters expressed their concerns, calling the border's closure an economic hardship for those engaged in bilateral trade and various manual jobs. [Dawn]
• Peshawar High Court Seeks Response on High Power Bills: The Abbottabad Circuit Bench of the Peshawar High Court has directed the federal government, NEPRA, and the energy minister to respond to a petition against high power bills. The petitioners raised concerns about unjustified taxes and surcharges, stating that people cannot afford the inflated electricity prices. The next hearing for the case will be scheduled later. [Dawn]
• Lesco's Recovery Campaign: Rs 27 Million Recovered on Day One - On the first day of its recovery campaign, the Lahore Electric Supply Company (Lesco) collaborated with tehsildars to recover a total of Rs 27 million from 1,276 chronic defaulters in various operational circles. Lesco's chief engineer O&M (T&G), Zafar Iqbal, with the assistance of city tehsildar Mujahid Zia and Shalimar tehsildar Noreez Humayun, successfully recovered outstanding dues, including Rs4.31 million from 145 defaulters in the northern circle and Rs 3.51 million from 249 defaulters in the eastern circle. [Dawn]
• Afghan Coal Import Price Update: The import value of Afghan-origin coal in Pakistan's Khyber Pakhtunkhwa region has been reduced from USD 140 to USD 95 per metric ton by the Directorate of Customs Valuation in Peshawar, replacing the previous valuation advice from August 17, 2022. This change applies exclusively to coal imported through land border Customs stations in KP and does not impact other cases. The new valuation advice has been communicated to relevant authorities. [BR]
• Smuggling & Tax Evasion Impact: IB Report - An Intelligence Bureau report highlights significant economic damage caused by criminal networks engaged in smuggling, tax evasion, drug trade, and misuse of Afghan transit trade in Pakistan. It outlines efforts to combat economic threats, citing an annual loss of at least Rs 225 billion to the national treasury due to the illegal supply of Iranian petroleum products, which are now being sold not only at illegal roadside outlets but also at regular petrol stations. [The News]
• Global Oil Price Hike: Impact on Fuel Prices - Global oil price increases may raise petroleum product prices in the next fortnight. The strengthening rupee in the interbank market could partially offset the hike. Industry estimates suggest petrol may increase by Rs 16 per liter, and high-speed diesel (HSD) by Rs 13.66 per liter, with ex-depot prices for petrol at Rs 321.35 per liter (up from Rs 305.36) and HSD at Rs 325.50 per liter (up from Rs 311.84). [The News]
• Justice Jamal Mandokhail: Reko Diq Deal Review Findings - Justice Jamal Mandokhail, a member of the Supreme Court of Pakistan bench that reviewed the Reko Diq deal, stated that the agreements do not violate any findings in the matter. He emphasized that these agreements were made in accordance with the law and after careful negotiations with the involvement of authorized representatives and international consultants. [BR] [ET]
• Jazz Issues Rs 10 Billion Defamation Notice to SNGPL: Jazz has issued a Rs 10 billion defamation notice to Sui Northern Gas Pipeline Limited (SNGPL) in response to allegations of gas theft. Jazz strongly denies the gas theft claim and asserts that there is no provision for natural gas at any of its network sites, as evidenced by a picture of a diesel generator shared by SNGPL itself. Jazz emphasizes its legitimate electricity and fuel arrangements and warns that baseless accusations can harm investor confidence and the national economy. [The News]
• CM Baqar Pushes for KCR Inclusion in CPEC: Caretaker Chief Minister retired Justice Maqbool Baqar on Wednesday directed the transport department to prepare a comprehensive presentation of the Karachi Circular Railway (KCR) by removing all the bottlenecks so that the project could be approved as one of the China-Pakistan Economic Corridor (CPEC) schemes in a meeting scheduled to be held in Beijing next month.  He issued these directives while presiding over a meeting to review the progress of ongoing transport projects here at the CM House. [Dawn] [ET]
• SHC Orders Uninterrupted Water Supply to DHA: The Sindh High Court has ordered the Cantonment Board Clifton (CBC), Defence Housing Authority (DHA), and Karachi Water and Sewerage Corporation (KWSC) to ensure uninterrupted water supply to DHA residents through normal pipelines. A judicial panel, led by Justice Aqeel Ahmed Abbasi, has also directed officials to hold a joint meeting within 15 days to address the issue and improve water supply via pipeline connections. [Dawn]
• Sindh Caretaker Minister Warns Against Feudal Lords Linked to Dacoits: Sindh Caretaker Minister for Law and Human Rights, Muhammed Umar Soomro, has issued a stern warning that any feudal lord or politician linked to dacoits will face legal action. He emphasized the caretaker government's determination to eliminate the culture of dacoits and assured there is no undue pressure on them. The meeting in Kashmore assessed the law and order situation and discussed minorities' and human rights issues with input from stakeholders. [Dawn]

AGRI UPDATES & PAKISTAN POLICY

• President Alvi Sets Date for National Assembly Election: President Dr. Arif Alvi has written to Chief Election Commissioner Sikandar Sultan Raja, specifying that, in accordance with Article 48 (5) of the Constitution, the general election to the National Assembly should be held on November 6, 2023, within 90 days after the dissolution of the National Assembly. The president's letter notes that the National Assembly was dissolved on August 9, 2023, following the prime minister's advice. [BR] [Dawn] [Dawn] [ET]
• Russian Ambassador Praises Imran Khan: Russian Ambassador to Pakistan, Danila Ganich, praised former Prime Minister Imran Khan as a "legend" and an "honest and courageous leader." He mentioned productive discussions between Khan and President Putin during Khan's visit to Moscow last year. Ganich shared his personal opinion during a speech on Pakistan-Russia diplomatic relations at the Islamabad Policy Research Institute. Imran Khan is currently in jail, facing trial for leaking diplomatic information. [BR]
• IFC's $1.5 Billion Investment Boost for Pakistan: The International Finance Corporation (IFC) has pledged around $1.5 billion in short and long-term investments in Pakistan for the fiscal year 2023-24, doubling its investments from the previous year. These investments come at a time of economic challenges and are directed toward projects that focus on job creation, boosting private sector productivity, promoting gender inclusion, and addressing climate change impacts in Pakistan. [BR]
• PIA's Bank Accounts Unfrozen Amid Tax Dispute: The FBR has unfrozen PIA's bank accounts after temporarily attaching them due to unpaid taxes of over Rs 8 billion. PIA's cash flow issues affected tax payments, but discussions with tax authorities were underway. The ECC of the Cabinet has prioritized PIA's privatization over restructuring, as the airline is on the active privatization list. [BR] [BR]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

• Asian Apparel Climate Impact: Extreme heat and flooding in four Asian countries (Bangladesh, Cambodia, Pakistan, Vietnam) could result in a $65 billion loss in apparel export earnings by 2030. This would affect workers and factory operations. Six global apparel brands in these countries could also face material impacts, potentially impacting up to 5 percent of annual group operating profits for one brand. This highlights the need for the apparel industry and investors to address climate-related financial risks and gain better insights into company exposure. [Dawn] [The News] [Reuters] [Eco-Business]
• Putin Suggests Possible Military Cooperation with North Korea: Russian President Vladimir Putin mentioned the possibility of military cooperation with North Korea despite international sanctions during an interview with state television. He noted that there are limitations within the existing rules, but there are discussions about potential opportunities for cooperation. This statement came after his summit with North Korean leader Kim Jong Un. [Dawn] [BBC] [Al Jazeera] [CNN] [Reuters] [WP]
• Tech Leaders Discuss AI Regulation on Capitol Hill: Prominent American technology leaders, including Elon Musk, Mark Zuckerberg, and Sundar Pichai, met with lawmakers at Capitol Hill for a closed-door forum to discuss the regulation of artificial intelligence (AI). Lawmakers are grappling with how to manage the risks associated with AI, which has gained significant investment and popularity, especially since the emergence of OpenAI's ChatGPT chatbot. [Dawn] [MM] [WION] [CNBC] [Reuters] [Bloomberg]
• Hanoi Tragedy: Deadliest Fire in 20 Years - A tragic fire in Hanoi, Vietnam, claimed the lives of 56 people, making it the deadliest fire in the country in 20 years. The fire started in the parking area of a 10-storey building, filled with motorbikes, just before midnight. At least three children were among the victims, and the owner of the apartment block has been arrested on suspicion of violating fire prevention regulations, according to Hanoi police. [BR] [Dawn] [BBC] [DW] [Al Jazeera] [AP] [WP] [AP]
• Tragic Capsizing Off Lampedusa Claims Infant's Life: A tragic incident occurred off the Italian island of Lampedusa as a boat carrying migrants capsized during a rescue operation. Sadly, a five-month-old baby boy drowned in the incident. Lampedusa has seen a surge in migrant arrivals, with about 1,850 new arrivals reported on the same day, bringing the total number of migrants on the island to over 6,700. The Italian coastguard successfully rescued all other passengers, including the baby's mother. [Dawn] [Yahoo] [DW] [InfoMigrants]
• IEA Warns of Oil Supply Shortage: The International Energy Agency (IEA) has warned that oil production cuts by Saudi Arabia and Russia will result in a "significant" global supply shortage for the rest of the year, increasing the risk of market volatility. This caution follows OPEC's recent update, which indicated that the gap between global supply and demand would be the widest since 2007, contributing to a spike in oil prices. [BR]
• Oil Prices Stabilize After Hitting 10-Month High: Oil prices were relatively stable on Wednesday, after reaching a 10-month high earlier, due to a surprise increase in US crude inventories that countered expectations of tight crude supply for the remainder of the year. International benchmark Brent futures fell by 7 cents to $91.99 a barrel, with its session high at $92.84, the highest since November. US West Texas Intermediate crude (WTI) also declined by 11 cents to $88.73, with its session high at $89.64, also the highest since November. [BR] [Dawn]

PAKISTAN - REMAINDERS

• Tragic Chairlift Accident Claims Woman's Life in Abbottabad. [Dawn]
• Opinion: The Rupee’s Crash - “THE spiral of inflation and devaluation the country is caught up in did not begin a few months ago. It began in 2021. The growing imbalance between rupee and dollar liquidity is what lies behind the inflation and devaluation.” - By Khurram Hussain [Dawn]
• Opinion: Oil Price Hike - “This price comparison wherein Pakistan petroleum prices appear to be the lowest among the relevant countries should not mean that everything is alright and that nothing should be done to improve or control the situation. Earning power in Pakistan is the lowest in the region as well and has gone down recently. One of the solutions appears to be to increase the salaries and wages as and when possible by 50%. This may cause inflation. But sometimes, inflation is to be fought with inflation.” - By Syed Akhtar Ali [BR]