PAR News - Tues, 24th Jan 2023

TOPLINE

• Pakistan is fast heading into economic meltdown, as the country's foreign reserves stand at $4.4 billion. The government's fear of losing popularity before the elections is preventing it from finalizing a deal with the IMF.
• Pakistan witnessed another prolonged power breakdown due to wide frequency, voltage and load variation.
• The steel sector hit a decade low with the import of scrap steel plummeting, exhibiting the low level of activity in the construction sector.
• SBP increased the key policy rate by 100 basis points to 17%, due to rising inflationary pressure on the economy. Governor SBP said that Pakistan is out of default as major external debt payments of $15 billion have been settled in the first half of FY23.
• Imran Khan has announced country-wide protests against the appointment of Syed Mohsin Raza Naqvi as interim Punjab CM. Forty-five PTI lawmakers withdrew their resignations from the NA.
• Microsoft is set to invest $10 billion in OpenAI which powers ChatGPT.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

• Fish Export: Rs 8.81 billion was the export value of fish preparations in Dec 2022, down 0.47% compared to Rs 8.85 billion in Dec 2021, according to the PBS. [ET]
• Sugar Import: Rs 73 million was the import value of sugar in Dec 2022, down 43% compared to Rs 129 million in Dec 2021. [ET]
• Cotton Market: The local cotton market on Monday remained steady and the trading volume remained satisfactory. The rate of cotton in Sindh is in between Rs 16,000 to Rs 20,000 per maund. The rate of cotton in Punjab is in between Rs 18,000 to Rs 20,000 per maund. The rate of Phutti in Sindh is between Rs 6,000 to Rs 8,500 per 40 kg. The rate of Phutti in Punjab is between Rs 7,000 to Rs 10,200 per 40 kg. [BR]
• Container Detention Charges: Spinning mills in Khyber Pakhtunkhwa are struggling to continue functioning as their consignments have got stuck at seaports due to restrictions by banks, said Afan Aziz, chairman of the Khyber Pakhtunkhwa Textile Mills Association, on Monday. [BR] [BR] [Dawn] [ET] [The News] [PKR]
• Steel Scrap Import: A sense of anxiety prevails as Pakistan’s steel sector hit a decade low with the import of scrap steel plummeting, exhibiting the low level of activity in the construction sector – an employer to a massive number of unskilled workers. [ET]

AGRI-INPUTS, WEATHER, WATER & POWER

• National Power Blackout: The country on Monday witnessed another prolonged power breakdown due to wide frequency, voltage and load variation in the North-South system that caused system instability leading to total system collapse. The reasons behind the collapse are being investigated. [BR] [Dawn] [ET] [ET] [Dunya] [Al Jazeera] [Reuters] [Samaa] [AN]
• Timber Mafia Targets Wildberry: Unidentified persons unlawfully chopped down a large number of wild berry trees along with other species in the mountainous region of Zakhakhel area in Landi Kotal as demand for firewood increased with a sharp decline in temperature during the last two weeks. [Dawn]
• Production Halted at 30% of Units: In a poor economic situation, where the country is facing a shortage of dollars, import restrictions, difficulties in opening Letters of Credit (LCs) and scarcity of raw material, the industrial wheel has become virtually paralyzed. [ET]
• Karachi’s Tanker Mafia: Political VVIPs, military personnel, law-enforcement agencies & KWSB officials are all complicit in profiteering on the city’s water woes. Some local level PPP office-bearers get tankers of water absolutely free, a convenient means of political patronage. These tanker quotas range upwards of 50,000 gallons per day. According to a hydrant contractor, a PPP leader prominent in Karachi politics, who also holds a senior KWSB post, boasts the biggest daily quota — 300,000 gallons. [Dawn]

AGRI UPDATES & PAKISTAN POLICY

• Financial Apocalypse: Pakistan is fast heading into economic meltdown, with alarm bells being sounded as the country's coffers run dry. $4.4 billion are the country’s foreign reserves currently held by the State Bank. Medicine shortages are feared as the pharma industry faces its worst crisis’. Stakeholders have warned that the government's 'indifference' is tantamount to 'distributing deaths'. Containers stuck at port have triggered supply hiccups, the situation may cause prices to further rise. An ET Surveys reveal Isloo residents unaffected by fiscal crunch while most Karachiites are going to bed on an empty stomach. Cascading bad decisions are to be blamed for economic morass. Experts say the government lacks a policy to sail the country out of rough waters. [ET] [ET] [ET] [ET] [ET]
• Interest Rate Hike: The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) Monday increased the key policy rate by 100 basis points to 17 %, highest-level since October 1997, due to rising inflationary pressure on the economy. [BR] [Dawn] [ET] [ARY] [Bloomberg]
• Debt Repayment: Governor State Bank of Pakistan (SBP) Jameel Ahmad has said that Pakistan is out of default threat as major external debt payments of $15 billion have been settled in the first half of FY23 and now the country needs to pay some $3 billion external debt, in the remaining period of this fiscal year, which will be managed successfully. $500 million are due soon with only $4.1 billion in reserve with the repayment scheduled for the next 72 hours. [BR] [ET]
• Imran Khan Announces Protest: A day after the Election Commission of Pakistan (ECP) appointed Syed Mohsin Raza Naqvi as interim Punjab Chief Minister, Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan has announced country-wide protests against the appointment from Tuesday (today). [BR] [ET] [ET]
• PTI Resignations Withdrawal: Forty-five PTI lawmakers on Monday collectively withdrew their resignations from the National Assembly on orders of party chairman and former prime minister Imran Khan. [Dawn] [ET] [DT] [BOL]
• IMF Talks: The government’s fear of losing popularity before the elections seems to be keeping Pakistan from finalizing a deal with the International Monetary Fund (IMF) that could stabilize the economy. [Dawn]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

• Oil Prices: Oil prices rose by around 1% on Monday to a seven-week high, extending last week’s gains on the back of a stronger outlook thanks to an expected economic recovery in top oil importer China this year. Brent crude was up $1.28, or 1.5%, at $88.91 a barrel at 11:06 a.m. EST (1606 GMT). The session high was $88.99 a barrel, highest since Dec. 1. US West Texas Intermediate (WTI) crude rose 76 cents, or 0.9%, to $82.40. The session high was $82.64 a barrel, highest since Dec. 5. Last week Brent rose 2.8% while the US benchmark logged a 1.8% gain. [BR] [BR]
• Iran-Europe Relations: Relations between Iran and Europe have deteriorated sharply, with the EU and Britain ramping up sanctions against the Islamic republic over its response to more than four months of protests. [Dawn] [Reuters]
• Sweden-Turkey Row: Sweden should not expect Turkey to back its Nato membership bid, Turkish president Tayyip Erdogan said on Monday, days after a copy of the Quran was burned in a Stockholm protest. Sweden applied to join Nato after Russia invaded Ukraine - but needs Turkey, already a member, to approve. [BBC]
• Microsoft OpenAI Investment: Microsoft is investing $10 billion in OpenAI that will stretch over multiple years, a source says. The company’s artificial intelligence tool ChatGPT has lit up the internet since its introduction in November. Microsoft is competing with Alphabet, Amazon and Meta in the fast-growing technology that creates human-like conversational text. [Bloomberg]

PAKISTAN - REMAINDERS

• Elite Capture is in Full Display as Dollar-Starved Pakistan Imports 2,200 Luxury Vehicles. [Dawn]
• Opinion: Arise Pakistan - “Pakistan has not run out of dollars. It has run out of ideas, imagination, consensus and common sense. Limitless options and opportunities await Pakistan to rise from its deep slumber. Numerous immediate measures could be listed to save energy and stop imports that we can live without. Import of fuel — which makes the biggest chunk of imports — can be significantly reduced by numerous fuel-saving measures. Withdraw all 150,000 government vehicles from every government official.” - Naeem Sadiq [ET]

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