- The Karachi Cotton Association's Spot Rate Committee raised the spot rate by Rs 500 per maund, closing it at Rs 18,500 per maund in a robust market with good trading volume.
- Former Finance Minister Dr. Hafeez Pasha attributed the recent greater depreciation of the rupee against the dollar in the open market, compared to the inter-bank rate, to crackdowns on illegal currency exchange dealers and expected investments from friendly countries.
- Tensions between Pakistan and Afghanistan continued as talks to reopen a key border crossing, which has been closed since September 6, failed to make any progress.
- US Ambassador Donald Blome visited Gwadar to reaffirm the US commitment to Balochistan and explore opportunities for development and trade.
- North Korean leader Kim Jong Un arrived in Russia for a meeting with President Vladimir Putin. Concerns have been raised about the possibility of an arms deal that could support Russia's actions in Ukraine.
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 per maund, closing it at Rs 18,500 per maund in a robust market with good trading volume. In various regions, cotton prices for the new crop range from Rs 18,500 to Rs 20,000 per maund, and cottonseed (Phutti) costs between Rs 8,500 to Rs 9,000 per 40 kg. [BR]
- Supreme Court Urges LHC to Expedite Sugar Price Case: The Supreme Court has instructed the Lahore High Court (LHC) to expedite and conclude the case regarding the fixing of sugar prices within one month. The directive came during a hearing of a petition by the Federation against multiple sugar mills. The Lahore High Court had previously granted a stay on the implementation of a federal government notification regarding sugar prices, and the Punjab government has requested the high court to lift this stay. [The News]
- Rupee Depreciation Linked to Crackdowns & Foreign Investments: Former Finance Minister Dr. Hafeez Pasha attributed the recent greater depreciation of the rupee against the dollar in the open market, compared to the inter-bank rate, to crackdowns on illegal currency exchange dealers and expected investments from friendly countries. However, he cautioned that artificially strengthening the rupee could lead to higher imports, widening the trade deficit and worsening the current account deficit, potentially depleting foreign exchange reserves already under pressure. [BR] [Dawn] [ET]
AGRI-INPUTS, WEATHER, WATER & POWER
- Pakistan-Afghanistan Border Talks Stalled Amid Tensions: Tensions between Pakistan and Afghanistan continued as talks to reopen a key border crossing, which has been closed since September 6, failed to make any progress. According to an official source, there has been no headway in the talks, and both sides are not currently engaged in negotiations. The closure of the border has left hundreds of trucks and travelers stranded at the Afghanistan-Pakistan border, a week after a gunfight erupted across the frontier. [ET] [Al Jazeera] [ANI] [RFE]
- US Ambassador's Balochistan Commitment Visit: US Ambassador Donald Blome visited Gwadar to reaffirm the US commitment to Balochistan and explore opportunities for development and trade, building on the robust US-Pakistan relationship. The visit highlighted previous collaboration, including US assistance during floods and support for children's nourishment in the region. [BR] [ET]
- MoE Proposes RLNG Supply at OGRA Tariff: The Ministry of Energy (MoE) has suggested supplying Regasified Liquefied Natural Gas (RLNG) to bulk consumers, including Army messes, at the OGRA-notified tariff, with Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC) being the two public sector gas utility companies responsible for natural gas transmission and distribution in Pakistan under OGRA licenses. [BR]
- Federal Cabinet Halts Airport Outsourcing: The federal cabinet has paused the outsourcing of airports pending approval from the Finance Minister-led Steering Committee. The Aviation Division presented the benefits of private sector involvement, citing international success stories and the prevalence of public-private partnerships in major airports globally, including in India. [BR]
- PPIB Extends Mahl Hydropower Project LoI: The Private Power & Infrastructure Board (PPIB) has extended the Letter of Interest (LoI) for the 640-MW Mahl Hydropower Project until December 31, 2024, with the condition of a valid Bank Guarantee extension. The project is located on the River Jhelum and is being developed by Mahl Power Company with China Three Gorges South Asia Investment Ltd as the main sponsor. [BR]
- Nepra Questions Discos' Inflated Billing Practices: The National Electric Power Regulatory Authority (Nepra) questioned the CEOs of power Distribution Companies (Discos) about the issuance of inflated electricity bills aimed at improving their recovery rates, according to sources. Nepra, known for approving tariff increases as per government instructions, expressed concern over widespread overbilling, leading to consumer protests. [BR]
- Interim Government Cracks Down on Power Theft: The interim government's nationwide campaign against power theft, launched on September 7, 2023, has revealed over 10.7 million units of power theft within state-operated power distribution companies. In the past six days, 6,215 theft cases were detected, resulting in 2,380 FIRs filed, 369 arrests made, and a Rs 441 million fine imposed. However, authorities have only managed to recover Rs 162 million, with 90 percent of the recovery being arrears and only 10 percent being related to theft. [The News]
- Government Urges OMCs to Maintain Fuel Supplies: The government has asked the oil regulator, OGRA, to ensure that all retail outlets of oil marketing companies (OMCs) maintain sufficient petroleum product supplies to prevent shortages. This decision came after concerns were raised, including by Pakistan State Oil (PSO), that many OMCs were not importing essential fuels like high-speed diesel and petrol. The Energy Minister directed OGRA to use enforcement teams to ensure OMCs keep their retail outlets well stocked. [ET] [The News] [PT]
- OGDCL Boosts Local Energy Production with Nashpa-11 Well: OGDCL has commenced production at the Nashpa-11 well in Khyber Pakhtunkhwa, contributing to Pakistan's hydrocarbon reserves and reducing the need for imports. The well is currently producing 830 barrels per day of oil and 1.0 million standard cubic feet per day of gas, connected to the OGDCL Nashpa plant through a 1.8 km flow line, with gas injection into the SNGPL network underway as of September 11, 2023. [ET] [The News]
AGRI UPDATES & PAKISTAN POLICY
- Nawaz Sharif to Return to Lahore on October 21: Former Prime Minister and PML-N supreme leader Nawaz Sharif, who has been in self-imposed exile for four years, has set a date for his return to Pakistan. He will return to his hometown of Lahore on October 21, as confirmed by his brother Shehbaz Sharif, though the details of the airline he will use for the journey are still being finalized. [Dawn] [ET]
- Commerce Committee Addresses Business Challenges: The Senate's Commerce Committee, led by Senator Zeeshan Khanzada, met with the Karachi Chamber of Commerce and Industry (KCCI) delegation to discuss challenges faced by the business community, particularly in exports. Issues included high energy tariffs, letter of credit difficulties, high interest rates, and delayed tax refunds. The committee promised to take up these concerns with relevant authorities to find solutions. [The News]
- FBR Embraces Automation with Caution: The FBR has acknowledged the need for automation in its processes but stated that achieving a completely paperless system isn't feasible due to tax law documentation requirements. The FBR believes that comprehensive documentation files are essential for processing cases and making informed decisions, and the transition to automation should be gradual to ensure access to these files electronically. [BR]
- Government Aims to Curb Revenue Shortfalls: The government is working to achieve its annual revenue target of Rs 9.4 trillion and is focusing on addressing revenue leakages, including cracking down on smuggling, to close a Rs 1 trillion gap. The goal is to prevent any revenue shortfalls on a quarterly basis, as mandated by the IMF program, and discussions were held during a meeting chaired by the Caretaker Minister for Finance, Dr. Shamshad Akhtar. The Ministry of Finance did not release a statement after the meeting. [The News]
- Pakistan Bank Deposits Surge 18% YoY in August: Bank deposits in Pakistan surged by 18% year-on-year, reaching Rs26.1 trillion in August compared to Rs22.2 trillion the previous year. In August, deposits increased by 2% compared to July when they totaled Rs25.7 trillion. This growth is attributed to higher interest rates, which boosted the average rate of return on deposits, and an expanding money supply, driven in part by increased government borrowing from banks. [The News]
- IFC to Double Investments in Pakistan to $1.5 Billion: The International Finance Corporation (IFC) is committing approximately $1.5 billion in short- and long-term investments in Pakistan for fiscal year 2023, doubling its investments compared to the previous year. Despite economic challenges in the country, IFC aims to support job creation, enhance private sector productivity, promote gender inclusion, and address climate change impacts through its projects in Pakistan. [Dawn]
INTERNATIONAL – OVERVIEW & MARKET OUTLOOK
- WFP Faces Funding Shortage, Threatening Millions with Starvation: The World Food Programme (WFP) is cutting food rations in many operations due to a funding shortage exceeding 60% this year, the highest in its history. This could push an additional 24 million people to the brink of starvation, as WFP struggles to meet growing global food assistance needs. For every one percent reduction in food aid, over 400,000 people are at risk of falling into emergency hunger levels. [BR] [WFP]
- US Waives Sanctions for Iran-Qatar Fund Transfer: The US has waived sanctions to facilitate the transfer of $6 billion in Iranian funds from South Korea to Qatar, a necessary step for a planned US-Iran prisoner exchange. This deal involves the release of detained US citizens in Iran in exchange for the fund transfer and the release of Iranians held in the United States. Secretary of State Antony Blinken determined that this waiver was in the national security interests of the United States, according to a State Department document seen by Reuters. [BR] [Al Arabiya] [Reuters]
- Libya Flash Floods: Calamity Strikes - Catastrophic flash floods in Libya have resulted in the deaths of at least 2,300 people, with thousands more missing, as river dams broke and caused widespread devastation in an eastern coastal city. The international community has expressed deep concern, and several nations have offered to provide urgent aid and rescue teams to assist Libya in coping with this devastating crisis, which a UN official described as "a calamity of epic proportions." [BR] [Dawn] [ET] [AP] [NPR] [The Guardian] [USA] [EuroNews]
- Kim Jong Un Arrives in Russia for Talks with Putin: North Korean leader Kim Jong Un arrived in Russia for a meeting with President Vladimir Putin. Concerns have been raised about the possibility of an arms deal that could support Russia's actions in Ukraine. Kim's visit, his first foreign trip since the pandemic, began with his arrival in Russia. The exact meeting location is undisclosed, but it is expected to take place in Russia's far east later in the week. President Putin is attending the Eastern Economic Forum in Vladivostok, but it's uncertain if the meeting will occur there. [Dawn] [The Nation] [Al Jazeera] [Geo] [The Guardian] [NBC] [Bloomberg]
- Oil Prices Reach 10-Month High: Oil prices jumped about 2 percent to a near 10-month high on Tuesday on a tighter supply outlook and OPEC optimism over the resilience of energy demand in major economies. Brent futures rose $1.64, or 1.8%, to $92.28 a barrel by 11:15 a.m. EDT (1515 GMT). US West Texas Intermediate (WTI) crude rose $1.91, or 2.2%, to $89.20. [BR] [Dawn]
PAKISTAN - REMAINDERS
- Kirthar National Park Investigates Sindh Ibex Deaths - Wildlife officials in Kirthar National Park responded to concerns raised by social media activists who shared photos of three Sindh Ibex carcasses. While there were fears of a mysterious disease, local wildlife officials quickly investigated to rule out such a possibility. A team led by deputy director Wali Mohammad Birhmani took custody of the carcasses to determine the cause of death. The deceased ibex were males aged between eight to 12 years. [Dawn]
- Auto Sales Surge 49% Post Import Controls Removal: Automobile sales surged to 7,579 units in August 2023, posting a staggering 49% month-on-month (MoM) increase. However, on a year-on-year (YoY) basis, sales of vehicles decreased by 36%. [ET]
- Opinion: The TTP’s new battleground - “IT was the most audacious cross-border incursion by the TTP. Reportedly, hundreds of heavily armed militants stormed Pakistani security posts in Chitral last week. The intruders were said to have been beaten back after three days of fierce fighting but the situation in the remote district is far from normal. Tension continues to grip the region.” - By Zahid Hussain [Dawn]