- The All Pakistan Textile Mills Association (APTMA) has reiterated its concerns regarding high electricity and gas tariffs, warning that without prompt action, over 50% of the industry could face closure.
- Wheat growers are urged to be vigilant against rust (Kungi) attacks observed in several areas of the province, including Rawalpindi, Narowal, Layyah, Muzaffargarh, Dera Ghazi Khan, and Rajanpur. NEPRA expressed disappointment with power DISCOs, seeking a Rs 3.28/unit adjustment to recover Rs 85 billion from consumers for Q2 FY 2023-24.
- Petrol and high-speed diesel (HSD) prices are expected to increase by Rs 4-11/liter next fortnight due to higher international prices and import premiums, neutralizing minor exchange rate gains.
- Moody's warns of ongoing political uncertainty in Pakistan post-inconclusive election results, deeming it a credit negative. The report highlights concerns regarding Pakistan's ability to swiftly negotiate a new IMF program after the current one expires in April 2024. PML-N, PPP and other parties are discussing government formation.
- Russia, China, and India have reduced US dollar usage in trade to just 5%, signaling a growing trend of BRICS de-dollarization efforts. Russia's export settlements in dollars or Euros fell from over 85% in 2021 to just 34% in the past year.
COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE
- APTMA Warns Industry Closure: The All Pakistan Textile Mills Association (APTMA) has reiterated its concerns regarding high electricity and gas tariffs, warning that without prompt action, over 50% of the industry could face closure. APTMA's Executive Director, Shahid Sattar, emphasized the urgent need for the Power Minister's attention, citing that Pakistan's textile exports' international competitiveness is being severely impacted by energy prices, which are significantly higher than those of competing countries. The Value Added Textile Forum (VATF) accused the caretaker government of sabotaging the textile industry with 'engineered' economic policies that have driven up energy and input costs to historic highs, citing the impact on export-oriented industries and the looming threat of closure due to the highest manufacturing costs in Pakistan's history. [The News] [BR] [ET]
- ECC Approves Wheat Import for Flour Export: The Economic Coordination Committee (ECC) met on Tuesday and approved the import of wheat for the purpose of exporting flour. The initiative received unanimous approval from the ECC. Additionally, the committee instructed relevant ministries to develop comprehensive proposals aimed at enhancing value-added exports. [PT]
- Farmers Warned of Wheat Rust Attacks in Multiple Provinces: Wheat growers are urged to be vigilant against rust (Kungi) attacks observed in several areas of the province, including Rawalpindi, Narowal, Layyah, Muzaffargarh, Dera Ghazi Khan, and Rajanpur. The agriculture department advises farmers to conduct thorough field inspections and take necessary steps to protect their crops from the harmful fungal disease, as negligence could lead to significant losses. [PO]
- Soap Industry Urges Crackdown on Smuggling, Imports: The soap industry is urging the government to crack down on under-invoicing and smuggling of imported soap and detergent. Manufacturers cite soaring inflation, high interest rates, and tax challenges, exacerbating financial strain on the industry. They advocate discouraging imports to alleviate pressure on local markets. [ET]
- Policy Issues Drive Food Price Hikes in Pakistan - The World Bank's policy note on agriculture and food in Pakistan identifies inappropriate government policies, regulations, and limited efforts in research and technology dissemination as key factors driving price hikes in the country. The note underscores that Pakistan's food inflation and volatility exceed those of neighboring countries. [Dawn]
AGRI-INPUTS, WEATHER, WATER & POWER
- Expected Fuel Price Hike Due to Global Market Trends: Petrol and high-speed diesel (HSD) prices are expected to increase by Rs 4-11/liter next fortnight due to higher international prices and import premiums, neutralizing minor exchange rate gains. This adjustment reflects increases in global market prices and higher import premiums, with HSD rising by Rs 9-11 per liter and petrol by about Rs 4 per liter, alongside slight increases expected for kerosene and light diesel oil. [Dawn]
- NEPRA Seeks Adjustment for Consumers: NEPRA expressed disappointment with power Distribution Companies, seeking a Rs 3.28 per unit adjustment to recover Rs 85 billion from consumers for Q2 FY 2023-24. The adjustment covers capacity, transmission, and variable charges, impacting consumers of both Distribution Companies and K-Electric, with K-Electric expected to submit its own petition for adjustment. [BR] [Dawn]
- Khanpur Dam Canal Cleaning Reduces Water Supply: The annual cleaning of Khanpur Dam's Left Bank Canal has reduced daily water supply to Rawalpindi and Islamabad. Scheduled from February 12 to 21, the cleaning aims to remove obstructions and leaks from the water channel. Residents are urged to conserve water until the process is complete. [ET]
- Pakistan Stresses Indus Water Treaty Adherence at UN Debate: Pakistan reiterated the importance of strict adherence to the Indus Water Treaty during a UN Security Council debate on climate and water scarcity. Munir Akram, Pakistan's UN envoy, highlighted the potential for trans-boundary water disputes due to increasing water demand and climate change impacts, emphasizing Pakistan's commitment to the treaty and its efforts to revitalize the Indus River basin. [Dawn] [ET]
- Caretaker Government Revises Gas Tariff Hikes: The caretaker government has scaled back proposed gas tariff hikes for protected domestic consumers, who fall within the first four consumption slabs, from 40-66.7%. The exact increase is known only to the interim finance and energy ministers, with the Economic Coordination Committee (ECC) opting for a slight adjustment instead and deferring the final decision to the federal cabinet. [Dawn] [ET] [The News]
- OGDCL Boosts Local Energy Production: OGDCL has begun production from a new well in Sanghar district, Sindh, expected to reduce Pakistan's reliance on oil and gas imports. The Chak 63-2 well is producing 525 BPD of oil, 2.25 MMSCFD of gas, and 7 MTD of LPG, with gas processed at the Sinjhoro Gas Processing Plant. This development is projected to save about $30 million in import bills. [The News]
- Machike-Thallian-Taru Jabba Pipeline Agreement: PSO, a gas firm, and a military engineering group have signed a memorandum of understanding to construct the Machike-Thallian-Taru Jabba White Oil Pipeline (MTT-WOP), spanning 427 km from Karachi to Peshawar. Led by the Frontier Works Organization (FWO), the project aims to enhance oil transportation efficiency and safety, alleviate traffic congestion, and reduce environmental pollution, with support from PSO and Inter State Gas Systems Pvt. Ltd (ISGS). [The News]
AGRI UPDATES & PAKISTAN POLICY
- Moody's Warns Pakistan: Moody's Investors Service warns of ongoing political uncertainty in Pakistan post-inconclusive election results, deeming it a credit negative. The report highlights concerns regarding Pakistan's ability to swiftly negotiate a new IMF program after the current one expires in April 2024, emphasizing that government liquidity and external vulnerability risks will persist until a credible longer-term financing plan is established. [BR]
- PPP, PML-N Power-Sharing Agreement: Members of the potential ruling coalition, comprising the PPP and PML-N, held discussions on the details of their power-sharing agreement, with a focus on assigning key constitutional positions to respective parties. [Dawn] [Dawn] [Dawn]
- JUI-F Plans Nationwide Protests Over Election Results: The JUI-F rejects the election results and plans countrywide protests against alleged rigging. Maulana Fazlur Rehman invited the PML-N to join the opposition in the National Assembly and confirmed that JUI-F will not join the coalition government. [BR] [Dawn] [ET]
- Government Falls Short in Bond Sale: The federal government fell short of its target in the sale of long-term government securities on Wednesday. Despite receiving bids amounting to Rs 223 billion for 3-, 5-, and 10-year Pakistan Investment Bonds (PIBs), no bids were received for 15-, 20-, and 30-year bonds. Consequently, the government borrowed Rs 85.343 billion, including non-competitive bids, which was below the target of Rs 125 billion. [BR]
- Federal Tax Ombudsman Achieves High Implementation Rate: In 2023, the Federal Tax Ombudsman (FTO) processed 8,963 cases with a 94.07% implementation rate, up from 73.29% the previous year. Additionally, refund claims worth Rs 17.742 billion were settled, and the due amounts were promptly paid to taxpayers by the Federal Board of Revenue (FBR). [BR]
INTERNATIONAL – OVERVIEW & MARKET OUTLOOK
- Shell Forecasts 50% Surge in LNG Demand by 2040: Shell predicts that global demand for liquefied natural gas (LNG) will surge by over 50% by 2040, largely due to China's transition away from coal. According to the energy group, LNG demand is expected to reach approximately 625-685 million tonnes per year by 2040, with continued growth driven by industrial demand in China and economic development in South Asia and Southeast Asia. [BR] [Reuters] [Barrons] [WD] [OT] [Economic Times]
- BRICS Nations Reduce USD Dependence: Russia, China, and India have reduced US dollar usage in trade to just 5%, signaling a growing trend of BRICS de-dollarization efforts. The International Chamber of Commerce noted a significant increase in local currency usage in trade between Russia and these nations, with Russia's export settlements in dollars or Euros falling from over 85% in 2021 to just 34% in the past year. [Watcher Guru] [CNBC] [CE] [PD] [Yahoo]
- Modi Inaugurates Hindu Temple in UAE: Indian Prime Minister Narendra Modi inaugurated a grand Hindu temple in the United Arab Emirates during his visit. The visit highlights Modi's efforts to deepen India's relations with the Middle East, particularly with a major trading partner like the UAE as he continues to sell arms to Israel, deepning his complicity in the genocide against Palestinians. [Dawn] [ET] [BBG] [BBC] [VOA] [TOI] [HT]
- Southern US Border, A Global Asylum Route: Asylum seekers journeys reflect a trend of the southern US border becoming a global way station for asylum seekers, expanding beyond Latin American migrants. [Dawn] [Goodreads] [Jstor]
- Indonesia's Presidential Election: Former general Prabowo Subianto declared victory in Indonesia's presidential election on Wednesday, with preliminary results indicating a significant lead over his two rivals to lead Southeast Asia's largest economy. Prabowo, the fiery defense minister, has been the favorite in polls, vowing to continue the agenda of outgoing leader Joko Widodo, despite allegations of inappropriate backing from Widodo and having Widodo's son as his running mate. [Dawn] [CNN] [AP] [The Guardian] [BBC]
- Government to Sell FWBL Shares: The government is planning to sell its shares in the First Women Bank Limited (FWBL) to the United Arab Emirates (UAE) either through the Privatisation Commission or the Inter-Governmental Commercial Transactions Act, 2022. FWBL was placed on the Active Privatisation Programme in 2018. [BR]
- Opinion: Climate-Proofing Mandates - “All politics is local. The nature of the local polity sets the direction of national policies. In fact, the poor quality of local governance has determined the quality of electoral processes and the misplaced national development discourse.? Candidates are elected or re-elected based on their ability to deliver on local issues. How would the PTI, PML-N, PPP, and MQM, the four political parties that have bagged the most seats at both the national and provincial levels, change the ugly realities on the ground?” - By Ali Tauqeer Sheikh [Dawn]
