- PBS is initiating a digital census of the agriculture sector, employing 7 software modules for an integrated approach in Sept-Oct 2024.
- Pakistan’s imports for soybean oil are down by 49.85% and palm oil imports are down by 34.14% in the first 7 months of FY '24.
- Industrial power tariffs in Pakistan are high at around 17 cents/kWh, more than double the regional average. This compares to 6 cents/kWh (India), 8.6 cents/kWh (Bangladesh), and 7.2 cents/kWh (Vietnam). The increase in gas prices to Rs 2,750/MMBtu will further raise captive generation costs from around 10 cents/kWh to 12.2 cents/kWh.
- The Election Commission of Pakistan (ECP) is under pressure to post key post-election documents online by Feb 22, including Forms 45, 46, and 47, critical for transparency. The PDM coalition is in talks for government formation amongst their parties. Most PTI-backed candidates have officially joined the Sunni Ittehad Council.
- FBR Chairman Tiwana said the implementation of tax reforms would be handled by the next government. The FBR will engage legal counsel to defend its position in a key case concerning 40% tax on windfall income? of banks before the Islamabad High Court.
- Indian police dispersed protesting farmers violently as they attempted to march to Delhi after rejecting an offer on MSPs. Spanish farmers, joined by counterparts from France, Poland, and Greece, brought a protest to Madrid, demanding fair competition and pricing amidst claims of unfair practices.
COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE
- Pakistani Food Exports Expected to Reach $7B: Zubair Motiwala, Chief Executive of TDAP, announced at the Gulf Food Exhibition that Pakistani food exports are expected to surpass $7 billion by the end of fiscal year 2023-24, marking a significant increase from the previous $4 billion. [BR] [Dawn]
- PBS Launches Digital Agriculture Census: The Pakistan Bureau of Statistics (PBS) is initiating a digital census of the agriculture sector, employing 7 software modules for an integrated approach. PBS is preparing for the 7th Agricultural Census nationwide in September-October 2024. [Dawn] [ET]
- Pakistan's Soybean & Palm Oil Imports Decline: During the first 7 months of the current FY, soybean and palm oil imports to Pakistan decreased significantly compared to last year, with soybean oil imports down by 49.85% and palm oil imports by 34.14%. According to the PBS, from July-January 2023-24, 91,950 metric tonnes of soybean oil valued at $99.990 million were imported, compared to 136,870 metric tonnes costing $199.386 million during the same period last year. [ET] [The Nation] [DT]
- Gold Prices Rise Stable: Gold prices continued their upward trend in the local market for the sixth consecutive day, reaching Rs 215,200/tola and Rs 184,500/10 grams, up by Rs 750 and Rs 644, respectively. Meanwhile, silver remained steady at Rs 2,570/tola and Rs 2,203.36/10 grams, with international silver priced at $23.23/ounce. [BR]
- KCA Raises Spot Rate by Rs 500: The Karachi Cotton Association's Spot Rate Committee raised the spot rate by Rs 500 per maund, closing at Rs 21,500/maund on Wednesday. Cotton rates in Sindh and Punjab ranged from Rs 20,000-23,000/maund, with Phutti prices in Punjab observed between Rs 8,500-10,000/maund. [BR]
- Fauji Expansion Through Acquisition: Fauji Foods Limited has acquired its parent company's stakes in 2 subsidiaries, including the cereals business branded as "Fauji Cereals," to broaden its product offerings and market presence. This move reinforces the company's strategy to establish itself as a key player in Pakistan's fast-moving consumer goods (FMCG) landscape. [The News]
- Pakistan's Mineral Sector Progress: Caretaker PM Kakar emphasized Pakistan's progressing mineral sector under the SIFC during a meeting with Miracle Salt Collective Inc. [ET]
AGRI-INPUTS, WEATHER, WATER & POWER
- NEPRA Approves Gas Price Adjustment: NEPRA approved a reference gas price of $5.6127/MMBTU for PEL's sale to EPQL, subject to adjustment based on Badar-II's gas price and prevailing exchange rates. With the July 4, 2023 exchange rate at Rs 286.40/USD, the equivalent HHV gas price is 1,607.48/MMBTU, leading to a reference fuel cost component of Rs 13.3626/kWh for low BTU PEL gas. [MG]
- Pakistan's High Industrial Power Tariffs: Industrial power tariffs in Pakistan are high at around 17 cents/kWh, more than double the regional average. This compares to 6 cents/kWh in India, 8.6 cents/kWh in Bangladesh, and 7.2 cents/kWh in Vietnam. The recent increase in gas prices to Rs 2,750/MMBtu will further raise captive generation costs from around 10 cents/kWh to 12.2 cents/kWh, significantly exceeding regional levels and tariffs in neighboring economies. [BR]
- Gas Price Hike Amid Circular Debt Crisis: To address growing circular debt, the government is raising gas prices, particularly for fertilizer manufacturers, to comply with IMF requirements. However, there are concerns about the execution of this decision, with disagreements within the government regarding its potential impact on market prices. [BR]
- Growers Protest High Urea Prices in Digri: Growers protested rising urea fertilizer prices outside Digri press club, demanding immediate government subsidies. Led by Saifullah Gill, they blamed the government for the situation, noting urea prices exceeding Rs 5,000 per bag and doubling per-acre production costs, impacting fair pricing for agricultural produce. [Dawn]
- KKH & Baltistan Road Closed by Landslides: The Karakoram Highway (KKH) and Baltistan Road have been closed again due to landslides caused by heavy snowfall and rain. This closure, announced on Wednesday, exacerbates the challenges for residents and tourists already affected by adverse weather conditions. [Dawn]
- RLNG Policy for Housing Societies: The outgoing caretaker regime has approved a policy to provide RLNG to new domestic consumers and private housing societies due to declining local natural gas production, which stands at 3.2 billion cubic feet per day. The decision mandates gas companies to offer RLNG connections to housing societies not connected to the natural gas network, with costs fully covered by the residents. [The News]
- Azad Pattan Hydropower Project Review: PPIB will review the stalled 770.7 MW Azad Pattan Hydropower Project by China Gezhouba Group's subsidiary in a meeting tomorrow. Delays prompt stakeholder discussions on solutions. APPL's CEO requests a fee waiver for extending the Financial Close date as per amended rules. [BR]
- Finance Ministry Holds K-Electric Funds: The Ministry of Finance has withheld Rs 70 billion in K-Electric Tariff Differential Areas (TDS) due to reconciliation issues. They've agreed on a third-quarter plan for 2023-24 totaling Rs 450 billion, covering various sectors, but fund release depends on verified claims and completion of legal formalities. [BR]
AGRI UPDATES & PAKISTAN POLICY
- PML-N/PPP Forms Coalition Government: PML-N is actively forming a coalition government in Pakistan after reaching a power-sharing agreement with PPP. They're in talks with MQM-P, JUI-F, BAP, and IPP. The Biden administration maintains a non-interference stance on Pakistan's government formation, ignoring calls to withhold recognition of the February 8 election results. [BR] [Dawn]
- PTI-Backed Independent Winners Join Sunni Ittehad Council (SIC): Most PTI-backed winning independent candidates of national and provincial assemblies have officially joined the Sunni Ittehad Council (SIC) by submitting affidavits to the Election Commission. This includes a total of 89 MNAs, 85 members of the Khyber Pakhtunkhwa Assembly, 106 members of the Punjab Assembly, and nine members of the Sindh Assembly. [Dawn]
- ECP Faces Deadline Pressure for Election Result Transparency: The Election Commission of Pakistan (ECP) is under pressure to post key post-election documents online by Feb 22, including Forms 45, 46, and 47, critical for transparency. Mandated by law, this requirement ensures timely submission of election results and public accessibility within 14 days post-polls, though meeting the deadline appears uncertain. [Dawn]
- Joint Campaign Against Election Rigging: The GDA, PTI, and Jamaat-e-Islami will launch a joint campaign against the alleged rigging in the 2024 general elections, announced GDA's Information Secretary. This decision follows a meeting discussing the political situation, cooperation on the election issue, ongoing government formation talks, and the role of the Election Commission of Pakistan. [The News]
- Bonds Surge on Pakistan Coalition Deal: Pakistan's sovereign dollar bonds surged after the PPP and PML-N reached a coalition agreement following inconclusive elections. Bonds maturing in 2031 rose by 2.7 cents to 61.7 cents, and the 2026 notes increased by 2.6 cents to 76.95 cents. Consequently, Pakistan's benchmark share index, KSE, rose by 1.78% in early trading on Wednesday. [BR] [ET]
- National Savings Schemes Rates Decrease: The CDNS has decreased rates for various National Savings Schemes for the third time in two months, reflecting declining inflation and interest rates. Effective February 21, 2024, returns on schemes like SSC, BSC, PBA, Shuhada Family Welfare Account, DSC, STSC, and RIC have been lowered by 36 to 72 bps. [PT]
- Implementation of Tax Reforms Deferred: FBR Chairman Amjed Zubair Tiwana stated that while the caretaker government approved reforms, their implementation would be handled by the next elected government. [BR]
- FBR Prepares Legal Defense for Windfall Tax Case: The FBR will engage legal counsel to defend its position in a key case concerning tax on windfall income before the Islamabad High Court. The case challenges the legality of SRO 1588(1)/2023, which imposes a 40% tax on windfall income earned by banks, citing issues of clarity and raising complex legal questions regarding constitutional provisions and statutory interpretation. [BR]
INTERNATIONAL – OVERVIEW & MARKET OUTLOOK
- Indian Farmer Protests: Indian police dispersed protesting farmers with tear gas and water cannons as they attempted to march to Delhi after rejecting a government offer on produce prices. The farmers, primarily from Punjab, demand higher prices for their crops, posing a political challenge for PM Modi ahead of elections. Fleeing tear gas, some farmers wore masks as they scattered into fields near their gathering point on a highway about 200 km north of New Delhi. [BR] [Dawn] [ET]
- European Farmers Unite: Spanish farmers, joined by counterparts from France, Poland, and Greece, brought their protest to Madrid, demanding fair competition and pricing amidst claims of unfair practices. Farmers emphasized the necessity of protesting in the capital to draw attention to their cause, expressing the need to disrupt the status quo for change. [Dawn] [ET]
- Sri Lanka Tea for Iranian Oil Debt: Cash-strapped Sri Lanka has exported $20 million worth of tea to Iran to partially settle its $251 million oil debts under a barter trade deal. The agreement in December 2021, saw delays due to Sri Lanka's economic crisis, leading to the resignation of then-president Rajapaksa in July 2022. [BR]
- Record Global Debt Reaches $313 Trillion: Global debt hit a record high of $313 trillion in 2023, with developing economies also experiencing high debt-to-GDP ratios, according to the Institute of International Finance. The surge, up over $15 trillion from the previous year, saw mature markets like the US, France, and Germany contributing significantly, while the global debt-to-GDP ratio declined slightly to nearly 330% in 2023. [BR]
- Iran Blames Israel for Pipeline Attacks: Iran accused Israel of orchestrating twin sabotage attacks on gas pipelines, which occurred on February 14 and affected supplies in at least three provinces. The explosions targeted pipelines in Safashahr, Fars, and Borujen, Chaharmahal and Bakhtiari, prompting Iranian officials to denounce the incidents as acts of "sabotage and terrorism," although there were no reported casualties. [Dawn]
- China Weather Anomaly: Weather warnings were issued across China due to plummeting temperatures, particularly in the south, with Beijing experiencing snow. An orange alert was renewed, predicting further temperature drops by Friday, leading authorities to advise precautions and measures to protect crops. [Dawn]
- Google Introduces Gemma: Open AI Models - On Wednesday, Google unveiled its new family of "open models" named Gemma, offering outside developers the opportunity to utilize them for their own AI projects, a strategy akin to recent efforts by Meta Platforms. The Alphabet subsidiary is providing individuals and businesses with free access to build AI software, sharing crucial technical data, including model weights, publicly to facilitate development. [Dawn]
- Aluminium Prices Surge Amid US-Russia Tensions: Aluminium prices hit a three-week high due to concerns over potential US sanctions against Russia following the death of Alexei Navalny. Prices on the London Metal Exchange reached $2,269 per metric ton, up 2.5% to $2,246.5 per ton at 1149 GMT. The surge is attributed to supply worries and supportive measures from China, with aluminum leading the rally. [BR]
- Essential Drug Price Hike: The caretaker government has increased prices for 146 essential drugs in line with a federal cabinet decision, exempting drugs not listed in the National Essential Medicines List from certain regulations. The decision followed a recommendation by the National Health Services Ministry, citing rising global raw material costs. [BR]
