Indus Flows, June Fertilizer Offtake, Fish Exports, Sugar Import, LPG price hike, Caretaker Govt Bill, US Interest Rate Hike.

TOPLINE

• The Indus River is experiencing increased flows due to a rise in temperature, torrential rains, and eastern river flows, resulting in a medium flood at Guddu barrage, followed by low flood at Sukkur barrage and normal flows at Kotri barrage. The situation in Balochistan remains critical as rains disrupted power to Quetta as road links were broken.
• In June 2023, Pakistan's overall nutrient offtake fell by 4.8% YoY to 460,000 tonnes. Nitrogen and potash offtake declined by 10.4% and 73% YoY respectively, while phosphate offtake increased by 25.6% YoY. The country produced 750,000 tonnes of fertilizer, mainly comprising 548,000 tonnes of urea. Additionally, 51,500 tonnes of fertilizer were imported.
• Rs 11.4 billion was the export value of fish in June 2023, up 35.51% compared to Rs 8.4 billion in June 2022.
• Rs 86 million was the import value of sugar in June 2023, up 58.30% compared to Rs 54 million in June 2022.
• LPG dealers raised the price of liquefied petroleum gas by Rs 10 per kg, reaching Rs 240 per kg in the local market.
• The controversial Elections (Amendment) Bill, 2023 was approved and grants powers to the caretaker government to make decisions and take actions regarding existing bilateral agreements, along with 53 other amendments. PM Shehbaz and PDM Chief Fazl-ur-Rehman met to discuss the caretaker setup.
• The US Federal Reserve raised its benchmark lending rate by a quarter percentage point to a range between 5.25% and 5.5%, the highest level since 2001, in response to above-target inflation.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

• Sugar Import: Rs 86 million was the import value of sugar in June 2023, up 58.30% compared to Rs 54 million in June 2022, according to PBS. [ET]
• Fish Export: Rs 11.4 billion was the export value of fish and fish preparations in June 2023, up 35.51% compared to Rs 8.4 billion in June 2022, according to PBS. [ET]
• Local Gold Prices Plummet: Gold prices fell on the local market, with a decrease of Rs 2400 to Rs 222,100 per tola and Rs 2058 to Rs 190,415 per 10 grams. Silver prices, however, remained unchanged at Rs 2750 per tola and Rs 2357.68 per 10 grams. On the world market, gold was priced at $1972 per ounce, and silver at $24.67 per ounce. [BR]
• Subsidized Atta Scheme Approved: The ECC of the Cabinet approved the expenditure of Rs 985.43 million by the Utility Stores Corporation (USC) for the prime minister's free atta scheme during last Ramazan (2022-23). The scheme was part of the Ramzan Relief Package 2023, which allowed the sale of 19 items at subsidized rates by the USC. The Finance Division released Rs 4,997.20 million for the initiative. [BR] [ARY] [ProPakistani]
• FBR Exposes Tax Fraud with False Adjustments: Massive Rs 53 billion tax fraud uncovered in the FBR as 8,000 taxpayers illicitly claim tax adjustments for cotton ginning despite not being textile manufacturers or traders. The extent of the fraud is 77% higher than the additional taxes targeted from salaried individuals. Weak internal controls and possible collusion are exposed, with adjustments granted in regions where cotton ginning is not feasible and despite unpaid sales tax. [ET]

AGRI-INPUTS, WEATHER, WATER & POWER

• Torrential Rains Cause Devastation in Balochistan: Torrential rains in Balochistan caused significant damage and loss of life, with five people, including four girls, losing their lives. Flash floods and heavy downpours led to property losses in various areas. Road links with Karachi, Punjab, and parts of Sindh remained disrupted for 48 hours, prompting authorities to explore alternative routes on Bolan and Hub Rivers. Quetta and its surroundings experienced heavy rain, resulting in power outages and disrupted internet services. [Dawn]
• Indus River Experiences Increased Flows & Flood Levels: The Indus River is experiencing increased flows due to a rise in temperature, torrential rains, and eastern river flows, resulting in a medium flood at Guddu barrage on Wednesday evening, followed by low flood at Sukkur barrage and normal flows at Kotri barrage. Sindh's water needs depend on Tarbela dam, which recorded rising inflows, reaching 335,600 cusecs on July 25. The dam released 301,300 cusecs downstream, with its storage level at 1531.41 at 6 pm on Wednesday. [Dawn]
• Nutrient Offtake & Fertilizer Production in June 2023: In June 2023, Pakistan's overall nutrient offtake fell by 4.8% YoY to 460,000 tonnes. Nitrogen and potash offtake declined by 10.4% and 73% YoY respectively, while phosphate offtake increased by 25.6% YoY. The country produced 750,000 tonnes of fertilizer, mainly comprising 548,000 tonnes of urea. Additionally, 51,500 tonnes of fertilizer were imported, including 50,000 tonnes of DAP, 1,000 tonnes of AS, and 500 tonnes of SOP. [MG]
• LPG Price Hike Sparks Concerns: LPG dealers raised the price of liquefied petroleum gas by Rs 10 per kg, reaching Rs 240 per kg in the local market, causing concerns for consumers already dealing with inflation. The current prices set by the LPG Industry Association are higher than the last notification issued by OGRA, resulting in higher costs for domestic and commercial cylinders, especially in remote areas. [PT]
• Fuel Charge Adjustment Petitions: NEPRA hinted at the possibility of allowing ex-WAPDA distribution companies to collect an additional Rs 1.81 per unit, and K-Electric (KE) to collect an extra Rs 2.31 per unit from consumers in their upcoming August bills. NEPRA conducted public hearings on the petitions filed by the DISCOs and K-Electric for a hike in the monthly FCA for June 2023, with increases of Rs 1.8846 per unit and Rs 2.336 per unit. [Dawn] [ET] [The News]
• Pak-Iran Investment Projects: A high-level Iranian delegation, led by Foreign Minister Hossein Amir-Abdollahian, will visit Pakistan next week to discuss bilateral issues, including exploring investment projects with China under a trilateral arrangement. The visit follows Pakistan's Army Chief General Syed Asim Munir's recent trip to Iran, signaling increased engagement between the two countries. They are also negotiating joint investment in fertilizer production, as agreed during an Iranian delegation led by Ali Fekri, Deputy Minister/Head of OIETAI. [BR]
• Pakistan SOEs Join Saudi Aramco in Greenfield Refinery Project: Today, five state-owned enterprises (SOEs) in Pakistan, including OGDCL, PSO, PARCO, PPL, and GHPL, will sign a memorandum of understanding (MoU) to finance their equity share in a greenfield refinery project. The project, developed jointly with Saudi Aramco, aims to establish a modern deep conversion refinery with a capacity of at least 300,000 barrels per day (bpd) in Hub, Balochistan province. The MoU will signify Pakistan's commitment to the project and will be valid for three years, with project-related costs divided proportionately among the parties as equity partners. [The News]

AGRI UPDATES & PAKISTAN POLICY

• Controversial 2023 Elections Bill: In a joint session of parliament, the controversial Elections (Amendment) Bill, 2023 was approved with a majority voice vote. The bill grants powers to the caretaker government to make decisions and take actions regarding existing bilateral agreements, along with 53 other amendments to the Elections (Amendment) Act, 2017. However, it was clarified that the interim setup would not have the authority to enter into new agreements or make decisions on bilateral and multilateral agreements. The amendments also allow the caretaker government to exercise powers concerning ongoing projects. [BR] [Dawn] [ET] [The News]
• PM & PDM Chief in Talks for Caretaker Government: PM Shehbaz and PDM chief Fazlur Rehman discussed forming a caretaker government for the upcoming general elections, expected in November. After further consultations with ruling alliance parties and the leader of the opposition in the National Assembly, they will present three names each for the caretaker prime minister position, finalizing one candidate. [Dawn]
• Bilawal Bhutto-Zardari Discusses BSGI: Foreign Minister Bilawal Bhutto-Zardari talked with his Russian counterpart Sergei Lavrov by phone on Wednesday and discussed with him the Black Sea Grain Initiative (BSGI).? A day earlier, Mr Bhutto-Zardari had a telephone conversation with US Secretary of State Antony Blinken and discussed BSGI and bilateral matters. Pakistan sees the Black Sea grain deal as vital for the world and has vowed to work for its restoration after the Russian decision to withdraw from it. [Dawn]
• Federal Cabinet Approves Personal Data Protection Bill: The "Personal Data Protection Bill, 2023" was approved by the federal cabinet, aiming to regulate the collection, processing, use, disclosure, and transfer of personal data while providing a data protection mechanism and safeguarding individuals' data privacy rights. Those found in violation of the bill's provisions may face a fine of up to $2 million or an equivalent amount in Pakistani rupees. The bill seeks to ensure responsible handling of personal data and prevent unauthorized processing or dissemination of such information. [BR] [ET]
• Govt Expects Inflation Slowdown in July 2023: The government expects the pace of inflation to slow down to 27% this month and predicts inflation for July 2023 to remain between 25% and 27%, a decrease from the previous month's recorded rate of over 29%. The finance ministry's first monthly economic outlook for the fiscal year 2023-24 also states that achieving the targeted growth of 3.5% depends on political and economic certainty. The recent reduction in the administered prices of petrol and diesel is expected to result in lower domestic prices of essential items due to reduced transportation costs. [ET]
• Govt Expects Decreased Fiscal Deficit in FY24: According to a government economic report on Wednesday, the fiscal deficit is expected to decrease in fiscal year 2024 compared to the previous year's 7.9% of the gross domestic product (GDP). This reduction is primarily attributed to a 12% decrease in non-markup spending. The report also stated that the current account deficit will be maintained within a sustainable limit, and the government aims to achieve higher growth of 3.5% in FY24 through measures such as the agriculture package, industrial support, export promotion, encouragement of the IT sector, and resource mobilization. [Dawn] [BR]
• SBP's Move Boosts Rupee, Allows Cash Imports of US Dollars: SBP permits currency dealers to import US dollars in cash form, resulting in the domestic currency partially recovering by 0.52% against the US dollar, reaching Rs 287.04 in the interbank market. The decision allows open market dealers to import 50% of US dollars in cash against surplus foreign currencies, to increase the supply of dollars. [Dawn] [ET] [PT] [The News]
• Foreign Investors' Repatriation Hits 18-Year Low in FY23: During the last fiscal year (FY23), the repatriation of profit and dividend by foreign investors decreased significantly by 80% to a 18-year low of $331 million. The State Bank of Pakistan (SBP) reported that in July-June of FY23, the repatriation amount was $1.349 billion lower than the previous fiscal year (FY22), where $1.68 billion was repatriated. The repatriated amount in FY23 is the lowest level in 18 years, with the highest level recorded at $2.32 billion in FY18. [BR] [ET]
• HBL's Strong H1 Performance: HBL announced a consolidated profit before tax (PBT) of Rs 51.5 billion for the first half of 2023, showing a remarkable 50% increase compared to H1'22. The Bank's strong performance was driven by its market-leading domestic franchise, with profits growing by 63%. Along with the results, the Bank declared an interim dividend of Rs 2.00 per share (20%), bringing the total payout for H1'23 to Rs 3.50 per share. [BR]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

• US Federal Reserve Raises Rates Amid Inflation Concerns: The US Federal Reserve raised its benchmark lending rate by a quarter percentage point to a range between 5.25% and 5.5%, the highest level since 2001, in response to above-target inflation. The central bank indicated the possibility of further rate increases in the future and stated that it will continue to evaluate economic data before making further decisions. [BR] [Dawn] [ET] [DW] [FT] [TOI] [Reuters] [Economic Times] [The Guardian]
• Greece's Intense Heatwave Fires: Greece issued evacuation orders for areas near two central cities as new fires erupted during an intense heat wave, while deadly fires also struck other parts of the Mediterranean. Thousands of people have already evacuated from the region this week, and new blazes threatened central Greece on Wednesday, with residents near Volos and Lamia being asked to leave. The fire department is facing a challenging day, battling 90 fires, with 61 of them starting in the last 24 hours. [ET] [Sky News] [Phys.org]
• TikTok to Launch Global Selling Program for Chinese Merchants: TikTok plans to launch a "full service" programme in August to help Chinese merchants sell goods globally, starting with consumers in the United States. The program will offer a range of services, including storage and shipping, to merchants in China, aiming to replicate the success of shopping platforms like Shein and Temu in the US. The platform is currently being tested in markets like Britain, with an official launch in the US expected in August. [ET] [Reuters] [Campaign Asia]
• Leading AI Companies Establish Frontier Model Forum: Anthropic, Google, Microsoft, and OpenAI, four leaders in artificial intelligence (AI), have formed the Frontier Model Forum to address potential risks posed by cutting-edge AI technology. The forum aims to minimize AI risks, establish industry standards, and share best practices with each other, lawmakers, and researchers. [Dawn] [FW] [WP] [Gulf Times]
• US Officials to Meet Taliban in Doha: US officials, including Special Representative for Afghanistan Thomas West and Special Envoy for Afghan Women, Girls, and Human Rights Rina Amiri, will be visiting Doha this week to meet with Taliban representatives and "technocratic professionals" from key Afghan ministries. [Dawn] [AN] [Al Arabiya] [Al Jazeera] [Reuters] [TRT World] [Yahoo News]
• Erdogan Backs Palestinian Reconciliation Efforts: Turkish President Recep Tayyip Erdogan held discussions with Palestinian President Mahmud Abbas and Hamas's Ismail Haniyeh ahead of a crucial meeting of Palestinian factions. Erdogan expressed support for intra-Palestinian reconciliation, emphasizing the importance of unity for peace. [Dawn] [Xinhua] [FP]
• No-Confidence Vote in India: India’s parliament on Wednesday authorized a no-confidence vote against PM Modi’s government by an alliance of opposition parties, to discuss the ethnic clashes in Manipur, a BJP-rule state in the north-east, where more than 130 people have been killed and 60,000 displaced since early May.? Approving the opposition motion, lower house speaker Om Birla said he would soon decide when the debate and vote would take place. The ethnic tensions in the small state of 3.2 million people are seen as a rare security and political failure by Modi’s government, facing a national election by May next year. [Dawn] [Al Jazeera] [Time] [BBC] [Reuters] [HT] [DS] [Mint] [TOI] [NDTV]
• Spain turns to Moorish Irrigation: Faced with that reality, Spanish farmers, volunteers and researchers have reached deep into history for solutions, turning to a sprawling network of irrigation canals built by the Moors, the Muslim population that conquered and settled in the Iberian Peninsula in the Middle Ages. High in Spain’s southern mountains, 40 or so people armed with pitchforks and spades cleared stones and piles of grass from an earthwork channel built centuries ago and still keeping the slopes green. [NYT]
• Oil Prices Fall Amid Rate Hike Expectations: Oil prices dipped on Wednesday, after US crude inventories fell less than expected ahead of an expected Federal Reserve rate hike later in the day that could cut demand. Brent crude futures were down 65 cents, or 0.8 %, at $82.99 a barrel by 1614 GMT (1214 p.m. ET), while US West Texas Intermediate (WTI) crude was at $78.92, down 68 cents, or 0.9%. Both fell by more than $1 earlier in the session, after hitting three-month highs on Tuesday. [BR] [Reuters] [Oil Price]

PAKISTAN - REMAINDERS

• 10 Karachi Fishermen Released from Indian Jails After 6 Years. [Dawn]
• FBR Freezes PIA Accounts: The FBR has frozen 53 accounts of PIA over unpaid taxes amounting to Rs 2 billion, causing a fuel crisis and impacting flight operations. PSO has refused to provide fuel, resulting in the grounding of three flights. PIA's spokesperson confirmed the crisis and assured that flight operations will not be hampered, while senior government officials are addressing the issue. [The News]
• Sindh’s First Female Opposition Leader: MQM-P's Rana Ansar has been appointed as the opposition leader in the Sindh Assembly, dealing a blow to the Pakistan Tehreek-e-Insaf (PTI). With this appointment, Ansar becomes the first woman to hold the post. This marks the third change of opposition leader. [ET] [The News]
• Opinion: Ignoring climate thresholds - “Pakistan’s climate emergency is unfolding like a horror movie where each scene is more frightening than the last. We are constantly lurching from one climate disaster to another, with no time to step back and reflect on its implications for our society and economy. In the last 12 to 18 weeks alone, climatic changes have triggered a series of disasters, with heatwaves in March and April, tropical storms in June, and urban flooding in June and July. As if this were not enough, a new wave is now at hand: transboundary floods from both India and Afghanistan affecting Punjab and KP, torrential rains in the mountain ranges of Balochistan and Sindh, and landslides and glacial outbursts hitting Gilgit-Baltistan.” - By Ali Tauqeer Sheikh [Dawn]