- The Karachi Cotton Association's Spot Rate Committee increased the spot rate by Rs 500 per maund to Rs 19,500, signaling bullish market conditions.
- Pakistan aims to boost rice exports to $5 billion by 2028 and double that to $10 billion in the next decade.
- Pakistan is set to implement a 41% increase in gas prices by mid-February under the ongoing IMF loan program to address circular debt, raising concerns about heightened inflation.
- Bilateral trade between Pakistan and Afghanistan resumed at the Torkham border, bringing excitement and jubilation among transporters.
- Pakistan's caretaker federal cabinet has approved the deployment of the Pakistan Army and civil armed forces for the peaceful conduct of the February 8 general elections, citing heightened terrorism concerns.
- Oil prices edged higher on Tuesday due to disruptions in US production and geopolitical tensions in the Middle East and Europe, but this was tempered by increased crude supply from Libya and Norway.
COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE
- Karachi Cotton Association Raises Spot Rate Amid Bullish Market: The Karachi Cotton Association's Spot Rate Committee increased the spot rate by Rs 500 per maund to Rs 19,500, signaling bullish market conditions. The local cotton market saw heightened activity with satisfactory trading volumes. Analyst Naseem Usman reported fluctuating rates in Sindh (Rs 18,000 to Rs 20,000 per maund) and Punjab (Rs 19,000 to Rs 20,000 per maund). Phutti prices ranged between Rs 8,000 to Rs 9,000 per 40 kg, and Balochistan cotton prices were documented at Rs 18,000 to Rs 18,500 per maund. [BR]
- Protests Escalate in Gilgit-Baltistan Over Wheat Price Hike: Protests against increased wheat prices in Gilgit-Baltistan will intensify with a complete shutter-down strike in Skardu today and region-wide protests starting Friday, announced by the Awami Action Committee (AAC). The strike, closing businesses from 2 pm onwards, is impacting commercial activities, and residents face challenges buying essentials due to store closures. Daily sit-ins at Skardu's Yadgar-e-Shuhada have drawn thousands. [Dawn]
- Pakistan's Ambitious Rice Export Goals: $10 Billion by 2038 - Pakistan aims to boost rice exports to $5 billion by 2028 and double that to $10 billion in the next decade. To achieve this, the country plans to capitalize on India's rice export ban, positioning itself as a reliable supplier. Rice exports rose from $462 million in 2022 to $2.5 billion in 2023, with expectations to exceed $3 billion this year, according to Shahzad Ali Malik, Chairman of the Punjab Rice Research and Development Board. [BR]
- LTO Monitors Sindh Sugar Mills to Curb Revenue Leakages: The Large Taxpayers Office (LTO) has deployed officers at sugar mills in Sindh to monitor production and sales, aiming to curb revenue leakages. Authorized under Section 40B of the Sales Tax Act 1990, LTO officers are recording details of loaded trucks, including purchase invoices, vehicle, and driver information, using an online trackable system. [BR]
- Pakistan's MPC: January 29, 2024 Decision - The State Bank of Pakistan's Monetary Policy Committee (MPC) will convene on January 29, 2024, to assess key economic indicators and determine the policy rate, as outlined in the calendar for the first half of the year. The decision will be announced by Governor SBP, Jameel Ahmad, during a media briefing on the same day following the MPC meeting. [BR]
- Sindh Wildlife Department Begins Migratory Bird Census in Karachi: The Sindh Wildlife Department (SWD) has launched a population census of migratory birds arriving from cold regions, such as Siberia, to water bodies and sea waters in Karachi and rural Sindh. The bird census, utilizing a combination of conventional and modern instruments including spotting scopes, aims to accurately count the migratory bird population. The census will extend until mid-March. [ET]
- Sesame Export: $407 million surge in the value of sesame exports was observed during 2023. [ET]
- Corporate Result: Rs 605 million was the profit reported by Fauji Foods for the year ended Dec 31, 2023 compared to a loss of Rs 2.2 billion last year. [ET]
AGRI-INPUTS, WEATHER, WATER & POWER
- Delayed Snowfall Hits Tourism & Economy in Northern Pakistan: Pakistan's northern regions are awaiting the season's first snowfall, impacting tourist visits to destinations like Kalam and Malam Jabba valleys. Kalam Valley, normally bustling with tourists seeking snow-capped mountain views, is experiencing a decline in tourism income. The absence of snowfall is also expected to affect agriculture, fishing, and hydroelectricity in the region, resulting in a brown and barren landscape. [ET] [The News]
- Pakistan's Fiscal Shift: Declines in Petroleum Imports Persist - Pakistan's petroleum imports showed declines in the first half of the fiscal year, with a 24% drop in petroleum products, 4.96% decrease in LNG, 5.94% dip in petroleum crude, and a 2.69% fall in LPG imports. Year-on-year, petroleum group imports decreased by 2.11% in December 2023, while month-on-month, there was an 8.91% increase in petroleum imports compared to November 2023, according to PBS data. [The Nation]
- KE & Hubco CEOs Explore Thar Coal Power Projects: K-Electric (KE) and The Hub Power Company Limited (Hubco) CEOs, Moonis Abdullah Alvi and Kamran Kamal, respectively, have signed an MoU to explore electricity off-take opportunities after converting Hubco's Hub Plant to local Thar coal. Aligned with KE's strategy to incorporate indigenous power sources, the companies aim to assess the viability of Thar coal-based power generation projects, with a focus on timely conversion and integration into KE's network. [BR]
- Pakistan Plans 41% Gas Price Hike, Inflation Concerns Rise: Pakistan is set to implement a 41% increase in gas prices by mid-February under the ongoing IMF loan program to address circular debt, raising concerns about heightened inflation. Analysts emphasize the need for Pakistan to announce the hike by February 15, 2024, following IMF conditions. Circular debt in the gas sector reached Rs 2.1 trillion (2.5% of GDP) by the end of FY23, reflecting a 28% YoY increase, according to IMF data. [ET]
- Pakistan-Afghanistan Trade Resumes at Torkham Border: Bilateral trade between Pakistan and Afghanistan resumed at the Torkham border, bringing excitement and jubilation among transporters. Pakistan relaxed visa conditions for Afghan transporters until the end of March, with a preference for vehicles carrying perishable items such as oranges and potatoes from Pakistan, and onions from Afghanistan. [Dawn]
AGRI UPDATES & PAKISTAN POLICY
- Pakistan Deploys Troops for Election Security: The caretaker federal cabinet has approved the deployment of troops and civil armed forces for the February 8 general elections in Pakistan. The interior ministry proposed using the army as a quick response force to ensure peace and security at polling stations and sensitive constituencies, with the approval designating the deployed forces as a rapid response force. [Dawn]
- Cabinet Sets 4-Day Deadline for FBR Restructuring Plan: The federal cabinet has created a four-day deadline for a new inter-ministerial committee, led by Caretaker Finance Minister Shamshad Akhtar, to finalize recommendations for restructuring the Federal Board of Revenue (FBR). The goal is to minimize differences among tax groups, and instead of appointing a new minister, Shamshad Akhtar has been reappointed to chair the committee. [Dawn]
- Surging Kibor Dampens Expectations for SBP Rate Cut: The Karachi Interbank Offered Rate (Kibor) is on the rise, signaling reduced likelihood of a State Bank of Pakistan interest rate cut on January 29 due to heightened inflationary pressures. Kibor, reflecting interbank lending rates, has remained elevated this fiscal year, with its 6-month tenor reaching as high as 25% in September 2023, surpassing the SBP's policy rate of 22%. [Dawn]
- SBP Launches 'FX Matching' for Transparent Interbank Trading: The State Bank of Pakistan is launching a centralized foreign exchange trading platform called "FX Matching" on January 29, 2024, making it mandatory for Authorized Dealers to use it for interbank FX transactions. The move aims to enhance transparency, reduce volatility, and establish a fair trading system in the interbank foreign exchange market. [BR]
- Pakistan Approves Military Deployment for Election Security: Pakistan's caretaker federal cabinet has approved the deployment of the Pakistan Army and civil armed forces for the peaceful conduct of the February 8 general elections, citing heightened terrorism concerns. The decision followed an attack on an independent candidate in North Waziristan, and interim Prime Minister Anwaarul Haq Kakar led the meeting in Islamabad, endorsing the deployment based on the interior ministry's recommendation. [Dawn]
- PSX Surpasses 64,000 Amid Strong Rupee & Foreign Inflows: The Pakistan Stock Exchange (PSX) surged past 64,000, benefiting from a stronger rupee and foreign corporate inflows despite early volatility. The rally was fueled by the Ministry of Finance's rejection of a debt settlement plan, aligning with IMF commitments. Additionally, the PSX auctioned Government of Pakistan Ijara Sukuk bonds, raising Rs 87.79 billion against a Rs 100 billion target for GIS Variable Rental Rate, GIS Fixed Rental Rate, and GIS FRD. Bids totaled Rs 349.47 billion, Rs 166.948 billion, and Rs 101.736 billion for GIS FRD, GIS FRR, and GIS VRR, with a 1-year GIS FRD raising Rs 6.42 billion. [ET] [MG]
- President Alvi Urges Modern Agricultural Tech Adoption for Climate Crisis: President Dr Arif Alvi stressed adopting modern agricultural technology to address the climate crisis during the Regional Dialogue 2024. He emphasized modernizing agriculture with techniques like spray and drip irrigation, utilizing Pakistan's natural resource abundance. With around 150 million acre-feet of water available, he urged implementing the national water policy, related legislation, and a pricing mechanism for water conservation. [ET] [The News]
INTERNATIONAL – OVERVIEW & MARKET OUTLOOK
- Israel Faces Escalating Pressure as 24 Soldiers Killed in Gaza: Israel reported 24 soldiers killed in the largest single-day losses since the start of its ground war in Gaza, intensifying pressure on the government to find a resolution. The announcement coincided with a White House official's visit for talks on securing more hostage releases, while US media reported a new Israeli proposal for a deal involving a two-month pause in fighting. [Dawn]
- UN Warns Gaza Faces Famine Amid Israel-Hamas Conflict: The UN's World Food Programme has warned that the population of the Gaza Strip is at an increasing risk of famine as the Israel-Hamas conflict continues. A study conducted between November 24 and December 7 revealed that all 2.2 million people in the Palestinian territory are in a crisis level of food insecurity, indicating a deteriorating situation with a looming threat of famine. [BR]
- Doomsday Clock Stays at 90 Seconds to Midnight Amid Global Threats: The "Doomsday Clock" was maintained at 90 seconds to midnight by atomic scientists, highlighting the elevated risk of global catastrophe. Factors such as Russia's nuclear actions in Ukraine, Israel's Gaza war, and worsening climate change influenced the decision. The 90-second setting is the closest to midnight, representing the theoretical point of annihilation. [Dawn]
- Global Oil Prices Stable at $80 Amidst Geopolitical Tensions: Despite ongoing conflicts in the Red Sea and geopolitical tensions, international crude oil prices, especially Brent crude, have remained stubbornly around $80/barrel, lacking the expected increase due to geopolitical risks. Observers, including JP Morgan, are puzzled by the absence of a typical risk premium, noting that current price levels do not reflect the historical response to disruptions of smaller magnitudes in the oil market. [BR]
- Oil Prices Rise on Disruptions & Tensions, Gold Gains on Weaker Dollar: Oil prices edged higher on Tuesday due to disruptions in US production and geopolitical tensions in the Middle East and Europe, but this was tempered by increased crude supply from Libya and Norway. Brent crude futures rose 0.4% to $80.36 a barrel, while US West Texas Intermediate crude futures gained 0.6% to $75.22 a barrel. The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed up 45 ringgit, or 1.15% to 3,949 ringgit ($835.94) a metric ton, a two-month high. In the precious metals market, spot gold increased 0.3% to $2,026.95 per ounce, with a softer US dollar supporting the rise. [BR] [BR] [BR]
- NayaPay Partners with Alipay+ for International Money Transfers and E-Wallet Integration. [Dawn]
- Pakistani Official Secures Job Opportunities in Qatar: Special Assistant to the Prime Minister, Jawad Sohrab Malik, secured significant agreements during an official visit to Qatar, fostering increased job opportunities for Pakistanis in the country. The agreements with top Qatari companies are expected to have a positive impact on employment prospects for the Pakistani workforce. [BR]
- Unity Foods Limited: Shifting Focus from Yarn to Edible Oil Operations - Unity Foods Limited (PSX: UNITY) was established in 1991 in Pakistan as a private limited company, later converted into a public limited company. Originally focused on yarn manufacturing, it shifted its primary business activity to edible oil extraction, refining, and related operations. Sunridge Foods (Private) Limited, a wholly owned subsidiary of UNITY, is involved in the processing of food items. [BR]
- Opinion: How the Next Govt Can Cope with Changing World Order - “WHEN the incoming government takes office after the February 8 elections, it will be confronted with a tangle of foreign policy challenges, many of which are a legacy of intricate issues that require adept management and strategic finesse. Incoming administration’s foreign policy challenges will be underscored by need for economic stabilization, which cannot be achieved without help from key players, such as Beijing and Washington” - By Baqir Sajjad Syed [Dawn]
