Market Shift May End Passco, Rain Expected to Clear Smog, PIA Privatization Bid Denied, FBR Targets Rs12.9 Trillion, Petroleum Price Rise, Trump & Bid

TOPLINE

• The government is considering dissolving Passco as its wheat procurement role is set to end with the introduction of a free market.
• The Pakistan Meteorological Department (PMD) has forecasted rain starting from November 14, which is expected to alleviate the persistent smog and dense fog in the country.
• The Privatization Commission Board rejected Blue World City Consortium's Rs 10 billion bid for 60% of Pakistan International Airlines (PIA) shares on October 31, 2024.
• The FBR has assured the IMF that it will meet its revenue target of Rs 12.9 trillion for 2024-25 without any downward revisions or additional taxes.
• Petroleum product prices are expected to rise starting November 16, with petrol increasing by Rs 2.58-Rs 166.56/liter.
• President-elect Donald Trump and President Joe Biden, despite their political rivalry, met for the first time since Trump regained the White House, promising a smooth transition of power in January.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Cotton Cess Collection Drops Significantly: Cotton cess collection has dropped from Rs 631.72 billion in 2014-15 to Rs 211 million in 2023-24, impacting cotton research programs. Yousaf Zafer of PCCC attributed the decline to unpaid cess by textile mills, totaling over Rs 3.44 billion, and an unchanged cess rate since 2012. [BR]
• Cotton Prices Vary Across Pakistan's Regions: Cotton prices in Pakistan vary by region, with Sindh ranging from Rs 16,500-Rs 18,800/maund, Punjab from Rs 17,700-Rs 18,300, and Balochistan from Rs 17,500-Rs 17,700. Phutti prices range between Rs 7,400-Rs 9,200/40 kg, while Balochi cotton is priced between Rs 18,500-Rs 18,800/maund and Primark cotton between Rs 19,000-Rs 19,900/maund. [BR]
• Govt. Considers Dissolving Passco Amid Market Shift: The government is considering dissolving Passco as its wheat procurement role is set to end with the introduction of a free market. The ECC has directed the Ministry of National Food Security to present a wheat policy and proposals for Passco's closure, along with a policy on sugarcane crushing and sugar exports. [ET]
• CCL Holding to Acquire Mitchells: CCL Holding (Private) Limited, a subsidiary of CCL Pharmaceuticals, announced its intent to acquire a 50% stake and controlling interest in Mitchells Fruit Farms Ltd (MFFL), shortly after MFFL's majority shareholders expressed their intent to divest. Arif Habib Limited, acting as Manager to the Offer, informed the Pakistan Stock Exchange that CCL Holding plans to acquire voting shares and control in MFFL as per regulatory requirements. [BR]
• Pakistan Considers Passco Dissolution: The government is considering dissolving Pakistan Agricultural Storage and Services Corporation (Passco) as it moves towards establishing a free market for wheat. The Economic Coordination Committee (ECC) has directed the Ministry of National Food Security and Research to develop a wheat policy and proposals for closing Passco, while also planning a new policy on sugarcane crushing and sugar exports. [ET]
• Experts Urge Modern Tech for Farming in Sindh: Agricultural experts at a seminar in Sindh Agriculture University emphasized the need for farmers to adopt modern technology to improve farm productivity and address climate change vulnerabilities. They urged the Food and Agriculture Organisation, provincial research bodies, and farmers' organizations to support farmers in building climate resilience and advancing agricultural practices. [Dawn]
• Islamabad Faces Hoarding & Price Hikes: Residents of Islamabad are frustrated by inflated prices and poor quality of essential goods due to hoarding by local vendors. One resident highlighted the issue, pointing out that shopkeepers in areas like Bari Imam set their own prices for everyday items like milk, vegetables, fruits, and meat, causing confusion and leaving consumers at the mercy of vendor exploitation. [ET]

ENERGY - WEATHER, WATER & POWER

• PMD Forecasts Rain to Clear Smog from November 14: The Pakistan Meteorological Department (PMD) has forecasted rain starting from November 14, which is expected to alleviate the persistent smog and dense fog in the country. This rainfall, along with thunderstorms and mountain snowfall, is anticipated to last until November 16, improving air quality and offering relief to citizens by reducing pollution and clearing foggy conditions. [ET]
• PAC Highlights Delays in Balochistan Dam Projects: The Public Accounts Committee (PAC) of the Balochistan Assembly has raised concerns over delays in small dam projects, with only 11 out of 100 dams completed since work began in 2017-18. Initially slated for completion by 2020, the delays have led to increased costs and significant losses to the national exchequer. [ET]
• Petroleum Prices to Rise from November 16: Petroleum product prices are expected to rise starting November 16, with petrol increasing by Rs 2.58-Rs 166.56/liter, high-speed diesel (HSD) rising by Rs 5.91-Rs 180.20/liter, kerosene oil (KERO) increasing by Rs 5.54-Rs 157.59/liter, and light diesel oil (LDO) going up by Rs 5.90-Rs 145.58/liter. [BR] [ET]
• OGDCL Starts Gas Production at Uch-35: Oil and Gas Development Company Limited (OGDCL) has begun gas production from its Uch-35 well in Balochistan's Dera Bugti district, yielding 5 million standard cubic feet per day (mmscfd) and supplying gas to Uch Power Limited. The well, drilled to 1,345 meters targeting the Sui Main Limestone formation, underscores OGDCL's commitment to enhancing national energy security through efficient exploration and production. [BR]
• FPCCI Urges Winter Relief for SMEs: Qurat Ul Ain, Acting President of the FPCCI, has urged the government to extend its winter electricity relief package to small and medium enterprises (SMEs) without requiring the consumption of 100,000 units during the same period last year. She proposed that the Rs 26/kWh tariff should apply to all incremental units consumed beyond that threshold. [ET]
• PIA Privatization Bid Rejected by Commission: The Privatization Commission Board rejected Blue World City Consortium's Rs 10 billion bid for 60% of Pakistan International Airlines (PIA) shares on October 31, 2024. A meeting chaired by Federal Minister Abdul Aleem Khan decided to refer PIA's privatization to the Cabinet Committee, while expressing satisfaction over the progress made in the privatization process. [BR] [Dawn] [ET]
• Pakistan Shipping Policy 2024 Drafted for Financial Security: The Ministry of Maritime Affairs has drafted the Pakistan Shipping Policy 2024, which aims to provide financial security to registered ship owners, replacing the Pakistan Merchant Marine Policy 2001 and its 2019 amendment. The policy includes provisions for a bond to be furnished by ship owners within 24 hours if their ship is detained or seized within Pakistan's territorial waters, ensuring financial protection. [Dawn] [ET]
• EV Charging Tariff Delays Impact Expansion: Government delays in setting a tariff for EV charging stations are impacting consumers and companies planning to establish these facilities. NEPRA and NEECA have yet to agree on the tariff, while Attock Petroleum urged action, citing a September 2024 meeting where Oil Marketing Companies were encouraged to install EV chargers as part of their CSR on highways and in major cities. [BR]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• PTI Leaders Oppose Imran Khan's Protest Plans: Several top PTI leaders are dissatisfied with Imran Khan's announcement of a protest in Islamabad on November 24, made public by his sister and lawyer. Party leaders are planning to approach Khan in the coming days, urging him to reconsider and potentially call off the protest. [Dawn] [The News]
• Pakistan Briefs IMF on Debt & External Financing: The Finance Division briefed the IMF on Pakistan's debt, external financing, and the rollover of $12.7 billion from friendly countries, including $5 billion from Saudi Arabia, $4 billion from China, $3 billion from the UAE, and $0.7 billion from Kuwait. This IMF visit, led by Nathan Porter, came ahead of the first review of Pakistan's $7 billion Extended Fund Facility (EFF) in early 2025. The IMF raised concerns about the potential delay in executing the $1.2 billion Saudi Oil Facility (SOF), fearing it could be linked to the Reko Diq deal. [BR] [ET] [The News]
• FBR Confirms Rs 12.9 Trillion Revenue Target: The FBR has assured the IMF that it will meet its revenue target of Rs 12.9 trillion for 2024-25 without any downward revisions or additional taxes. The tax-to-GDP ratio has risen from 8.8% to 10.3%, and while agriculture income tax will be introduced next year, sales tax will not be imposed on petroleum products. [BR] [Dawn]
• SBP Sells Rs 775.82 Billion in MTBs: The SBP sold Rs 775.82 billion in Market Treasury Bills (MTBs) in an auction, falling slightly short of its Rs 800 billion target. The cut-off yields were 13.70% for 3-months, 13.50% for 6-months, and 13.20% for 12-months, higher than secondary market yields by 47 bps, 36 bps, and 17 bps, respectively. [MG]
• Pakistan's ADR Declines to 37% in June: Pakistan's Advance to Deposit Ratio (ADR) has been gradually decreasing, standing at 37% in June, down from 41% in December. This trend was highlighted in A.F. Ferguson & Co's PwC Banking Publication, "Road to Sustainability," which covers themes such as the economy, credit penetration, and digital transformation, with insights from over 25 industry leaders and surveys from more than 40 international banks. [Dawn]
• Poland-Pakistan Trade Nears $1 Billion: Poland and Pakistan are strengthening their bilateral ties, with trade nearing $1 billion. Polish Ambassador Maciej Pisarski highlighted the benefits of Pakistan's GSP+ trade preferences, which grant access to the EU market, and emphasized Poland's successful investments in Pakistan's gas sector, including projects by Orlen-Polish Oil and Gas Company and Exalo Drilling. [BR]
• Rupee Appreciates Against Dollar After Two-Day Decline: The Pakistani rupee appreciated by Rs 0.08, closing at Rs 277.85 against the US dollar in the inter-bank market on Wednesday, ending a two-day losing streak. In the open market, the rupee also gained Rs 0.03, closing at Rs 278.80. [ET]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• Israeli Genocide: Israeli strikes killed 22 Palestinians in Gaza on Wednesday as forces advanced into Beit Hanoun, forcing most residents to flee. Displaced families were trapped in shelters, with men detained for questioning while women and children were allowed to move south. The evacuations fueled claims that Israel is clearing the area for a buffer zone and possible resettlement by Jewish settlers. [BR] [Dawn] [Dawn] [ET]
• Yunus Criticizes Climate Finance Struggles at COP29: Bangladesh's interim leader, Muhammed Yunus, criticized the "humiliating" struggle for climate finance at COP29, urging that wealthy nations and major emitters should pay for the climate damage they caused. He expressed frustration that vulnerable countries, which have contributed little to global warming, are forced to negotiate for financial aid to address the impacts. [BR] [Dawn] [Dawn] [ET]
• Trump & Biden Meet for Smooth Transition: President-elect Donald Trump and President Joe Biden, despite their political rivalry, met for the first time since Trump regained the White House, promising a smooth transition of power in January. The two-hour meeting in the Oval Office ended with Biden expressing his commitment to ensuring a seamless transition for Trump and his team. [BR] [Dawn] [ET]
• Russia's Growth Slows to 3.1% in Q3: Russia's economic growth slowed to 3.1% in the third quarter, down from 4.1% in the previous quarter, as high inflation, driven by military spending, continued to impact the economy. Inflation for October was 8.5%, slightly down from the previous month, but still significantly above the government's target of 4%. [BR]
• Japan Pledges $18.5M for Flood Management: Japan has committed a $18.5 million grant to improve flood management in Pakistan's Indus Basin, including building three embankments in Haripur, KP, and installing water and rain meters at 45 sites in KP and Punjab. The project supports flood resilience and aligns with Pakistan’s "Build Back Better" initiative. [BR] [ET]
• U.S. Missile Base Inaugurated in Poland: Polish and U.S. officials inaugurated a U.S. missile base in northern Poland on Wednesday. Originally intended to defend against threats from the Middle East, the Redzikowo base, 230 km from the Russian border, is now focused on countering Russia. The base has been operational since July. Polish Defence Minister Wladyslaw Kosiniak-Kamysz called it a historic step for Poland, the U.S., and NATO's security. [BR]
• New Delhi Smog Exceeds WHO Limits: New Delhi residents faced hazardous smog on Wednesday, with air pollution levels exceeding 50 times the World Health Organization's recommended daily limit. The toxic air, trapped by cooler temperatures and slow-moving winds, has become a seasonal issue, contributing to thousands of premature deaths as pollutant levels reached over 800 micrograms per cubic meter. [Dawn] [ET]

OPINION(S) & REMAINDERS

• 16 Terrorists Killed in Balochistan, KP Operations: A key commander of a banned organization was among 16 terrorists killed and six others injured in gun battles and operations in Balochistan and Khyber Pakhtunkhwa. Security forces carried out an intelligence-based operation (IBO) in North Waziristan's Miranshah area between November 12 and 13, targeting the proscribed Tehreek-i-Taliban Pakistan (TTP), according to a statement from the ISPR. [Dawn]
• PIA to Transport 35,000 Pilgrims for Hajj: PIA has signed an agreement with the Ministry of Religious Affairs to transport 35,000 pilgrims under the Government Hajj scheme this year. Special flights will operate from Karachi, Islamabad, Lahore, Quetta, Multan, and Sukkur. CEO PIA, AVM Amir Hayat, expressed confidence in providing excellent services, building on the success of last year's Hajj operation. [BR] [Dawn] [ET]
• Pakistan Joins China on Chang'e 8 Lunar Mission: Pakistan's Space and Upper Atmosphere Research Commission (Suparco) announced its collaboration with China on the Chang'e 8 lunar exploration mission, scheduled for 2028. Suparco will contribute an indigenous 35 kg rover to explore the lunar surface, marking a significant step in Pakistan's space program and enhancing its partnership with China in space exploration. [Dawn] [ET]
• Pakistan to Launch AI Policy by 2025: The Pakistani government plans to launch its first-ever AI Policy by early 2025, aiming to enhance cybersecurity and strengthen real-time cyber threat detection to prevent data breaches. The policy, alongside the expansion of digital infrastructure, is expected to improve Pakistan’s global cybersecurity ranking from the top 40 to the top 10-15 in the coming years. [ET]
• Opinion: New Green Steel Firms Could Reap Rewards as EU Carbon Tariffs Loom - “Proponents of CBAM argued that as well as tackling carbon leakage, it would also help encourage the decarbonisation of industries abroad, but under a two-tier market, firms could game the system, building only a limited amount of green capacity merely to serve Europe.” - By David Stanway [BR]