- Pakistan's exports to Europe dropped by 6.27% despite the duty-free access granted by its GSP+ status, notably declining in EU states. However, the European Parliament extended the GSP+ status until 2027 in October 2023.
- The Punjab Food Department plans to cease its wheat procurement practice and aims to shift the responsibility of wheat procurement to the private sector, with prices determined by international rates. Wheat procurement in KPK has started with the initiation of procuring 300,000 metric tons of wheat worth Rs 29 billion.
- Rs 15.3 billion was the export value of meat and meat preparations in March 2024, up 20.05% compared to Rs 12.7 billion. Rs 8.44 billion was the export value of art, silk and synthetic textile in March 2024, down 17.10% compared to Rs 10.19 billion. Rs 2.9 billion was the import value of soybean oil in March 2024, down 76.3%.
- Petrol prices are expected to decrease by Rs 13 per liter and diesel by Rs 8-9.50 per liter from May 16 to May 31, 2024, due to global price drops after stability in the Middle East and reduced tension in the Red Sea.
- A Pakistani military delegation's trip to Kandahar was canceled amid claims by Afghan Taliban officials of cross-border strikes by Pakistan targeting terrorists in Afghanistan. The Balochistan government will hold final negotiations in Chaman to resolve small-scale trade and the one-document regime issues for border crossing.
- The global sugar market is at risk due to supply challenges, including drought and port congestion in Brazil, a leading exporter. Brazil is currently facing a heat wave, with temperatures reaching up to 34 Celsius in central areas and no rainfall.
AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS
- Pakistan's Export Downturn: GSP+ Extension - Pakistan's exports to Europe dropped by 6.27% despite the duty-free access granted by its GSP+ status, notably declining in EU states. However, the European Parliament extended the GSP+ status until 2027 in October 2023, aiming to sustain duty-free or low-duty rates for developing countries like Pakistan. [Dawn]
- Karachi Residents Confused by Roti Price Cut: The price cut in roti varieties announced by the Karachi commissioner has caused confusion among residents, as many tandoor operators are not following the new official prices. Despite the official rates of Rs 12 for chapati (100 grams) and Rs 17 for naan (120 grams), people are still paying Rs 15-20 for chapati and Rs 25-30 for naan, as manufacturers claim they are of higher weight. [Dawn]
- Cotton Prices Fall Amid Supply Concerns: Cotton prices fell due to low business activity, with a limited supply and anticipation of a new crop in June. Though the crop in southern Sindh is satisfactory, water scarcity threatens it. The ongoing wheat crisis alarms cotton farmers, prompting calls for government support, including announcing the intervention price for cotton and activating the Trading Corporation of Pakistan (TCP). [BR]
- Wheat Purchase Target: Minister's Proposal - Federal Minister Rana Tanveer Hussain proposed increasing the wheat purchase target to ensure fair prices for growers, urging PASSCO to adopt a transparent procurement strategy. PASSCO has received 88,000 applications, verified 1,500, and started the procurement process. [ET]
- Punjab to Cease Wheat Procurement, Go Private: The Punjab food department plans to cease its wheat procurement practice, according to sources. A new policy is being formulated, shifting the responsibility of wheat procurement to the private sector, with prices determined by international rates. All four provinces will establish a unified wheat crop price, sources added. [BR]
- Smooth Progress in KP Wheat Procurement: Despite economic challenges, wheat procurement in Khyber-Pakhtunkhwa is progressing smoothly, with Minister for Food Zahir Shah Toru announcing the initiation of procuring 300,000 metric tons of wheat worth Rs 29 billion. The procurement operation began on May 7 and is scheduled to last for two months. [ET]
- Pakistan's Rice Export Ambitions Hindered: Pakistan aims to increase rice exports to address its current account deficit but faces a challenge due to the dwindling water resources needed for the water-intensive rice crop. Rice area has expanded by 40% from FY12 to FY24, reaching 3.62 million hectares, while production surged by 46% to 9 million tonnes during the same period. [Dawn]
- Soybean Import: Rs 2.9 billion was the import value of soybean oil in March 2024, down 76.3% compared to March 2023. [ET]
- Fruit Export: Rs 5.36 billion was the export value of fruits in March 2024, up 91.63% compared to Rs 2.79 billion in March 2023. [ET]
- Meat Export: Rs 15.3 billion was the export value of meat and meat preparations in March 2024, up 20.05% compared to Rs 12.7 billion in March 2023. [ET]
- Textile Products Export: Rs 8.44 billion was the export value of art, silk and synthetic textile in March 2024, down 17.10% compared to Rs 10.19 billion in March 2023. [ET]
- Opinion: Fruit Procurement in Danger - “Already reeling under the impact of an ongoing wheat crisis, the farming community is set to suffer another blow in the form of reduced fruit purchases by juice and nectar extracting companies, apparently because of the imposition of higher taxes on the industry. High and unfair taxation of 20pc FED on top of an 18pc GST has diminished fruit procurement by 50pc in a year” - By Amjad Mahmood [Dawn]
ENERGY - WEATHER, WATER & POWER
- Petrol & Diesel: May Price Drop - Petrol prices are expected to decrease by Rs 13 per liter and diesel by Rs 8-9.50 per liter from May 16 to May 31, 2024, due to global price drops after stability in the Middle East and reduced tension in the Red Sea, according to Energy Ministry officials. This follows a previous reduction of Rs 5.45 per liter in motor spirit (MS) prices from May 1, 2024. [The News]
- PSDP Allocation: Development Progress Report - The Ministry of Planning authorized Rs 507.98 billion (54%) for development projects from July to April 2023-24 out of the total Rs 940 billion PSDP allocation. Quarterly disbursements were made, with Rs 372.66 billion (57%) allocated for federal ministries, including Rs 36.27 billion in foreign aid, and Rs 254.76 billion spent against the budgeted Rs 653.2 billion for the fiscal year 2023-24. [BR]
- Solar PV Module Duty: PPIB Proposal - The PPIB proposed a 10% duty on imported solar PV modules for the next decade to boost domestic manufacturing, as per sources. These suggestions were made during the review of a draft summary for the ECC meeting regarding the "Solar Panel & Allied Equipment Manufacturing Policy 2024," according to the Managing Director of PPIB. [BR]
- IMF Agreement: Energy Tariff Hikes - The government pledged timely tariff hikes for electricity and gas to the IMF, committing to further economic reforms without new tax measures. The IMF requested biannual gas tariff increases from June 2024, annual electricity tariff reviews in 2024-25, agricultural tubewell subsidy reforms, scrutiny of power purchase agreements, and an end to electricity theft. [ET]
- Wind Project Curtailment: Grid Upgrade Needed - PPIB anticipates the Dhabeji Grid Station and NTDC's transmission line to ease curtailment for wind projects. WIPPs noted increased curtailments since 2022 due to low local demand and transmission constraints. Additionally, PPIB highlighted that the compensation formula for wind projects undervalues energy and revenue loss during curtailments. [BR]
- Proposed Duties: Used Cars & Wheat Imports - Pakistan is considering raising duties on imports of used cars (up to 1,300cc engine capacity) and wheat to discourage their importation, which has cost the country $1.4 billion in reserves and led to farmer unrest. Two budget proposals are being considered by the government to restore customs duties on wheat imports and increase duty rates on small-engine used cars. [ET]
- PIA Privatization: June 2024 Target - The federal government plans to complete bidding for Pakistan International Airlines' core business by June 2024, aiming to sell a controlling 51% stake, as per the IMF's final review report. Pakistan is also advancing its broader privatization agenda, including several smaller State-Owned Enterprises. [BR]
- Concerns Arise Over Imported Coal Procurement: Concerns arise over the long-term procurement of imported coal for power plants despite the government and IMF's emphasis on localization and import substitution. Power plants are opting for this due to ample liquidity and availability in the market, even as NEPRA’s streamlined spot imports caused coal prices to drop by nearly 50%. [Dawn]
- LHC Dismisses Anti-Dumping Duty Petition: The Lahore High Court dismissed a petition against the imposition of anti-dumping duties on galvanized coils and sheets from China for another five years. The court noted that an appeal remedy exists before a specially constituted Appellate Tribunal and issued an order against the petitioners. [BR]
PAKISTAN - ECONOMICS, POLITICS & SECURITY
- ADB Optimistic on IMF Successor Program: Yong Ye, the Asian Development Bank's Country Director for Pakistan, expressed optimism about a successor programme from the IMF during the ADB’s 57th Annual Meeting in Tbilisi. The IMF has proposed taxing civilian and military pensioners and withdrawing income tax exemptions from various pension schemes as part of recommendations for Pakistan's upcoming budget negotiations. [Dawn] [ET] [The News]
- Azad Kashmir Protests: President Zardari and PM Shehbaz vowed to address protesters' demands in Azad Kashmir, but no agreement was reached with the Jammu Kashmir Joint Awami Action Committee. Protest march resumed despite clashes with police. The situation is relatively calm, but business centers closed and public transport suspended in Muzaffarabad and Poonch divisions; partial strike in Mirpur over rising electricity tariffs and inflation. [Dawn] [ET]
- BoI Seeks Details on Local Deployment Policy: The BoI asked SBP for details on the Local Deployment Policy allowing foreign companies to deploy dividends. An inter-ministerial meeting chaired by BoI's Secretary discussed this on May 2, 2024, following a directive from the Prime Minister’s Office. BoI's Director General (Policy) highlighted SEZ issues like turnover tax, taxation on dividends, and utility provision challenges. [BR]
- Sindh CM Denies NFC Amendment Talks: Sindh Chief Minister Murad Ali Shah denied any discussions or amendments regarding the National Finance Commission (NFC) Award, stating that neither the federal government nor any officials have raised the issue with him. He mentioned hearing about an IMF suggestion to renegotiate resource distribution through media reports only. [Dawn]
- Pak Finance Minister Promotes Green Investment: Finance Minister Aurangzeb emphasized Pakistan's vulnerability to climate change and its commitment to address it while promoting green investment opportunities at the UK-Pakistan Green Investment Forum organized by the British High Commission. [BR]
- Miftah Ismail Plans New Political Party: Former finance minister Miftah Ismail confirmed his plan to form a new political party, as announced in an op-ed. The party, yet to be named, aims to have a different leadership structure, including women and young people, with constitutionally mandated term limits for leaders. [Dawn] [ET]
- Pakistani Military Trip Canceled Amid Tensions: A planned Pakistani military delegation's trip to Kandahar was reportedly canceled amid claims by Afghan Taliban officials of cross-border strikes by Pakistan targeting terrorist hideouts in Afghanistan. The Balochistan government on Sunday constituted a committee led by the speaker of the provincial assembly Abdul Khaliq Achakzai to hold final negotiations with all stakeholders including political leaders and traders in Chaman to resolve the issues related to small-scale trade and the one-document regime for border crossing between Pakistan and Afghanistan. [Dawn] [ET]
INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT
- Israeli Genocide: UN Secretary-General António Guterres and the UN human rights chief urged prompt action to prevent a large-scale Israeli offensive in Rafah, warning of catastrophic consequences for the region. Meanwhile, US Secretary of State Antony Blinken stated that the US is reviewing allegations of Israeli violations of US policy and international humanitarian law in Gaza. [Dawn] [Dawn] [Al Jazeera] [France 24]
- Afghanistan Floods: Aid Delivery Hindered - Emergency aid and rescue teams struggled to reach the hardest-hit areas of northern Afghanistan on Sunday after flash floods killed hundreds. Heavy rains triggered flooding across several provinces, with Northern Baghlan worst affected. Efforts to deliver aid were hampered by destroyed roads and bridges, leaving aid trucks, military vehicles, rescue workers, and locals stranded in Sheikh Jalal, near Burka. [BR] [Dawn] [The News] [VOA]
- Indonesia: 34 Dead in Flash Floods: At least 34 people died, and 16 are missing in western Indonesia after flash floods and cold lava flow from a highly active volcano damaged homes, roads, and mosques. Heavy rain caused flooding in Agam and Tanah Datar districts in West Sumatra province on Saturday, endangering thousands after downpours swept ash and rocks from Mount Marapi. [Dawn] [The News] [NDTV]
- Russia-Ukraine War: General Syrskii reports a deteriorating situation in northeastern Kharkiv, acknowledging Ukraine's military is facing challenges as Russian forces advance, prompting more people to flee their homes. Ongoing battles along the border with Russia are exacerbating the situation. [ET] [Al Jazeera] [The Guardian]
- US Stock Market Rebounds on Strong Earnings: US stock market rebounds strongly from first major dip of 2024, driven by solid earnings season and tech giants' reports. S&P 500 up over 9% for the year, approaching late-March record high after 5% pullback. Over 80% of S&P 500 firms reported earnings, with 7.8% growth exceeding April's 5.1% expectation, per LSEG IBES. Market's future hinges on next week's inflation data. [BR]
- Chinese Firms Secure Iraqi Oil Exploration Bids: Chinese firms won bids to explore five Iraqi oil and gas fields, aiming to boost domestic gas production. An Iraqi Kurdish company also secured two projects in the licensing round, which covered central, southern, and western Iraq and included an offshore exploration block in the Arab Gulf waters for the first time. [BR]
- Earth Experiences Powerful Solar Storms: Earth faced powerful solar storms on Saturday following extreme events triggering auroras from Tasmania to Britain. The US-based NOAA reported multiple coronal mass ejections from the Sun, with the first coming Friday. Social media buzzed with images of auroras, including reports from England. [BR]
- Global Sugar Market Faces Supply Risks: The global sugar market is at risk due to supply challenges, including drought and port congestion in Brazil, a leading exporter. Brazil is currently facing a heat wave, with temperatures reaching up to 34 Celsius in central areas and no rainfall. While some precipitation is forecasted for late May, it may not be sufficient to alleviate concerns. [BR]
- PSX forecasts a record surge of 106,000 points by June 2025. [ET]
- IMF Report: PTI Opponents Gain Ground - In its recent report on Pakistan, the IMF noted that 'independents' associated with PTI won the most votes, forming a significant opposition in the National Assembly. The report highlighted the continuity of SBA implementation under a newly-elected government that took office in March 2024 after nearly seven months of a caretaker government. [BR]
- FBR's SIM Blockage Initiative: Progress Update - Telecom operators blocked over 3,500 mobile phone SIMs of non-filers out of the 5,000 promised to the FBR as part of the ITGO to push individuals to file their 2023 returns. The FBR also warned 5,000 individuals of SIM blockage if returns were not filed and requested details of blocked SIMs from operators. [ET]
- Pakistan-China Strategic Dialogue: May Meeting - Pakistan and China will hold their annual strategic dialogue next week, covering bilateral ties and regional issues. Deputy PM and Foreign Minister Dar will visit Beijing from May 13-16 to co-chair the Fifth Pakistan-China Foreign Ministers’ Strategic Dialogue with Chinese Foreign Minister Wang Yi. [ET]
- ECC Approves TSG for PAEC Budget Shortfall: The Economic Coordination Committee (ECC) of the Cabinet approved a Rs 4.861 billion technical supplementary grant (TSG) for the Pakistan Atomic Energy Commission (PAEC) to cover employees and non-employees related expenditure. The decision came after PAEC submitted a summary stating that the allocated budget for current expenditure was insufficient, with a shortfall of Rs 7,037.205 million to meet its requirements for fiscal year 2023-24. [BR]
