Pak Exports, Govt Funds Raising, Bank Lending Rises, Sindh on Gas Deal, Gold Prices Rise, US Tariffs.

TOPLINE

• During the first four months of FY 2024-25, the United States remained Pakistan's top export destination, with a 9.4% increase in exports to $2.04 billion. China, the UK, the UAE, Germany, and other countries saw mixed changes, with exports to China declining by 14.6%.
• The government struggled financially in July-October 2024-25, failing to secure any of the $9 billion budgeted time deposits, including $5 billion from Saudi Arabia and $4 billion from China, unlike $3 billion received in the same period last year. It also raised Rs 616 billion in a T-bill auction, falling short of the Rs 800 billion target.
• Bank lending to the private sector surged by a record Rs 931 billion in October, driven by efforts to improve the advance-to-deposit ratio and reduced interest rates, boosting consumer and business borrowing. Private sector credit reached Rs 9.53 trillion, marking a 10.9% month-on-month and 15.2% year-on-year increase.
• Sindh strongly opposed a framework allowing 35% local gas to be sold to private parties, arguing it would burden residential consumers with an additional Rs 243 billion over five years due to reliance on imported gas. The Petroleum Division presented the framework without prior notice.
• Gold prices in Pakistan rose by Rs 1,600/tola, reaching Rs 275,900, following a global rebound where prices increased by 0.8% to $2,653.20 per ounce. This uptick was driven by a weaker dollar and speculation of a US Federal Reserve rate cut.
• Mexican Economy Minister Marcelo Ebrard warned that a 25% tariff proposed by US President-elect Donald Trump would lead to 400,000 job losses in the US, slow growth, and hurt US companies and consumers. China's state media cautioned Trump that his proposed tariffs on Chinese goods related to fentanyl trafficking could trigger a harmful trade war.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Daily Rates: Find the following rates on the hyperlinked titles: [Shipping Intelligence], [Pakistan Stock Exchange], [Kibor International Kibor Rates], [BRIndex100 & BR Sectoral Indices], [Activities of Karachi Port Trust, Port Qasim]
• Cotton Prices Vary Across Pakistan: Cotton prices in Pakistan vary across regions: Sindh sees rates between Rs 16,000-Rs 17,500/maund, Punjab between Rs 16,700-Rs 17,600, and Balochistan between Rs 16,500-Rs 19,000. Phutti prices range from Rs 6,500-Rs 8,200/40 kg in Sindh, Rs 7,000-Rs 8,300 in Punjab, and Rs 7,400-Rs 9,400 in Balochistan, with Balochi Cotton priced at Rs 18,500-Rs 18,800/maund and Primark cotton at Rs 19,000-Rs 19,900/maund. [BR]
• Potato Exports to Decline Amid Production Drop: Potato exports are expected to decline in the current fiscal year due to a 20% drop in per acre production in Punjab caused by smog, leading to a 40% decrease in exports from $212 million in 2022-23 to $127 million in 2023-24. The country's total potato production stands at 8.3 million tonnes, with major production areas in Sahiwal and Okara districts. [Dawn]
• Commerce Ministry's Export Plans: The Commerce Ministry has directed provincial governments to develop export development plans and form focal committees led by senior ministers, with federal ministries offering support. During the NEDB meeting, the ministry reviewed inter-ministerial decisions addressing business concerns and provided updates on unresolved issues from prior discussions. [BR]
• Trade Opportunities with Belarus Highlighted: Sheikh Umer Rehan, PVMA Chairman, welcomed Belarus President Lukashenko's visit to Pakistan, highlighting trade opportunities in Halal goods, agriculture, IT, and pharmaceuticals. Business leaders, including FPCCI President Atif Ikram Sheikh, stressed the need to strengthen trade ties between Pakistan and Belarus. [BR]
• Gold Prices Rise in Pakistan Amid Global Rebound: Gold prices in Pakistan rose by Rs 1,600/tola, reaching Rs 275,900, following a global rebound where prices increased by 0.8% to $2,653.20/ounce. This uptick was driven by a weaker dollar and speculation of a US Federal Reserve rate cut in December, with US gold futures also climbing 1.2%. [ET]
• Opinion: Agri-Food Value Chain & Role of Pulping Industry - “Pakistan has foreign exchange reserves worth multi billion dollars, but these are under the soil in the shape of fruits and vegetables. Focus on the soil is required to dig out unexplored FX reserves in the shape of improved yields and to save the leakages of these FX reserves in the shape of post-harvest losses through government intervention for the creation of well-integrated agri-food value chains and through private investment in pulp and purée production plants.” - By Aamir Ali Rizvi [BR]

ENERGY - WEATHER, WATER & POWER

• Sindh Opposes Gas Framework: Sindh strongly opposed a framework allowing 35% local gas to be sold to private parties, arguing it would burden residential consumers with an additional Rs 243 billion over five years due to reliance on imported gas. The framework, presented by the Petroleum Division without prior notice, was discussed in an ECNEC meeting chaired by Deputy Prime Minister Ishaq Dar. [ET]
• Fertilizer, Sugar, & Ethanol Plants Cause Environmental Harm: Two fertilizer plants, five sugar mills, and two ethanol factories in Rahim Yar Khan are discharging wastewater into open areas and water channels, causing environmental damage, health risks, and crop destruction. PPP MPA Mumtaz Chang raised the issue in the Punjab Assembly, highlighting contamination of subsoil and irrigation water by these industries. [Dawn]
• PHMA Urges Gas Supply for Textile Industry: The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) has urged the government to cancel gas disconnection notices from SNGPL and ensure a stable gas supply to the textile industry. They highlighted that recent export growth could be hindered without uninterrupted gas supply. [ET]
• PPL Boosts Hydrocarbon Output: Pakistan Petroleum Limited (PPL) has boosted hydrocarbon production nationwide, achieving increases of 17 MMscfd in natural gas, 400 bpd in oil/condensate, and 4 tonnes per day of LPG from April to November 2024. This growth, driven by cost-efficient measures like rigless interventions and system optimizations, strengthens Pakistan’s energy security while conserving foreign exchange. [The News]
• US Leads Pakistan's Exports, China Sees Decline: During the first four months of FY 2024-25, the United States remained Pakistan's top export destination, with a 9.4% increase in exports to $2.04 billion. China, the UK, the UAE, Germany, and other countries saw mixed changes, with exports to China declining by 14.6%, while exports to the UK, UAE, Germany, and Holland showed growth. [ET]
• Experts Urge Improved Port Safety After Fire: Experts have called for improved security and safety at ports, citing a recent fire at Pakistan International Bulk Terminal due to combustible cargo. They urged authorities to address issues related to maritime safety, law enforcement, and national defense to prevent losses, including foreign exchange spent on demurrage. [ET]
• Opinion: Tourism Suffers in the Grip of Smog - “The Punjab government had recently closed entertainment centres and parks due to the worsening smog situation in various districts of Punjab, including Lahore, from November 16 to 24. As a result, the organizers and contractors of various recreational and commercial services had to bear huge financial losses. According to the Walled City of Lahore Authority, more than 100,000 local and foreign tourists come every month to see the Shahi Fort and the Badshahi Mosque. Likewise, the number of monthly visitors at the Lahore Zoo is between 150,000 to 200,000 while more than 25,000 domestic and foreign tourists visit the Lahore Museum every month. As the government imposes restrictions on commercial activity, both local and foreign tourists steer clear from visit” - By Asif Mehmood [ET]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• PM Sharif Pledges Zero Tolerance for Future Sit-Ins: Prime Minister Shehbaz Sharif pledged zero tolerance for future sit-ins and marches in Islamabad following a disruptive PTI march, emphasizing the government's commitment to ensuring stability. Despite a crackdown that forced PTI leaders, including Ali Amin Gandapur and Bushra Bibi, to retreat, Gandapur vowed to continue the sit-in at D-Chowk until Imran Khan called it off, while the debate over alleged deaths caused by security personnel's actions remained a point of contention. [Dawn] [Dawn] [Dawn] [ET]
• Government Faces Financial Struggles: The government struggled financially in July-October 2024-25, failing to secure any of the $9 billion budgeted time deposits, including $5 billion from Saudi Arabia and $4 billion from China, unlike $3 billion received in the same period last year. It also raised Rs 616 billion in a T-bill auction, falling short of the Rs 800 billion target, as yields dropped to their lowest since March 2022. [BR] [Dawn] [The News]
• Finance Ministry Forecasts Recovery: The Ministry of Finance projects a cautiously optimistic economic recovery, supported by sustained policy measures and external stability. Inflation is expected to ease further, with projections ranging from 5.8% to 6.8% in November, and 5.6% to 6.5% by December 2024, while the agriculture and industrial sectors benefit from targeted policies, with signs of recovery in large-scale manufacturing. [The News]
• Record Surge in Bank Lending: Bank lending to the private sector surged by a record Rs 931 billion in October, driven by efforts to improve the advance-to-deposit ratio and reduced interest rates, boosting consumer and business borrowing. Private sector credit reached Rs 9.53 trillion, marking a 10.9% month-on-month and 15.2% year-on-year increase, with notable growth in business loans, auto financing, and overall lending. [The News]
• Labour Department Enforces Minimum Wage Law: The Labour Department has intensified efforts to enforce the mandatory minimum wage of Rs 37,000 after receiving numerous complaints about underpaid workers. While 50% of private enterprises have complied, many still violate the law, resulting in fines and penalties for employers who fail to meet the legal wage requirement. [ET]
• PSX Soars 4,700 Points Amid Political Easing: The Pakistan Stock Exchange (PSX) surged nearly 4,700 points on Wednesday, the largest single-day gain in its history, recovering from a 3,500-point drop the day before due to political unrest. The rally, driven by eased political tensions and strong performances in banking, automobile, oil, and power sectors, pushed the KSE-100 index above 99,200 points. [ET]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• Israeli Genocide: A ceasefire between Israel and Hezbollah, brokered by the US and France, held on Wednesday after the deadliest confrontation in years. However, Israel warned residents not to return to the border area yet, as it remains engaged in conflict with Hamas in Gaza. Thousands of displaced Lebanese fled south, while some, like Zahi Hijazi, returned to inspect their damaged homes, which had been destroyed twice by Israeli strikes, first in 1982 and again in the current conflict. [BR] [Dawn] [ET]
• Mexican Minister Warns on US Tariff Impact: Mexican Economy Minister Marcelo Ebrard warned that a 25% tariff proposed by US President-elect Donald Trump would lead to 400,000 job losses in the US, slow growth, and hurt US companies and consumers. Ebrard criticized the plan, saying it would harm Mexican exports, especially in the automotive sector, and raise vehicle prices by thousands of dollars. He called for regional cooperation instead of retaliatory import taxes. [BR]
• China Warns Trump on Fentanyl Tariffs: China's state media cautioned US President-elect Trump that his proposed tariffs on Chinese goods related to fentanyl trafficking could trigger a harmful trade war. Trump has vowed to impose additional tariffs until China curbs the flow of fentanyl precursors. This follows the disruptions caused by his earlier trade policies, which hurt global economies by inflating costs and disrupting supply chains. [ET]
• US Inflation Edges Up in October: US inflation slightly increased in October, with the PCE price index rising to 2.3% year-on-year, up from 2.1% in September. This aligns with economist forecasts and remains near the Federal Reserve’s 2% target, indicating that the Fed’s inflation control efforts are on track. Despite the increase, inflationary pressures are being monitored as the Fed continues to manage interest rates to influence demand and borrowing costs. [BR]
• Plastic Pollution Treaty Talks Face Delays: The fifth round of talks aimed at securing a treaty to curb plastic pollution is progressing slowly, raising doubts about meeting the Dec 1 deadline. Despite three days of discussions at the UN Intergovernmental Negotiating Committee (INC-5) meeting in South Korea, there is no agreed text yet, and negotiations on financing for developing countries remain unfinished. [Dawn]
• Adani Group Loses $55 Billion Amid Fraud Allegations: India's Adani Group has lost nearly $55 billion in market value following fraud allegations against its founder Gautam Adani and his associates. A November 20 indictment from US prosecutors accused them of misleading international investors and engaging in a bribery scheme involving Indian government officials. [BR] [Dawn]
• Wheat Prices Fall, Soybeans Gain: Chicago wheat futures fell 0.6% to $5.54-3/4, pressured by large supplies from the southern hemisphere. Soybeans rose 0.5% to $9.88, and corn gained 0.1% to $4.28-1/2. Despite soybean gains, expectations of large harvests in Brazil and Australia capped further price increases. US winter wheat conditions improved for the fourth consecutive week due to favorable rainfall. [BR]
• Oil Prices Hold Steady Amid Supply Data: Oil prices held steady on Wednesday, with Brent crude rising 2 cents to $72.83/barrel and US West Texas Intermediate up 4 cents to $68.82. A surprise 3.3 million barrel increase in US gasoline stocks offset easing supply concerns from the Israel-Hezbollah ceasefire. Crude stocks fell by 1.8 million barrels, contrary to analysts' expectations for a smaller decline. [BR] [ET]

OPINION(S) & REMAINDERS

• Metrobus Resumes, Partial Closure for Maintenance: The Metrobus service in Rawalpindi and Islamabad, which had been suspended due to the PTI protest, was restored on Wednesday after five days. However, from November 28 to December 1, the Rawalpindi section from Saddar to Faizabad will be closed for track maintenance, while the Islamabad section from IJP to Pak Secretariat will remain operational. [ET]
• PAC Directs KWSC to Recover Rs 20 Billion: The Public Accounts Committee (PAC) of the Sindh Assembly has directed the Karachi Water and Sewerage Corporation (KWSC) to address the non-recovery of over Rs 20 billion in dues owed by federal government institutions. The outstanding amounts are due from entities including Pakistan Steel Mills, Port Qasim Authority, Pakistan Railways, PSO, and several other federal bodies and cantonment boards. [Dawn]
• Opinion: Carbon Potential - “The National Carbon Market Policy (NCMP) is a crucial step in our broader strategy to build climate resilience and prevent further disasters. It establishes frameworks for both voluntary and compliance-based carbon trading across the energy, agriculture, waste management, and forestry sectors. Carbon markets offer multiple developmental co-benefits. We need to improve our ability to measure and verify carbon reductions; for that, our institutions and infrastructure require strengthening. Moreover, a limited understanding of carbon markets among stakeholders continues to hinder adequate participation, while volatile carbon prices add to market uncertainties — challenges the NCMP is now expected to address.” - By Qurat ul ain Siddiqui [Dawn]