Pak/India Rice Exports, Sugar Export & PSMA Crushing, PIA Bid Delay, PTI Protest Crackdown, IMF on Pak, Food Waste Index Findings.

TOPLINE

• The removal of the Minimum Export Price (MEP) allows Pakistani rice traders to export without price restrictions, enhancing their competitiveness as India resumed non-basmati white rice exports with a floor price of $490/tonne, following increased inventories and an upcoming harvest. The export duty on parboiled rice has also been reduced from 20% to 10%.
• The federal cabinet approved the export of an additional 100,000 metric tons of sugar, despite PM Sharif's earlier reluctance and Punjab's transfer of two officials involved in the sugar issue. Grower organizations in Pakistan see the PSMA's newspaper advertisement as threatening to delay the sugarcane crushing season and payments.
• The bidding process for loss-making Pakistan International Airlines Corporation Ltd (PIACL) has been postponed for a month due to bidders requesting more time. The new bidding date is set for October 31, following the original schedule of October 1.
• On Saturday, as PTI supporters gathered in Rawalpindi for a protest, Punjab police arrested over 110 individuals, including party leaders, amid clashes and teargas use. The town was effectively "under siege," with containers blocking access routes and anti-riot police stationed at over 25 points as clashes continued at the KPK-Punjab border too.
• The IMF advises Pakistan to broaden its tax base and address undertaxed sectors to enhance fairness and attract investment, projecting a 3.2% economic growth, a drop in inflation from 23.4% to 9.5%, and a decrease in unemployment from 8% to 7.5%. Pakistan received over $1 billion out of the $7 billion long-term loan under a 37-month EFF.
• In 2022, the Food Waste Index Report found that 783 million people experienced hunger while over 1 billion meals were wasted daily. The report noted 1.05 billion tonnes of food waste, equating to 132 kg/person and 20% of available food. UNEP highlighted that food waste contributes to 8-10% of global greenhouse gas emissions.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS - (06)

• Removal of MEP Boosts Rice Exports: The removal of the Minimum Export Price (MEP) allows Pakistani rice traders to export without price restrictions, enhancing their competitiveness against India in the global market. Chela Ram Kewlani, Chairman of REAP, welcomed the government's decision, stating it will significantly boost Pakistan's rice exports and competitiveness internationally. [BR] [Dawn]
• Sugarcane Industry Roundup: The federal cabinet approved the export of an additional 100,000 metric tons of sugar, despite PM Sharif's earlier reluctance and Punjab's transfer of two officials involved in the sugar issue. The decision was made on September 25 via electronic mail, while the PM was in New York. The sugar industry is in a tough spot but not in crisis, seeking an extension of short-term credit lines from the central bank due to unsold inventory. After agreeing to a record rise in sugarcane prices last October, industry members hope the new government will either allow price increases for consumers or provide export access to manage surplus production amid rising global sugar prices. Grower organizations in Pakistan see the Pakistan Sugar Mills Association's advertisement as threatening to delay the sugarcane crushing season and payments to producers. [Dawn]? [ET] [PT] [BR]
• NRP Aims to Enhance Pakistan's Infrastructure: Qurratul Ain, National Coordinator for the NRP Project, emphasized its goal of enhancing Pakistan's infrastructure and training professionals for export. She spoke at the Agro-Tourism Development Summit at the University of Agriculture Faisalabad, calling NRP a pilot project with UAF. [ET]
• PowerChina Proposes Local Coal Transition: PowerChina is interested in converting imported coal power plants to local coal and developing the Diamer-Bhasha hydropower project. Chairman Ding Yanzhang informed Prime Minister Shehbaz Sharif of this in a letter, emphasizing PowerChina's commitment to renewable energy in Pakistan, including previous investments in the Dawood 50 MW Wind Farm and support for 1,190 MW of local projects. [BR]
• Corporate Results: Rs 1.50 billion was the profit reported by Reliance Cotton Spinning Mills for the year ended June 30, 2024, up 25% compared to a profit of Rs 1.20 billion last year. [ET]
• Opinion: Water Scarcity An Irrigation Crisis - “Water has become the most crucial limiting factor for Pakistan's agricultural growth. In Pakistan, water scarcity is an increasingly important issue, resulting from a complex interplay of inadequate water storage capacity, significant conveyance losses across water channels, and poor water-use efficiency crop produced (in kilogram or in dollars) per unit of irrigation water used at farm level, primarily due to outdated irrigation practices like flood irrigation.” - By Chaudhary Mohammad Ashraff & Khalid Saeed Wattoo [Dawn]

ENERGY - WEATHER, WATER & POWER - (07)

• Cabinet Panel for Gwadar Imports: The Federal Cabinet has formed a panel to ensure 60% of public sector imports of wheat, fertilizer, and sugar are routed through Gwadar Port. This decision supports a previous directive to boost Gwadar's port operations and economic activities. [BR]
• PPL Questions Low Gas Offtake: Pakistan Petroleum Limited (PPL) has requested the Power Division to investigate low gas offtake by Genco-II, which has been significantly below the contracted 145 MMCFD. From July to September 2024, the daily average offtake from Kandhkot Gas Field was only 98.7 MMCFD. [BR]
• CCP Advocates CTBCM Model: The Competition Commission of Pakistan (CCP) recommends implementing the Competitive Trading Bilateral Contract Market (CTBCM) model to boost competition in the electricity sector. This model allows consumers to choose their suppliers and enables bulk purchases for loads of 1MW or more. [BR]
• CPPCL Offers Gwadar Power Project: Chinese company M/s CIHC Pak Power Company (Pvt) Ltd (CPPCL) is willing to develop a power project at Gwadar if the proposed 300-MW imported coal-fired project is abandoned by both the Pakistani and Chinese governments. This follows a review meeting on the project's progress held by the Minister for Planning on September 11, 2024. [BR]
• PIA Bidding Postponed Again: The bidding process for loss-making Pakistan International Airlines Corporation Ltd (PIACL) has been postponed for a month due to bidders requesting more time. The new bidding date is set for October 31, following the original schedule of October 1, although no official announcement has been made by the Privatisation Commission. [Dawn]
• Pakistan Faces Green Energy Challenges: Governor Jameel Ahmad stated that Pakistan faces challenges in transitioning to green energy due to funding shortages and macroeconomic instability. At the Asia Energy Summit, he noted IMF and ADB support for climate funding and highlighted initiatives to stabilize the economy after the 2022 floods, including revised financing for renewable energy. [BR]
• Opinion: Brick Kilns Continue Polluting Methods - “Despite the National Disaster Management Authority announcing the closure of nearly 7,986 black-smoke emitting brick kilns in Punjab in 2021 by shifting them to the zig-zag method, even today a large number of brick kilns are working in Punjab without the zigzag technology due to which several members of the Pakistan Kiln Owners Association have filed a complaint to the Lahore High Court, urging the judicial body to take notice of the matter.” - By Asif Mehmood [ET]

PAKISTAN - ECONOMICS, POLITICS & SECURITY - (09)

• PTI Protest Leads to Arrests in Punjab: As PTI supporters gathered in Rawalpindi at Liaquat Bagh for a protest, Punjab police arrested over 110 individuals, including party leaders, amid clashes and teargas use. The town was effectively "under siege," with containers blocking access routes and anti-riot police stationed at over 25 points to prevent protesters from advancing. The KPK-Punjab border was a sight of intense clashes between PTI Supporters and agencies. [Dawn]
• IMF Advises Tax Reforms for Growth: The IMF advises Pakistan to broaden its tax base and address undertaxed sectors to enhance fairness and attract investment, projecting a 3.2% economic growth, a drop in inflation from 23.4% to 9.5%, and a decrease in unemployment from 8% to 7.5%. Additionally, Pakistan received over $1 billion as the first tranche of a $7 billion long-term loan under a 37-month Extended Arrangement from the IMF to bolster its foreign exchange reserves. [BR] [BR]
• Pakistan Launches "War on Cash" Strategy: Finance Minister Muhammad Aurangzeb announced a "war on cash" strategy to access over Rs 9.3 trillion in circulation and enhance revenue. He acknowledged that the short-term hardships from recent policy measures would continue for most citizens, while larger corporations started to benefit from early macroeconomic improvements. [Dawn]
• PM to Decide on Tax Deadline Extension: Prime Minister Shehbaz Sharif will decide today on extending the deadline for filing income tax returns due to issues with the FBR system handling high data volumes. Requests for an extension have been made, as smaller returns were processed but larger ones have not been accepted recently. [BR]
• FBR Faces Rs 170 Billion Shortfall: The Federal Board of Revenue (FBR) is projected to face a revenue shortfall of Rs 170 billion in the first quarter of 2024-25 (July-September). However, a senior FBR official stated that a strategy has been finalized to meet the Rs 2,652 billion revenue collection target for this period. [BR]
• SBP Announces Treasury Bill Buyback: The State Bank of Pakistan (SBP) has announced a procedure for executing buyback transactions of treasury bills. The SBP will conduct buyback auctions on behalf of the government, with details such as security, target amount, and auction schedule published on various platforms, and all banks eligible to submit competitive and non-competitive bids. [Dawn]
• Government Plans Increased Privatization: The federal government is developing a new plan to privatize more federal bodies as part of its right-sizing policy. The Prime Minister has tasked the Ministries of Privatisation and Industries and Production with this initiative, targeting entities such as Pakistan Stone Development Company and Pakistan Automobile Corporation, along with several others for privatization. [The News]
• Pakistan to Sign National Fiscal Pact: The federal government is set to sign a "National Fiscal Pact" with provinces to address Pakistan's external financing gap by harmonizing provincial taxes and boosting revenue collection. Finance Minister Muhammad Aurangzeb confirmed that the pact will create a unified fiscal framework focused on increasing agricultural tax revenues and realigning federal expenditures. [The News]
• Government to Abolish 6 Ministries: The government will abolish six ministries to cut costs, announced Finance Minister Muhammad Aurangzeb. Key reforms include eliminating 150,000 vacancies and stricter actions against tax non-filers. The Ministry of Capital Administration will be dissolved, and two other ministries will merge, with five more ministries planned for similar actions. [ET]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT - (07)

• Israeli Genocide: Israel's attacks in Lebanon led to the death of a top Hezbollah official following the assassination of chief Hassan Nasrallah. The U.S. is increasing air support and readying troops for possible deployment. Iran has vowed retaliation, asserting that Israel cannot keep attacking nations aligned with the "Axis of Resistance." Following Nasrallah's killing, intensified Israeli airstrikes in Gaza and Lebanon resulted in 32 deaths, including 21 Lebanese and 11 Palestinians, on Sunday. In 2022, the Food Waste Index Report found that 783 million people experienced hunger while over 1 billion meals were wasted daily. The report noted 1.05 billion tonnes of food waste, equating to 132 kg/person and 20% of available food. UNEP highlighted that food waste contributes to 8-10% of global greenhouse gas emissions and significantly impacts biodiversity, using one-third of agricultural land.? [Dawn] [Dawn] [ET] [Dawn]
• WFP Launches Emergency Aid in Lebanon: The World Food Programme has begun an emergency operation to feed one million people affected by the escalating conflict in Lebanon. This follows intensified Israeli airstrikes on Hezbollah targets after the killing of its leader, Hassan Nasrallah. The operation includes distributing ready-to-eat meals and food parcels to shelters across the country. [ET] [AN]
• Austrian Election Sees FPO Victory: Austrian voters have given a historic victory to the far-right Freedom Party (FPO) in the general election, driven by concerns over immigration. The FPO, led by Herbert Kickl, is projected to receive 29.1% of the vote, surpassing Chancellor Nehammer's conservative People's Party (OVP) at 26.2%, and the Social Democrats at 20.4%. This reflects growing support for hard-right parties across Europe. [Dawn]
• India Resumes Rice Exports Amid Price Changes: India has resumed non-basmati white rice exports with a floor price of $490/tonne, following increased inventories and an upcoming harvest. The export duty on parboiled rice has also been reduced from 20% to 10%, likely lowering prices and affecting competitors like Thailand, Vietnam, Pakistan, and Myanmar. [Dawn]
• Storm Helene Complicates Rescue Efforts: Rescuers struggled to reach those affected by Storm Helene in the southeastern U.S., where flooded roads and power outages complicated efforts. The storm caused significant damage across several states, with some towns appearing devastated. Search and rescue operations are ongoing, as reported by FEMA. [Dawn] [ET]
• Nepal Floods Kill 170, Residents Face Damage: Residents of Nepal's capital returned to damaged homes after floods killed at least 170 people nationwide. The monsoon season, which runs from June to September, typically brings such disasters, but climate change is worsening their intensity. Many neighborhoods in Kathmandu were flooded, and significant damage occurred to highways connecting the city to the rest of Nepal. [ET]
• Southeast US Faces Hurricane Helene Aftermath: Southeastern US states began a major cleanup and recovery effort after Hurricane Helene caused widespread damage, leaving millions without power and resulting in catastrophic flooding from Florida to Virginia. The storm has been linked to at least 60 deaths, with damage estimates ranging from $15 billion to over $100 billion as officials continue to assess the destruction. [BR] [Dawn]

OPINION(S) & REMAINDERS

• Sindh Allocates Funds for Karachi Development: Chief Minister Murad Ali Shah emphasized the Sindh government's commitment to addressing Karachi's issues. He announced that Rs 1.5 billion has been allocated for road repairs post-rain and that Rs 200 billion is being spent on various projects in the city. Key transport projects, including the Red Line and Yellow Line BRT, are underway to improve transportation in Karachi. [ET]
• PM Launches FBR Transformation Plan: Prime Minister Shehbaz Sharif has created 5 working groups to implement a roadmap for the Federal Board of Revenue's (FBR) Transformation Plan. The FBR has also reconstituted the Single Sales Tax Return (SSTR) Committee to streamline tax filings across sectors, with the telecom sector's SSTR implemented, pending further provincial support for wider development. [BR] [BR] [Dawn]
• ECC Approves Rs 1 Billion for SCO Summit: The Economic Coordination Committee (ECC) has approved an additional Rs1 billion for hosting the Shanghai Cooperation Organisation (SCO) Summit on October 15-16, 2024. [BR]
• Opinion: Revitalizing Pakistan's Economy - “The past year has seen the welcome return of economic stability to Pakistan. Growth has resumed, inflation has declined dramatically, the exchange rate has been stable, and foreign reserves have more than doubled. Given the extreme external pressure and uncertainty facing Pakistan in mid-2023, the pace of this turnaround is remarkable, reflecting the commitment of both caretaker and new governments as well as the State Bank of Pakistan to maintaining sound macroeconomic policies.” - By Nathan Porter [Dawn]
• Opinion: Rise of Buy Now, Pay Later - “If you go to any tier-two city in Pakistan or even a lower-income neighbourhood of the metropolises, you will notice certain shops selling all kinds of items in installments, typically charging exorbitant interest rates.? Needless to say, they all operate outside the ambit of regulation, which requires businesses undertaking lending activities to have some sort of license, such as banking, microfinance, etc.” - By Mutaher Khan [Dawn]