PAR News Bulletin - Mon, 15 Aug, 2022

TOPLINE

• As a fresh spell of monsoon rains continued to lash parts of Pakistan, especially Balochistan, at least 6 more deaths were reported on Sunday. The rains have also transformed Sindh’s thirsty Thar desert and its sandy land into a lush blanket of wild grass, and the local farmers are ready to cultivate their land.
• NEPRA on Friday notified ex-WAPDA DISCOs to charge Rs 9.90 per unit under additional fuel cost adjustment (FCA) on electricity they sold in June, to collect an extra Rs 132 billion during August.
• Saudi Arabia plans to renew its $3 billion deposit in assistance to Pakistan, while also intending to provide $100 million per month for 10 months in petroleum products that would be granted as additional support. The International Monetary Fund (IMF) has convened a meeting of its executive board on August 29 to approve a bailout package for Pakistan.
• Trade and industry have suffered from the double-edged sword of food and energy prices with transport inflation peaking to a record 65% while the annual inflation rate increased to 24.9% in July 2022. : Upward trend in prices of essential food items was witnessed in the local market.
• The first ship to depart Ukraine under a deal to resume grain exports from the country 2 weeks ago was approaching the Syrian port of Tartous on Sunday.
• Rs 66 billion was the import value of iron and steel in June 2022, up 189.7% compared to Rs 22.8 billion in June 2021.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

• Prices of Essential Food Items: Upward trend in prices of essential food items, including vegetables, live chicken/meat, flour, sugar, pulses, fruits, cooking oil/ghee and others was witnessed in the local market, according to a survey conducted by Business Recorder here on Sunday. [BR]
• Cotton Spot Rate: Increasing trend in the prices of cotton in local and international markets was seen, with an increase in spot rate by Rs 1,000 per maund. Rains are damaging the crops, while about 60 lac bales of cotton will have to be imported. [BR]
• PKR Recovery: Pakistani currency maintained the winning streak for the ninth consecutive working day, as it recovered a further 1.57%, or Rs 3.39, to close at Rs 215.49 against the US dollar in the interbank market on Friday. [ET]
• Iron and Steel Import: Rs 66 billion was the import value of iron and steel in June 2022, up 189.7% compared to Rs 22.8 billion in June 2021. [ET]
• Livestock: South Punjab’s cattle have been ravaged by lumpy skin disease, torrential rains in the past two months. [ET]

AGRI-INPUTS, WEATHER, WATER & POWER

• Severe Flooding: Several villages in the Dadu district have submerged due to flooding in the Indus River on Sunday. The water level in the Indus River has surged and a flood flow is passing beneath Dadu-Moro bridge. “Over 50 villages in the riverine area have been submerged in the surging water level of the river,” according to reports. The rising water level in the River Chenab near Panjnad Headworks has posed a threat to the residents of over 20 villages of Ahmedpur East. [BR] [Dawn]
• Monsoon Havoc: As a fresh spell of monsoon rains continued to lash parts of Pakistan, especially Balochistan, at least 6 more deaths were reported on Sunday — 4 in Lasbela and 2 in Punjab’s Dera Ghazi Khan district — whereas hundreds of people remained stranded after losing their houses to the floods. The fresh spell of rain in the Sulaiman Range has caused flooding in mountain drains of Dera Ghazi Khan and Rajanpur. The rains have also transformed Sindh’s thirsty Thar desert and its sandy land into a lush blanket of wild grass, and the local farmers are ready to cultivate their land. [Dawn] [Dawn] [Dawn]
• Swabi Dam Project: The cost of the under-construction Utla Dam project in Gadoon Amazai area here has gone up from Rs 1,500 million to Rs 2,400 million because of suspension of work over technical grounds for almost a year. [Dawn]
• Chinese Power Companies: Chinese imported-coal fired power companies are reportedly still facing stumbling blocks in resolution of their key issues with the government’s different organisations, despite clear instructions of Prime Minister Shehbaz Sharif. [BR]
• Increase in Electricity Rate: NEPRA on Friday notified ex-WAPDA DISCOs to charge Rs 9.90 per unit under additional fuel cost adjustment (FCA) on electricity they sold in June, to collect an extra Rs 132 billion during August. [Dawn] [BR]
• Saudi Arabia’s SBP Deposit: Saudi Arabia plans to renew its $3 billion deposit in assistance to Pakistan, while also intending to provide $100 million per month for 10 months in petroleum products that would be granted as additional support, reported Bloomberg on Saturday. [BR]

AGRI UPDATES & PAKISTAN POLICY

• IMF Package: The International Monetary Fund (IMF) has convened a meeting of its executive board on August 29 to approve a bailout package for Pakistan, including disbursement of about $1.18bn, before the close of current month. [Dawn]
• Pakistan-Turkey Goods Agreement: Pakistan and Turkey on Friday signed a Trade in Goods Agreement (TGA) aimed at increasing bilateral trade between the two countries to US$ 5 billion in the next three years; and the prime minister invited Turkish investors to invest in hydel, wind, and solar power generation. [BR]
• Pakistan Budget Deficit: Pakistan booked a record federal budget deficit of nearly Rs5.5 trillion in the last fiscal year, breaching the annual target by a wide margin of Rs1.5 trillion due to imprudent fiscal policies of the PTI government that led to the overshooting of expenditures. [ET]
• No Subsidies on Petroleum Products: Finance Minister Miftah Ismail on Sunday said that following the condition of the International Monetary Fund (IMF), Pakistan has arranged to receive $4 billion from friendly nations; however, the government cannot afford to subsidize petroleum products. [The News]
• High Interest Rate: The country’s steel industry is facing a serious crisis due to higher interest rates and delay in opening Letters of Credit (LCs) for import of raw materials and spare parts. [BR]
• Inflation Warnings: The Pakistan Industrial & Traders Associations Front (PIAF) has warned the authorities that inflation above 6% can hurt economic growth in Pakistan and a careful policy is required to keep it in control. Trade and industry have suffered from the double-edged sword of food and energy prices with transport inflation peaking to a record 65% while the annual inflation rate increased to 24.9% in July 2022. [BR]
• Carbon Pricing: The government has given a commitment to the Asian Development Bank (ADB) to approve and commence with effect from January 1, 2022 the implementation of National Carbon Pricing Strategy under the country’s overall tax policy to raise tax-to-GDP ratio to 10pc by FY25 from 8.5% now. [Dawn]
• Pak-US Ties: As greetings on the completion of 75 years of independence poured in from different parts of the world, US Secretary of State Antony Blinken in his message on the occasion on Sunday emphasized the need for Pakistan and the United States to rebuild their robust relationship for the next 75 years and beyond. [Dawn] [ET]
• Hacking Fears Shut FBR: The Federal Board of Revenue (FBR) has shut down its websites on the eve of the 75th Independence Day of Pakistan for more than 24 hours over fears that Indian hackers might again make a hacking attempt. [ET]
• Cement Sector Fake Sales Tax: The Federal Tax Ombudsman has unearthed a huge scam worth billions of rupees involving fake sales tax supplies on a large scale. [ET]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

• Ukraine Grain to Syria: The first ship to depart Ukraine under a deal to resume grain exports from the country 2 weeks ago was approaching the Syrian port of Tartous on Sunday, 2 shipping sources said, after the vessel had been sailing with its transponder off. [BR] [BR]
• Syrian Soldiers & Israeli Air Strikes: Israeli air strikes on Syria killed three soldiers and wounded three others on Sunday, state media said, after the latest such incident in the war-torn country. [Dawn]
• US Delegation Arrives In Taiwan: A US congressional delegation arrived in Taiwan, days after China held military drills around the island in retaliation for US House Speaker Nancy Pelosi’s visit. Sunday’s unannounced trip came after Pelosi infuriated Beijing by visiting Taiwan earlier this month, sparking unprecedented air and sea drills that raised the prospect of conflict. [The Nation]

PAKISTAN - REMAINDERS

• 75 Years of Partition: As the Partition of India and Pakistan approaches its 75th anniversary, we urge our readers to look back at the tensions, moments and process that went into the creation of the two dominions. We must consider how far we have come and how far we still have to go. [Al Jazeera] [Al Jazeera] [Dawn] [BR] [ET] [Dawn] [ET] [The News]
• Opinion: Illusory Independence - “Since its inception, Pakistan has struggled with notions of identity, history and ideology. In a region of rampant heterogeneity in terms of class, caste, gender, creed, religion and ethnicity, the only strategy ruling elites – or in this case, brown sahibs – were able to generate for purposes of governance was a rigid, top-down and largely arbitrary one, meant primarily to coerce and control the ‘unruly’ masses.” - By Abbas Moosvi [ET]
• Social costs of extreme weather: Pakistan is ranked among the most vulnerable countries on the Global Climate Risk Index, which tracks the social and economic costs of weather extremes. Recent torrential rains in Karachi and Balochistan are continuing to pose a great threat. [ET]
• Agri’s 75 Years of Success and Stagnation: Despite early victories, lack of investments in research and planning has led to the disappointing over-reliance on imports while water is scarce and soil deteriorates. [Dawn]