- PML-N accepts defeat by the PTI in the high-stakes Punjab by-election as 15 seats go to PTI, and 4 to PML-N.
- Areas in Sindh are likely to receive thunderstorms and heavy rainfalls on Monday (today). Meanwhile, 7 people were found to have been killed in Karachi due to the rains on Sunday. The Hub dam, located 56 km from Karachi, reached capacity and finally overflowed on Sunday due to the ongoing spell of monsoon rains in Balochistan.
- Cotton prices continue to decline and trading volumes saw a decrease due to rains; a reduction in the spot rate by Rs 1,500 per maund was noted. Fluctuations in international cotton markets were also observed.
- The Pakistan Economy Watch (PEW), on Sunday, said that Pakistani exports are set to take a hit as western economies, which are the main export destinations for Pakistan, have been badly hit by the war between Russia and Ukraine.
- China faces severe criticism based on current economic needs, the shifting markets, and poorly made political decisions as economic woes deepen.
- Europe underwent a severe heatwave as temperatures reached the 40°C mark.
- Israeli warplanes raided the Gaza Strip before dawn on Saturday, in what it said was a retaliatory strike for rocket fire from the Palestinian territory controlled by the Islamist movement Hamas. Saudi Arabia opened their airspace to Israeli airplanes for the first time in its history, following President Biden’s visit to the two middle eastern countries.
COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE
- Flour Prices in KP: Flour prices are on the rise in Khyber Pakhtunkhwa (KP) as the Punjab government has stopped supplying wheat and flour to the province on Friday. Currently, a 20 kg flour bag is being sold for Rs 1,900, while it is feared that the rate will soon reach to Rs 2,200. [PT]
- Bean Varieties: The Pakistan Agricultural Research Council (PARC) has developed 6 commercial varieties of beans which will help reduce reliance on imported pulses. [The Nation]
- Cotton Outlook: Last month, world cotton prices finally began to show signs of easing. Spot prices are down by 37% from peak levels touched in April 2022, with per pound prices falling below $1 for the first time since October of last year. Cotton prices continue to decline; reduction in the spot rate by Rs 1,500 per maund has been noted. Fluctuations in international cotton markets were observed, and trading volumes saw a decrease due to rains. However, the cotton crop has been affected minimally by rains at the moment.? [BR] [BR]
- Afghanistan Coal Trade: As Pakistan’s private sector imports Afghan coal to fuel their plants, the government and people of war-hit Afghanistan are in a win-win situation to benefit from the economic activity generated through the bilateral trade. [ET]
- Tea Plantation: Minister Ahsan Iqbal, advised being stringent with tea, as being a major import item, it siphons half a billion dollars every year. [ET]
- Rice Exports: Rs 11.9 billion was the value of Basmati rice export in May 2022, seeing an increase of 112.5% compared to Rs 5.6 billion in May 2021. [ET]
AGRI-INPUTS, WEATHER, WATER & POWER
- Monsoon Spells Continue: Areas in and near Karachi, Hyderabad, Thatta, Badin, Mirpurkhas, Tharparkar, Umerkot, Sanghar, Tando Muhammad Khan, Tando Allahyar, Dadu and Jamshoro are likely to receive thunderstorms and heavy rainfalls on Monday (today), the MET office advised on Sunday. 7 people were found to have been killed in Karachi due to the rains on Sunday. [BR] [Dawn]
- Hub Dam Overflow: The Hub dam, located 56 km from Karachi, reached capacity and finally overflowed on Sunday due to the ongoing spell of monsoon rains in Balochistan. [Dawn]
- Fertilizer Troubles: Despite the heatwave and canal water shortages that continued till the first week of July, acreage of major crops is on the rise, along with high demand for urea and nitrogen compost. [Dawn]
- Oil Import: Rs 17 billion in oil was imported by the government during the first 10 months of the last fiscal year. [ET]
- Dengue Threats: As if the residents of Khyber Pakhtunkhwa (KP) did not have enough misery on their plates due to the monsoon rain-induced flooding, health experts are now sounding the alarm bells for a dengue outbreak that could add to their worries. [ET]
AGRI UPDATES & PAKISTAN POLICY
- PTI Wins the By-Election: PML-N accepts defeat by the PTI in the high stakes by-election. 15 seats go to PTI, and 4 to PML-N. Imran calls for a general election under ‘credible ECP’. Felicitating all the concerned departments for holding an impartial and transparent by-election, the Chief Minister of Punjab, Hamza Shehbaz, said the voters used their right to vote in a peaceful environment. [Dawn] [ET] [BR]
- Staff-Level Agreement with IMF: The International Monetary Fund (IMF) confirmed on Thursday that it had reached a staff-level agreement with Pakistan on the combined seventh and eighth reviews for a $6 billion loan facility, a development that paves the way for the release of the much-awaited $1.17 billion. Though Pakistan’s incumbent coalition government has averted an imminent default after it reached a staff-level agreement with the IMF, the economy is still vulnerable to external shocks with growing debts. There seems to be no immediate danger of collapse, as oil and commodity markets remain soft at the moment. [Dawn] [The News] [ET]
- World Bank Agri Financing: The World Bank’s Board of Executive Directors has approved $200 million in financing to support Pakistan in transforming the agricultural sector by adopting climate-smart technologies to improve water-use efficiency, and build resilience to extreme weather events and increase the incomes of small farmers. [WBO] [BR] [Dawn] [ET] [The Nation]
- Gwadar Free Zone: Disturbed by the frequent depreciation of the Pakistani Rupee (PKR), Chinese investors in Gwadar have sought permission to maintain their bank accounts in RMB in the Gwadar Free Zone without converting their money into Rupees. [BR]
- EU & Pakistan Exports: The Pakistan Economy Watch (PEW), on Sunday, said that Pakistani exports are set to take a hit as western economies, which are the main export destinations for Pakistan, have been badly hit by the war between Russia and Ukraine. [BR]
- Trade with Central Asia: The Pakistan Businesses Forum (PBF) reports that the government is working on a policy to enhance trade and connectivity with Central Asia Republics (CARs) through Afghanistan and Iran, and has already taken several measures. [BR]
- Pak-Afghan Trade Issues: A Pakistani delegation is paying a 3-day (July 18-20) visit to Kabul for negotiations with the interim Afghan government for the resolution of trade, transit and transportation issues facing the 2 sides, including night-time operations of border facilities for coal imports. [Dawn]
INTERNATIONAL – OVERVIEW & MARKET OUTLOOK
- Southeast Asian QR Mobile Payment Systems: Southeast Asian central banks are targeting to link their payment systems within the year that will let people buy goods and services throughout the region by scanning QR codes. By November, the 5 largest economies of Southeast Asia: the Philippines, Malaysia, Indonesia, Singapore and Thailand will sign an agreement on the integration of their mobile payment systems. This will make cross-border transfers much more efficient without using the USD. [Bloomberg]
- Chinese Economic Woes: Investors once enticed by China’s juicy yields and huge tech companies now say reasons to avoid the country outweigh incentives to buy. They cite everything from unpredictable regulatory campaigns to economic damage caused by strict Covid policies, risks stemming from a wobbly real-estate market and even President Xi Jinping’s coziness with Russia’s Vladimir Putin. China’s officials seem aware of the need to shore up growth: the central bank governor said the monetary authority will intensify the implementation of prudent monetary policy for stronger economic support. Officials, meanwhile, are censoring crowd-sourced documents tallying a widening mortgage boycott that is deepening the property-sector crisis. [Bloomberg] [Bloomberg] [NYT] [South China Morning Post]
- Russian Sanctions: The European Union will discuss tightening sanctions against Russia on Monday, as Kyiv accused Moscow of launching fresh strikes on multiple residential areas in eastern and southern Ukraine. [BR]
- US & OPEC: Major crude oil producers have spare capacity and are likely to boost supplies following President Joe Biden’s visit to the Middle East, a senior US energy envoy said on Sunday. [BR]
- European Heatwave: British Prime Minister Boris Johnson’s government stood accused on Sunday of failing to take an impending heat emergency seriously, as forecasters warned that lives were at risk as temperatures reached the 40°C mark. [BR] [Dawn] [BBC] [Reuters]
- Israel strikes Gaza: Israeli warplanes raided the Gaza Strip before dawn on Saturday, in what it said was a retaliatory strike for rocket fire from the Palestinian territory controlled by Hamas. [BR]
- Saudi Arabia Opens Airspace to Israel: Israeli airlines plan to expand and open new routes to India and other Asian destinations, after Saudi Arabia opened its airspace to all carriers; this would save fuel costs and reduce flight times. [BR]
- Startups and funding – where do we stand?: Where Pakistan is ramping up efforts to digitize its retail grocery industry ranging from quick commerce to strict B2B business models, the downturn in the startup funding space is also real. The startups are finding it hard to raise capital as funding and deals slow across the startup ecosystems. [BR]
- Railways paying Rs 35 billion pension to 115,000 unverified employees [Dawn]
- Who is responsible for Karachi’s descent into chaos?: “The global liveability index has been at odds with the port-city for the past several years, but its latest blow came last month when it placed Karachi at the bottom of its list, making the country’s financial hub the fourth worst place to live”. [ET]?
- A Welcome Commodities’ U-turn: “Pakistan’s economic misfortunes are aplenty. Persistent ignorance of structural reforms has brought us close to the brink of economic default, yet again.” - AAH Soomro [ET]
