PM Shehbaz elected, Ramadan Subsidy, Veg Exports, Rain Casualties, IMF on Pakistan, US & China Political Updates.

TOPLINE

• The Prime Minister-elect Shehbaz Sharif secured 201 votes, defeating Omar Ayub with 92 votes on Sunday. The younger Sharif pledged reforms, while the PTI leader rejected the elections and vowed to protest. A joint sitting of Parliament for the presidential election is set for March 9 at 10 am.
• The government allocated Rs 6.484 billion for subsidized Flour, Clarified Butter, and Sugar through Utility Stores Corporation during Ramadan. Essential kitchen items have seen price increases. CPI-based inflation decreased to 23.1% in February 2024 from 28.3% in January and 31.5% in February 2023.
• PKR 20.4 billion was the export value of vegetables in Jan 2024, up 190% compared to PKR 7.06 billion in Jan 2023.
• At least 27 people died and 38 were injured in rain-related incidents in KPK. In Balochistan, 5 people died and 237 houses were damaged alongside livestock. Agriculture officials suggest that the current rain spell has been more beneficial than harmful for the wheat harvest, particularly in arid areas.
• The IMF recommends an 18% GST on items like unprocessed food, medicines, and stationery to generate Rs 1,300 billion. The IMF recommends doubling the tax burden for both salaried and non-salaried classes, merging distinctions, reducing tax slabs, and eliminating tax exemptions on private employer pension contributions.
• China is set to announce a 5% growth target and outline its strategy for supporting the slowing economy this week. US congressional leaders revealed a $436 Billion package to keep large parts of the government operating through Sept. 30 as they sprint to avert another shutdown deadline this week.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

• Ramadan Subsidies: The government allocated Rs 6.484 billion for subsidized Flour, Clarified Butter, and Sugar through Utility Stores Corporation during Ramadan, with Rs 3.474 billion for Flour, Rs 1.610 billion for Sugar, and Rs 1.4 billion for ghee (clarified butter), along with smaller subsidies for other essentials like pulses, rice, and grams. [BR]
• Salt Export Industry in Crisis Over Delayed Refunds: The salt export industry faces a severe crisis due to delayed sales tax refunds worth billions. These delays are harming cash flow, increasing operational costs, and exacerbating economic challenges for salt exporters, vital to the national economy. [BR]
• Kitchen Essentials Prices Rise Amid Inflation Decline: Essential kitchen items, including sugar, chicken, and eggs, have seen price increases. CPI-based inflation decreased to 23.1% in February 2024 from 28.3% in the previous month and 31.5% in February 2023, according to PBS. On average, CPI stood at 27.96% during the first 8 months of the current fiscal year, compared to 26.19% during the same period last fiscal year. [BR] [BR] [ET]
• Rainfall Boosts Wheat Harvest, Poses Challenges for Gram Crops: Agriculture officials suggest that the current rain spell has been more beneficial than harmful for the wheat harvest, particularly in arid areas. While it may pose challenges for gram crops due to increased moisture, the rain is seen as fortunate for standing crops like Wheat, Berseem, and Fodder. [ET]
• Textile Export Shift: Pakistan's Concerns - Pakistan's textile exports dropped by 15% in 2023 from a post-Covid surge, raising concerns amid the country's trade deficit. However, increased unit prices of 25-30% between 2021 and 2022, due to global supply chain disruptions, helped offset the decline, allowing Pakistan to ship historic quantities to key markets like the EU and North America. [BR]
• Malaysia Offers Market Access for Pakistani Products: The Malaysian Consul General in Karachi announced 10,000 Pakistani products in a free trade agreement, with Malaysia including 6,000 products. [ET]
• Vegetable Export: Rs 20.4 billion was the export value of vegetables in Jan 2024, up 190% compared to Rs 7.06 billion in Jan 2023, according to the Pakistan Bureau of Statistics. [ET]
• Opinion: Early Cotton Cultivation - “For planting, it’s advisable to place 3 to 4 seeds per hole, with a seed depth of 1 to 1.5 inches in the soil. In cultivated crops, maintain a plant spacing of 9-12 inches, with a recommended number of plants per acre ranging from 17 to 23 thousand. Before planting, ensure that the fields are adequately watered, and plant the seeds approximately one inch above the water level.” - By Sajid Mahmood [BR]

AGRI-INPUTS, WEATHER, WATER & POWER

• Rain-Related Tragedies Hit Khyber Pakhtunkhwa & Balochistan: At least 27 people, including children, died and 38 were injured in rain-related incidents in Khyber Pakhtunkhwa. Heavy rainfall since Thursday also caused livestock losses. In Balochistan, 5 people died and 237 houses were damaged, with casualties reported in Barkhan and Kharan, along with significant property damage. [BR] [BR] [BR] [Dawn] [ET] [ET] [ET]
• Sindh Abadgar Board Calls for Agricultural Input Price Control: The Sindh Abadgar Board (SAB) urged the incoming governments to control farm input prices and align agricultural commodity prices with input costs. Chaired by Syed Mahmood Nawaz Shah, the meeting emphasized prioritizing the agriculture sector and addressing its challenges. [Dawn]
• IMF Proposes 18% GST Hike: The IMF recommends an 18% GST on items like unprocessed food, medicines, and stationery, estimating it could generate Rs 1,300 billion. However, the potential inflationary impact of such a hike in indirect taxation hasn't been assessed. [The News]
• Pakistan's Petroleum Sales Dip in February 2024: In February 2024, Pakistan's petroleum product sales dropped by 8.0% to a 5-month low of 1.12 million tons due to higher prices and decreased reliance on FO-based power production. Motor spirit (MS) sales decreased by 1.0% to 0.54 million tons, while high-speed diesel (HSD) sales fell by 7.0% to 0.45 million tons. [BR] [ET]
• Petrol & Diesel Prices Adjusted: On March 1, 2024, the interim government adjusted petrol and high-speed diesel prices by Rs 4.25/liter and 26 paisa, respectively, factoring in exchange rates and dealers' margins. Additionally, in the latest review, petrol prices increased by Rs 4.13 per liter, while high-speed diesel rates remained unchanged. [BR]
• Pak Suzuki Raises Car Prices Amid Inflation: Pak Suzuki has increased its car prices by up to Rs 180,000 citing inflation and rising overhead costs. The new rates, communicated to authorized dealers, show a price hike ranging from Rs 80,000 to Rs 180,000, effective from March 1, 2024. [BR]
• Motor Cars Import: Rs 9 billion was the import value of motor cars in Jan 2024, up 499% compared to Rs 1.5 billion in Jan 2023. [ET]

AGRI UPDATES & PAKISTAN POLICY

• PM-Elect Shehbaz Wins with 201 Votes: The Prime Minister-elect secured 201 votes, defeating Omar Ayub with 92 votes, while the JUI-F abstained and Akhtar Mengal did not participate. The younger Sharif pledges reforms, while the PTI leader rejects the elections and vows to protest. A joint sitting of Parliament for the presidential election is set for March 9 at 10 am. [BR] [Dawn] [ET] [ET] [ET] [Samaa TV]
• FBR Chairman Calls Emergency Meeting for Revenue Target: FBR Chairman Amjed Zubair Tiwana has called an emergency conference to meet the March 2024 revenue target of Rs 879 billion. The FBR aims to surpass this target with a strategic plan. Federal Tax Ombudsman Asif Mahmood Jah stated that 94% of FTO's orders were implemented in 2023 due to strict SOPs. [BR] [BR]
• IMF Proposes Doubling Tax Burden for All Classes: The IMF recommends doubling the tax burden for both salaried and non-salaried classes, merging distinctions, reducing tax slabs, and eliminating tax exemptions on private employer pension contributions. These changes to Personal Income Tax (PIT) could generate an extra 0.5% of GDP annually, about Rs 500 billion. [The News]
• Pakistan's Trade Deficit Shrinks in FY 2023-24: In the first eight months of fiscal year 2023-24, Pakistan's trade deficit decreased by 30.18% to $14.872 billion compared to the same period in the previous year. Exports increased by 9% to $20.351 billion, while imports declined by 11.87% to $35.223 billion. [BR] [ET]
• Pakistan's Inflation Slows to 23.1%: Potential for Rate Cut - Pakistan's inflation rate declined to 23.1% last month, the slowest pace in 16 months, attributed to reduced food inflation and a high base effect, potentially leading to a central bank interest rate cut. The figure surpassed expectations. [ET]
• Dollar Appreciation Fear Grows: Fear of dollar appreciation grows as forward selling premium reaches Rs 8 per dollar for two months, prompting exchange companies to halt sales except for travel. Traders note stability in the exchange rate, but the significant premium on forward selling fuels suspicions of managed rates. [Dawn]
• Afghanistan Factions Urge TTP Talks with Pakistan: The Haqqani and Kandahari factions of Afghanistan have urged the Tehreek-e-Taliban Pakistan (TTP) to hold talks with Islamabad to reduce tensions. Pakistan has enlisted the help of the Jamiat Ulema-e-Islam-Sami (JUI-S) leadership to bring the TTP to the negotiation table. [ET]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

• Israeli Genocide - Ceasefire Talks: Mediators are anticipated to resume discussions in Cairo as early as Sunday, aiming to broker a ceasefire agreement acceptable to both Israel and Hamas for Gaza. Israeli and Hamas delegations are expected to arrive in Cairo, with Israel waiting for confirmation of the status of hostages before sending its delegation. [ET] [BR] [CGTN]
• WTO Ministerial Meeting in Abu Dhabi: Amidst global tensions and elections across 64 nations, alongside growing trade discontent, expectations for major breakthroughs at the 13th WTO ministerial meeting in Abu Dhabi were modest. Nonetheless, with 164 members convening, efforts were made to address various trade issues and shape the future of the global trading framework. [ET] [Dawn]
• China Growth Target: China is set to announce its 2024 growth target — expected to be around 5% — and outline its strategy for supporting the slowing economy at the nation’s most high-profile annual political gathering this week. Premier Li Qiang will deliver the government work report on Tuesday. Officials are looking to chart a recovery after a turbulent year that saw the economy grapple with deflation, an ongoing property crisis, mounting debt burden and foreign capital exodus. Here’s everything else you can expect to see at the annual gathering. [BBG]
• US Funding Plan: US congressional leaders revealed a detailed agreement to keep large parts of the government operating through Sept. 30 as they sprint to avert another shutdown deadline at the end of the week. The $436 billion package, covering about a quarter of funding for government agencies, represents the first real progress toward resolving ideological clashes behind the series of shutdown threats and interim patches the US has operated under for more than 5 months. It includes provisions to prevent oil sales to China from the US’s Strategic Petroleum Reserve and track foreign purchases of US farmland. [BBG] [BBG]
• Iran's $80 Billion Investment Plan to Boost Gas Output: Iran plans to increase gas output to 1.3 billion cubic meters per day in five years, investing $80 billion in field development to maintain its global energy role. Despite sanctions, Iran relies on domestic firms for energy sector development but faces potential gas imbalances with rising domestic consumption. [BR]
• Sri Lanka Shifts Solar Project from China to India: Sri Lanka awarded the construction of three solar and wind hybrid power generation facilities to an Indian company, replacing a tender won by a Chinese firm. India's concerns about increasing Chinese influence in the island nation, which is strategically located near key shipping lanes and within India's sphere of influence, have prompted the move. [BR]
• Texas Fire: The snowstorm has passed, but the fire — one among several major blazes active in Texas — keeps burning. As of Friday, the Smokehouse Creek fire had affected more than a million acres, making it the largest wildfire in Texas history and one of the biggest in the history of the country. Still only 15% contained, it has crossed into Oklahoma, leaving in its wake herds of dead cattle and dozens of burned homes. At least 2 people have died. [NYT] [Tamu] [Weather]
• Qatar's Ambitious LNG Market Share Target: Qatar aims to control nearly 25% of the global LNG market by 2030 through an 85% expansion in production from its North Field, potentially impacting rival projects, particularly in the United States, where export approvals have been paused by President Biden. [BR]
• OPEC+ Extends Oil Output Cuts Amid Economic Concerns: OPEC+ led by Saudi Arabia and Russia agreed to extend oil output cuts into the second quarter, supporting the market amidst global economic growth concerns. Saudi Arabia will maintain its voluntary cut of 1 million bpd until June, with gradual reversals based on market conditions, as per state news agency SPA. [BR] [ET] [CGTN] [NDTV]

PAKISTAN - REMAINDERS

• Sindh Rights Chair Calls for Rs 32,000/month Minimum Wage and Worker Protections. [ET]
• Sindh Wildlife Survey: Over 60 Waterfowl Species Recorded. [Dawn]
• Opinion: Agriculture’s Deep-Rooted Challenges - “Thanks to the latest rollover of a $2 billion Chinese loan, there is apparently little to worry about the rupee’s health till the end of March 2024. But the rupee’s prospects in April-June 2024 may not remain as certain. Weak fundamentals of Pakistan’s external economy — particularly growing external debt servicing requirements amidst no big hope for a sustainable boost to foreign exchange reserves will surely keep the local currency under pressure.” - By Mohiuddin Aazim [Dawn]
• Opinion: Why Startups Fail - “Too much money came in, creating certain habits that were not conducive for profitability or sustainability, the venture capital (VC) and tech sector was the place to be where employees were paid hands over fist. And then came the wave of popular startups shutting down. Recently, there have been rumors about layoffs in established tech companies.” - By Fatima S Attarwala [Dawn]
• Opinion: Dangers of Urban Flooding - “Urban flooding’s impact on power infrastructure requires a comprehensive understanding of immediate and long-term consequences. Disaster preparedness, resilient infrastructure design, and adaptive strategies emerge as imperative elements for minimizing disruptions and building a resilient and sustainable energy future. As power generation companies navigate an era of climate uncertainty, addressing immediate challenges and engaging in forward-thinking strategies become paramount.” - By Zia ul Islam Zuberi [BR]