POL price rise, Ravi & Sutlej Flood Alert, Pres. Alvi returns bills, LSMI decline, India Palm Oil Imports, Chinese Economic Worries.

TOPLINE

• Pakistan's caretaker government has raised prices of POL products by up to Rs 20 per liter from August 16-31. Petrol prices increased by 6.4% to Rs 290.45 per liter, while high-speed diesel (HSD) prices rose by 7.3% to Rs 293.40 per liter.
• Punjab’s Provincial Disaster Management Authority issued a medium-level flood warning for the Ravi and Sutlej rivers, with concerns of potential moderate flooding in nearby canals.
• President Alvi returned 13 bills passed by parliamentary proceedings, indicating concerns about their provisions.
• The Pakistan Bureau of Statistics (PBS) indicates a 10.26% decline in Large Scale Manufacturing Industries (LSMI) output for fiscal year 2022-23 compared to the previous year.
• India's palm oil imports surged by 59% to 1.08 million metric tons in July due to lower prices. Soybean oil imports dropped 22% to 342,270 tons, while sunflower oil imports rose 71% to 327,259 tons.
• President Xi Jinping has so far resisted pulling the trigger on a major stimulus to revive China’s economy as China yesterday unexpectedly reduced a key interest rate by the most since 2020. The move came shortly before the release of July data that showed rising unemployment, weak consumer spending growth and sliding investment.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

• Cotton Revival Amid Challenges: Favorable weather and increased planting are reviving Pakistan's cotton industry, countering prior flood setbacks, with 34% YoY growth in cotton cultivation and expected production of 12.77 million bales. The textile sector faces ongoing economic challenges like high interest rates, currency depreciation, and rising costs, while the rupee's pre-IMF SBA exchange rate is returning due to deteriorating economic fundamentals. [The News] [BR]
• Organic Meat Company's Acquisition: The Organic Meat Company Limited (TOMCL) has successfully acquired Mohammad Saeed Mohammad Hussain Limited (MSMH) to expand its market share and product range. The acquisition, approved by the Competition Commission of Pakistan, establishes MSMH as a wholly-owned subsidiary of TOMCL and fulfills TOMCL's IPO commitments. [MG] [ET]
• Pak-China Expo Boosts Trade: Chinese enterprises at Karachi's International Food and Agriculture Exhibition showed interest in Pakistani products and expressed willingness to do business, boosting Pakistan's export efforts to China. The exhibition focused on uniting international and local communities. [ET] [The Nation]

AGRI-INPUTS, WEATHER, WATER & POWER

• Petrol & Diesel Prices Soar in Pakistan: Pakistan's caretaker government has raised the ex-depot prices of petroleum products by up to Rs 20 per liter from August 16 to 31. Petrol prices increased by 6.4% to Rs 290.45 per liter, while high-speed diesel (HSD) prices rose by 7.3% to Rs 293.40 per liter. This adjustment was made due to international market price hikes. Over the past two weeks, refined product prices climbed by $13 per barrel to $111, leading to a $7 per barrel increase in petrol prices to $97. The government had previously raised petrol and HSD prices by nearly Rs 20 on August 1. [BR] [Dawn] [Dawn]
• Ravi & Sutlej Rivers Flood Warning: The Provincial Disaster Management Authority (PDMA) issued a medium-level flood warning for the Ravi and Sutlej rivers, with concerns of potential moderate flooding in nearby canals. The nearing capacity of dams on the Sutlej and Beas rivers in India, combined with anticipated heavy rainfall, raises the threat. Stormy rain conditions are expected in the upper river regions, and monsoon rains are forecasted until August 23. [Dawn]
• LSMI Output Decline & Recovery: The Pakistan Bureau of Statistics (PBS) indicates a 10.26% decline in Large Scale Manufacturing Industries (LSMI) output for fiscal year 2022-23 compared to the previous year. In June 2023, LSMI output dropped by 14.96% YoY but rose by 0.98% compared to May 2023, with a Quantum Index Number (QIM) of 112.21 for June 2023 and a QIM estimate of 114.83 for July-June 2022-23. [BR]
• Proposed K-Electric Surcharge for Revenue Recovery: The federal government is proposing a Rs 1.52 per unit surcharge on K-Electric to recover Rs 24.5 billion. During a hearing at Nepra, concerns were raised about enforcing the National Electricity Policy 2021 for past years. Some members questioned whether the amount was already accounted for in the budget, suggesting that if it was, the surcharge might not be justified. [BR] [Dawn] [ET]
• Saudi Investment & Ownership Shift: The Special Investment Facilitation Council (SIFC) approved consultants for reducing Pakistan and Barrick Gold's Reko Diq project shares in favor of Saudi Arabia. Barrick, owning 50% of Reko Diq, supports Saudi Arabia's Public Investment Fund buying out Pakistan's equity without diluting its stake. [MG]

AGRI UPDATES & PAKISTAN POLICY

• Rupee Extends Losses: The Pakistani rupee fell by Rs2.99 against the US dollar during interbank trade on Wednesday, extending its losses from the previous day. The local currency was changing hands at Rs 294.50 against the greenback at around 12:24 pm. [Dawn]
• Economic Continuity & Investment Drive: Caretaker Prime Minister Anwaar-ul-Haq Kakar prioritizes continuing economic policies and increasing foreign investment through the Special Investment Facilitation Council. He emphasizes power sector reforms, tax base expansion, and ongoing welfare projects, while aiming for quality healthcare and education. [BR] [BR]
• Digital Loan Shark Apps: Predatory practices by instant lending apps raise alarming questions about users' exploitation and the need for tighter regulations in Pakistan. The shifting of responsibilities between these organizations continues as each blames the other for the existing cracks in the digital lending space. With millions of lives at stake, however, there is an urgent need for accountability and consensus between the SBP, PTA, SECP and FIA; only then can we move towards any pragmatic solutions. [Dawn]
• President Alvi Returns Bills for Reconsideration: President Dr. Arif Alvi has returned 13 bills, including one empowering police to make warrantless arrests, that were approved by both parliamentary houses. The bills, which cover various areas such as education, media, and administration, will be reconsidered. The president's decision to return these bills indicates his concerns about their provisions. [ET] [ARY] [The News]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

• Russia Raises Rates: Russia's central bank raised its key interest rate by 350 basis points to 12% in an emergency move to counter the rouble's sharp decline. The rouble fell below the 100 threshold against the dollar due to Western sanctions and rising military spending. Despite the rate hike, the rouble remained weaker at 98.16 against the dollar, but better than its Monday low of around 102. [Dawn] [FT] [WION] [CNN] [CGTN] [CNBC]
• Chinese Economy: President Xi Jinping has so far resisted pulling the trigger on a major stimulus to revive China’s economy. The grim market reaction to a surprise rate cut shows investors want to see him take much bolder steps. There are tough choices ahead. The People’s Bank of China yesterday unexpectedly reduced a key interest rate by the most since 2020. The move came shortly before the release of July data that showed rising unemployment, weak consumer spending growth and sliding investment. The disappointing data spurred global investment banks to cut their 2023 China growth outlook. [Bloomberg] [Bloomberg]
• China's Low Fertility Rate: China's fertility rate hit a record low of 1.09 in 2022, the lowest among countries with over 100 million people. This alarming figure raises concerns as authorities work to counter declining birth rates, given China's aging population and its first population drop in decades. [Dawn] [Geo] [Reuters] [IT] [SW] [HT]
• India's Palm Oil Imports Surge, Soybean Oil Decline: India's palm oil imports surged by 59% to 1.08 million metric tons in July due to lower prices, aiding major producers Malaysia and Indonesia. Soybean oil imports dropped 22% to 342,270 tons, while sunflower oil imports rose 71% to 327,259 tons. This trend is expected to continue, potentially reaching around 1 million tons of imports in September. Overall, India's edible oil imports for the marketing year could hit a record 15.5 million tons, per the Solvent Extractors' Association of India. [BR]
• Comment: Afghan Taliban, Two Years of Consolidation - “The Afghan Taliban celebrated the second anniversary of Kabul's fall, facing challenges due to their unrecognized government. Senior leaders marked the occasion without addressing the reopening of girls' schools. Deputy Prime Minister Abdul Salam Hanafi hinted at considering people's demands, but their rigid stance on issues like education hampers foreign recognition.” - By Tahir Khan [Dawn]

PAKISTAN - REMAINDERS

• Independence Day Celebrations Thrive at Khanpur Dam with water sports in action. [ET]
• Accused Charged in Rs 5.8 billion M6 Land Scam Case for the Sukkur-Hyderabad Motorway (M6). [Dawn]
• Fintech ABHI Partners with Lucky Textile Mills Limited for AbhiSalary Service. [The News]