Rain Emergency, Petrol Hike, Urea Price Hike, New Railways Assembly, China Rolls Over $2B Debt, Russian Petrol Export Ban & Warning.

TOPLINE

• Sindh’s CM declared a rain emergency due to heavy rainfall, directing high alert status as a half-day duty was declared for institutions in Karachi today. In Gwadar, the Balochistan government declared a state of emergency and calamity-hit status after heavy rains caused flash floods.
• The interim government has increased petroleum product prices by up to Rs 4.13/liter to Rs 279.75 starting March 1, 2024, mainly due to higher premiums.
• Due to a gas price hike by the federal government, Engro Fertilizers raised urea prices by Rs 785/bag from March 1, 2024, now standing at Rs 5,489/bag, Rs 4,647/bag and Rs 3,767/bag, respectively. following a similar move by Fauji Fertilizer Bin Qasim Limited. However, Engro opted not to increase the selling price of imported urea.
• Pakistan Railway has initiated local manufacturing of 184 high-speed passenger coaches under a technology-transfer agreement with China, marking the first instance of such production.
• China has extended a significant relief to Islamabad by rolling over its $2 billion loan for one year. The SBP reported a $59 million decrease in the country's total liquid foreign reserves during the last week. As of February 23, 2024, the reserves stood at $13.039 billion.
• Russia will ban petrol exports for six months to address domestic demand shortages, despite being the world’s third-largest oil producer. President Putin cautioned of the risk of provoking a nuclear war as Europe contemplates sending more troops to Ukraine.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

• Inflation Outlook: Pakistan's Reforms - Pakistan's inflation is expected to be 24.5-25.5% in February, possibly easing to 23.5-24.5% in March, according to the finance ministry, as the country implements reforms tied to a $3 billion IMF arrangement. January saw a high Consumer Price Index of 28.3%. [BR]
• Cotton Prices Stable in Sindh & Punjab: Cotton prices in Sindh range from Rs 20,800-23,000/maund, and in Punjab from Rs 21,000-23,000/maund. Phutti prices in Punjab are between Rs 8,500-10,200/40 kg. Recent sales include various quantities at different rates, with the Spot Rate remaining unchanged at Rs 21,500/maund. [BR]
• Pink Salt for Global Markets: President Dr. Arif Alvi emphasized the importance of promoting pink salt as a Pakistani product in global markets after enhancing its value to meet international standards. During his visit to the Khewra salt mines, he highlighted the potential to earn foreign exchange by adding value to local raw salt. [ET]
• Punjab Distributes Food Bags to BISP-Registered Families: Land revenue field staff and local bodies employees are verifying BISP-registered families for Punjab's Nigehban Ramzan program, distributing dry food bags. The Punjab government shared data of 97,021 families eligible for food bags after verification. [Dawn]
• Pakistan's Engineering Growth Strategy: The Pakistan Engineering Council (PEC) has proposed a 15-year Make in Pakistan (MIP) plan focusing on maximizing local production of Engineering Goods (EGs) through indigenous resources, import substitution, and technology transfer to overcome challenges posed by political instability and elevate Pakistan as a global manufacturing hub. [BR]
• Pakistan, China Explore Agro-Food Investments: TDAP and Pakistan’s Commercial Section in Beijing welcomed a delegation from China's Shandong Bomao Holding Group to explore investment opportunities in Pakistan’s agro and food sector. TDAP Chief Executive highlighted Pakistan's meat export potential and desire to attract foreign investments in the livestock sector during the meeting in Karachi. [BR]
• Gold Jewelry Exports Halt Over FBR System Change: Gold jewelry exports came to a standstill last week due to the removal of SRO760 from FBR's WeBOC system, reported traders. PGJTEA Chairman informed FBR that SRO facilitated exemptions, including sales tax, but its removal resulted in incorrect sales tax display. [Dawn]
• Corporate Result: Rs 6.91 billion was the profit reported by Rafhan Maize Products for the year ended Dec 31, 2023. [ET]

AGRI-INPUTS, WEATHER, WATER & POWER

• Heavy Rains Prompt Emergency Declarations in Sindh & Gwadar: Sindh’s CM declared a rain emergency due to heavy rainfall, directing high alert status for local bodies, administration, and hospitals. He also declared a half-day duty for institutions in Karachi today. In Gwadar, the Balochistan government declared a state of emergency and calamity-hit status after heavy rains caused flash floods, disrupting life, displacing hundreds, and damaging homes and businesses. [BR] [Dawn]
• Gilgit-Baltistan Demands Share of Diamer Bhasha Dam Profits: The Gilgit-Baltistan government has decided to demand its share of water user charges and net hydel profit from the Diamer Bhasha dam from the federal government. Chief Minister Haji Gulber Khan chaired a meeting in Islamabad and formed a committee to prepare recommendations for submission to the federal government. [Dawn]
• March 2024: Pakistan Fuel Price Hike - The interim government has increased petroleum product prices by up to Rs 4.13 per liter starting March 1, 2024, mainly due to higher premiums. The price of petrol has been fixed at Rs 279.75 from Rs 275.62 in last fortnightly review. The price of HSD has been kept unchanged at Rs 287.33 per liter, following recommendations from the Oil and Gas Regulatory Authority (OGRA). [BR] [ET]
• NERPA’s Fuel Charges Review: January 2024 - Nepra received K-Electric's provisional Fuel Charges Adjustment request for January 2024, presenting three scenarios of adjustment. Caretaker Prime Minister directed Nepra to resolve pending issues, including determining multi-year tariffs, following concerns raised by Saudi investors about protecting earlier investments. [BR]
• Sindh Government, World Bank Partner for Renewable Energy: Sindh government partners with the World Bank for renewable energy projects, aiming to combat greenhouse gases and protect against natural disasters. Mehfooz Qazi announces a $100 million investment during a seminar on renewable energy's importance for Karachi and the export industry. [ET]
• Fertilizer Price Surge: March 2024 - Due to a gas price hike by the federal government, Engro Fertilizers raised urea prices by Rs 785 per bag from March 1, 2024, now stand at Rs 5,489 per bag, Rs 4,647 per bag and Rs 3,767 per bag, respectively, following a similar move by Fauji Fertilizer Bin Qasim Limited (FFBL). However, Engro opted not to increase the selling price of imported urea provided by the government to support farmers. [BR]
• Diamer Bhasha and Mohmand Dams Implementation - The Supreme Court-appointed implementation committee for Diamer Bhasha and Mohmand Dams met to review progress on land acquisition and resettlement efforts for locals. Chaired by Wapda Chairman Lt Gen (Retd) Sajjad Ghani, the meeting was held in response to a request from the sub-committee overseeing these aspects specifically for the Diamer Bhasha Dam project. [ET]
• Pakistan Railway Produces High-Speed Coaches, Wagons: Pakistan Railway has initiated local manufacturing of 184 high-speed passenger coaches under a technology-transfer agreement with China, marking the first instance of such production. Additionally, the department has commenced manufacturing 620 high-capacity flat goods’ wagons in Pakistan under another technology-transfer agreement with China. [Dawn]

AGRI UPDATES & PAKISTAN POLICY

• Political Government Formation: The 16th National Assembly commenced with 302 members, including Nawaz Sharif, taking the oath amid allegations of rigging and disruptions by PTI lawmakers. The election for Prime Minister is scheduled for Sunday, March 3, with nomination papers due by 2:00 pm on Saturday, March 2. Khyber Pakhtunkhwa and Balochistan lawmakers will elect their respective chief ministers on Friday and Saturday. [BR] [BR] [Dawn] [Dawn] [Dawn] [Dawn] [ET]
• PTI Elects Leaders: Gohar Chairman, Omar Ayub Secretary - Barrister Gohar Ali Khan and Umar Ayub were elected Chairman and Secretary General of PTI respectively, unopposed. Leadership positions in Khyber-Pakhtunkhwa, Punjab, and Sindh were also filled unopposed. However, a three-way contest for the president of the party's Balochistan chapter is scheduled for March 3, with final results expected on Sunday. [ET]
• FBR Misses February Target, Meets Fiscal Year Goal: In February 2024, the FBR collected Rs 681 billion, missing the target by Rs 33 billion, but overall met the tax collection target for the first eight months of the fiscal year. The government has outlined eight contingency measures to generate an additional Rs 18 billion per month in case of revenue shortfalls during 2023-24. [BR]
• Fiscal Consolidation Urged Amid Standby Review: The Finance Ministry stressed fiscal consolidation to manage pressure from higher mark-up payments, while urging the new government to finalize the Standby Arrangement review and agree on a new program. Economic growth in the second quarter is expected to reach around three percent due to increased manufacturing output and higher crop production. [BR]
• Pakistan's Foreign Reserves Dip: SBP Report - The State Bank of Pakistan (SBP) reported a $59 million decrease in the country's total liquid foreign reserves during the last week. As of February 23, 2024, the reserves stood at $13.039 billion, down from $13.098 billion as of February 16, 2024. The decline in SBP reserves was attributed to debt repayments, while commercial banks' reserves saw a slight increase. [BR]
• China Extends $2 Billion Loan Rollover for Pakistan: China has extended a significant relief to Islamabad by rolling over its $2 billion loan for one year, acknowledging Pakistan's financial constraints. The finance ministry confirmed China's acceptance of the rollover request due to the country's inability to repay the loan, as concerns emerge with SBP holdings falling below $8 billion amidst dwindling inflows and sluggish remittances. [Dawn]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

• Israeli Genocide: 112 Reported Dead in Aid Distribution: At least 112 Palestinians seeking humanitarian aid were reportedly killed in Gaza City on Thursday, with many more injured. Israel disputed this, stating that people were trampled and run over by fleeing aid trucks. The latest violence brings the Palestinian death toll in the nearly five-month war to over 30,000, with another 70,000 injured, as per Gaza Health Ministry. [ET] [VOA]
• India's Basmati Rice: Export Concerns - India's basmati rice exports may drop in 2024 due to Pakistan's competitive pricing amid increased production. Despite India's leading position in exporting to key markets like Iran and Iraq, basmati shipments reached 4.9 million metric tonnes in 2023, nearly matching the record set in 2020, generating a record revenue of $5.4 billion fueled by higher prices. [BR] [The News]
• WTO Ministerial Talks Extend Amid Stalled Negotiations: The WTO ministerial meeting in Abu Dhabi extended negotiations for an extra day with no breakthrough in talks on setting new global commerce rules. The conference aims to address issues such as ending fishing subsidies and extending a moratorium on digital trade tariffs, opposed by India and South Africa. [BR]
• Putin Warns West Over Ukraine, Citing Nuclear War Risk: President Putin warned Western countries against sending troops to Ukraine, cautioning of the risk of provoking a nuclear war and emphasizing Russia's capability to strike targets in the West. The conflict in Ukraine has triggered the worst crisis in Moscow's relations with the West since the Cuban Missile Crisis in 1962. [Dawn] [ET]
• Russia Imposes Six-Month Petrol Export Ban: Russia will ban petrol exports for six months from March 1 to address domestic demand shortages, despite being the world’s third-largest oil producer. Fuel shortages have persisted due to high demand and refinery repairs since last summer, exacerbated by Ukrainian drone attacks on refineries, leading to a surge in wholesale gasoline prices. [BR]
• India Approves $15.2 Billion Semiconductor Plant Project: India approved the construction of three semiconductor plants valued at 1.26 trillion rupees ($15.2 billion) by firms including Tata Group, as part of its goal to become a major electronics manufacturing hub. The country aims to rival chipmaking giants like Taiwan, with expectations for its semiconductor market to reach $63 billion by 2026, despite currently lacking its own chip making facility. [BR]
• UN Withdraws Motion on Solar Radiation Modification Research: UN delegates withdrew a motion for more research into solar radiation modification (SRM) technologies aimed at combating climate change due to concerns about health and environmental risks. Opponents at the UN Environment Assembly (UNEA) feared SRM might allow big polluters to evade responsibility, according to organizations monitoring the debate. [Dawn]

PAKISTAN - REMAINDERS

• Bank Alfalah Extends Partnership with BISP: Bank Alfalah in partnership with a government welfare program, securing a three-year contract to serve 4.4 million women beneficiaries of the Benazir Income Support Programme. Since 2011, the bank has disbursed over Rs 346 billion using digital security techniques. [The News]
• PMDC Directive: Nutraceutical Prescriptions - Despite opposition from the health ministry, the Pakistan Medical and Dental Council (PMDC) endorsed the federal cabinet and Ministry of Health's directive to refrain from prescribing nutraceuticals, including multivitamins and food supplements, to patients. The PMDC issued a notification on February 23, 2024, directing compliance with the cabinet's decision. [The News]
• Opinion: Beware Green Colonialism - “A green transition should avert worsening existing inequities. The global community has not yet shown sufficient resolve to curb global warming emissions to avert catastrophic climate change. Moreover, the very effort to transition away from dirty fossil fuels to cleaner ‘green’ energy is becoming increasingly contentious. Transitioning away from using fossil fuels is necessary, of course, yet the way this transition takes place merits careful consideration to avert worsening the existing inequities plaguing our world.” - By Syed Mohammad Ali [ET]