- Pakistan is expecting heavy rains across several regions starting Thursday, accompanied by snowfall and strong winds, potentially leading to flash floods and disruptions with the weather system set to last for two days.
- The government will allow E&P companies to allocate gas, with 35% to the private sector and 65% to public sector firms, reducing reliance on imported RLNG.
- Fertilizer production in the country increased by 10.07% in the first half of the current financial year. Nitrogen fertilizer output rose by 11.48% to over 1.778 million metric tons, while phosphate fertilizer production grew by 1.12% to about 382,585 metric tons.
- The 16th National Assembly's inaugural session, set for today, was called by Speaker Raja Pervaiz Ashraf after President Arif Alvi declined to sign an earlier summoning summary, citing concerns over reserved seats for the Sunni Ittehad Council.
- The PML-N-led coalition government is hesitant to accept a non-party technocrat as finance minister and may push for its own candidate. The PTI has urged the IMF in a letter to endorse an audit of the 2024 elections for political stability in Pakistan before engaging in discussions for a new bailout package.
- The US dollar strengthened on inflation data anticipation. Market volatility rose with portfolio rebalancing. Meanwhile, on Wall Street, the anticipation of the influential PCE price index report, indicating potential Fed rate cuts, led to caution among investors after a previous AI-driven rally.
COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE
- Corporate Result: Rs 185.5 million was the profit reported by The Organic Meat Company for half year ended Dec 31, 2023, down 9% compared to a profit of Rs 203.9 million last year. [ET]
- Punjab Cotton Farmers Lose Interest Amid Poor Season: Cotton farmers in Punjab, Pakistan, are losing interest in the upcoming season after a dismal 2023-24 season marked by plunging prices and record-low output. The provincial Agriculture Department drastically downgraded the cotton production estimate, leading to Punjab's share of national cotton production dropping from over 70% to barely 50%. [The News]
- Cotton IPM Training Workshop Emphasizes Modern Techniques: A one-day training workshop on Integrated Pest Management (IPM) for cotton crops was attended by officers and field staff of the agriculture department at the Zila council hall. Deputy Secretary Dr. Haidar Karrar emphasized modern cotton production techniques and the effectiveness of early sowing triple-gene cotton varieties based on last year's experiments. [DT]
AGRI-INPUTS, WEATHER, WATER & POWER
- Pakistan Braces for Heavy Rains, Snowfall, & Disruptions: Pakistan is expecting heavy rains across several regions starting Thursday, accompanied by snowfall and strong winds, potentially leading to flash floods and disruptions. The weather system, predicted by the Pakistan Meteorological Department, is set to last for two days, with the National Disaster Management Authority issuing warnings for vulnerable areas. [BR] [Dawn]
- State Dept. Discusses Pak-Iran Pipeline: The State Department confirmed ongoing discussions with Pakistan on the Pak-Iran gas pipeline project but declined to comment on specific diplomatic details. Emphasizing the priority of assisting Pakistan with its energy shortage crisis, the spokesperson refrained from addressing whether the project remained a concern for the US. [BR]
- March Fuel Price Increase: The government will increase gasoline prices by nearly 2% for the first half of March due to rising global oil prices, with gasoline up by Rs 5/liter to Rs 292.33, high-speed diesel by Rs 2 to Rs 277.62, light diesel oil by Rs 0.80/liter, and kerosene oil by Rs 0.70/liter. [The News] [Dawn]
- Gas Allocation Shift: 35% to Private Sector - The government will allow E&P companies to allocate gas, with 35% to the private sector and 65% to public sector firms, reducing reliance on imported RLNG. The caretaker regime's efforts added 152 mmcfd of natural gas, potentially saving $42 million monthly, with plans for another 280 mmcfd increase by year-end through well digging and discoveries, according to a senior Energy Ministry official. [The News]
- FBR Issues Rs 100 Billion Tax Notice to SNGPL: The Federal Board of Revenue (FBR) has issued Sui Northern Gas Pipeline Limited (SNGPL) a Rs 100 billion tax recovery notice regarding a swapping issue, adding to a previous demand of Rs 60 billion for FY 2017-18. SNGPL is pursuing legal remedies and intends to appeal against the demand at various appellate forums. [BR]
- Fertilizer Production Surges: Up 10.07% - Fertilizer production in the country increased by 10.07% in the first half of the current financial year. Nitrogen fertilizer output rose by 11.48% to over 1.778 million metric tons, while phosphate fertilizer production grew by 1.12% to about 382,585 metric tons. In December 2023, overall fertilizer output increased by 4.65% compared to the same month the previous year. [The Nation]
- LNG Subsidy Dispute Hits Domestic Consumers: Provinces refuse to cover subsidized LNG costs for fertilizer plants, resulting in the caretaker government imposing a Rs 17 billion burden on domestic consumers. The Petroleum Division estimates this cost due to supplying LNG at Rs 1,239 per mmbtu from January to March 2024, compared to the notified RLNG price of $13 per mmbtu. [ET]
- Privatization Focus: Nandipur & Guddu Plants - The Cabinet Committee on Privatisation has instructed the Power Division to provide timelines for resolving obstacles in the privatization of Nandipur and Guddu Power Plants. The Ministry of Privatisation noted previous directives from August 2019 regarding the selection of ten Public Sector Enterprises for privatization, including Nandipur and Guddu Power Plants. [BR]
- PRL's $1 Billion Investment for Euro-V Fuel Boost: PRL is investing $1 billion to boost Euro-V compliant fuel production and double its processing capacity by 2028 with a $1.7 billion investment, following a new government policy. Overall, Pakistan's refineries plan to invest $5-6 billion to enhance production, potentially doubling petrol output, increasing diesel by 47%, and reducing furnace oil by 78%. [PT]
- Mangla Water Level: 1114.90 feet of water was recorded in the country’s second largest reservoir on Wednesday. [ET]
AGRI UPDATES & PAKISTAN POLICY
- 16th National Assembly Inaugural Session Delayed: The 16th National Assembly's inaugural session, set for today, was called by Speaker Raja Pervaiz Ashraf after President Arif Alvi declined to sign an earlier summoning summary, citing concerns over reserved seats for the Sunni Ittehad Council. This comes after the constitutional deadline of 21 days post the February 8 general elections. [BR] [Dawn] [ET]
- PML-N Coalition Hesitant on Technocrat Finance Minister: The PML-N-led coalition government is hesitant to accept a non-party technocrat as finance minister and may push for its own candidate, despite concerns about past economic damage. Former prime minister Nawaz Sharif warned of challenges ahead, foreseeing economic and political instability during the coalition's initial two years in power. [BR] [Dawn]
- PTI Calls for Election Audit Before IMF Talks: The PTI has urged the IMF in a letter to endorse an audit of the 2024 elections for political stability in Pakistan before engaging in discussions for a new bailout package. This request was revealed during a press conference in Islamabad by PTI leaders Barrister Gohar Ali Khan, Omar Ayub, Meher Bano Qureshi, and Muzammil Aslam. [Dawn]
- Oath Taken by KP & Balochistan Assembly Members: Newly elected members of the Khyber Pakhtunkhwa and Balochistan assemblies took oath on Wednesday, joining those from Punjab and Sindh who had done so earlier. In KP, 116 representatives were sworn in despite disruptions in the session, which was convened by KP Governor Ghulam Ali on advice from caretaker Chief Minister Syed Arshad Hussain Shah. [Dawn] [ET]
- China Rolls Over $2 Billion Loan to Pakistan: China has rolled over $2 billion to Pakistan, boosting foreign exchange reserves. The loan, at a 7.1% interest rate, was maturing in March. Pakistan paid Rs 26.6 billion last fiscal year on deposits made by China, Saudi Arabia, and the UAE, helping replenish the State Bank of Pakistan's $8 billion foreign reserves. [The News] [Dawn]
- SBP Changes Deadline for Banks' Exchange Rate Data: The State Bank of Pakistan (SBP) has revised the timeline for submission of Banks' Floating Exchange Rates data. Effective February 2024, the deadline for submission has been moved to the 2nd working day of the following month, and it will be further changed to the 1st working day of the following month effective January 2025, as per a circular issued to banks by the SBP. [BR]
- PSX - Record Profits & Dividends in 2023: The net profit of the top 100 companies listed on the Pakistan Stock Exchange surged 51% to over Rs 1.5 trillion in 2023, setting a new record high. Dividends paid to shareholders increased by 42% year-on-year to Rs 547 billion. The PSX benchmark KSE-100 Index grew by 55% in 2023, closing the year as the best-performing bourse globally, reaching 62,451 points on December 29. [ET]
INTERNATIONAL – OVERVIEW & MARKET OUTLOOK
- Israel-Hamas Conflict: Intensified Fighting, 30,000 Dead - Fighting intensified in Gaza with nearly 30,000 reported dead in the five-month Israel-Hamas conflict, as mediators seek a truce. Gaza saw 91 more deaths in overnight Israeli bombardment, prompting UN warnings of humanitarian crisis and famine. Mediators from Egypt, Qatar, and the US aim for a six-week ceasefire after Hamas's October 7 attack on Israel. [BR]
- Vietnam Imports Indian Brown Rice: Vietnam, one of the world's top rice exporters, has imported husked brown rice from India for the first time in years to meet global demand. With India halting white rice exports in 2023, Vietnam has seen a surge in export orders, prompting the import of at least 200,000 metric tons of husked brown rice for processing and export of the refined, white variety. [BR]
- Dollar Strength, Aussie & Kiwi Weakness: The US dollar strengthened on inflation data anticipation, while the Australian and New Zealand dollars weakened due to interest rate forecasts and low inflation. Market volatility rose with portfolio rebalancing. Meanwhile, on Wall Street, anticipation of the influential PCE price index report, indicating potential Fed rate cuts, led to caution among investors after a previous AI-driven rally. [BR] [BR]
- Biden's Support of Israel Sparks Protest Vote: Following a significant protest vote in the Michigan primary over President Biden's support of Israel, his campaign and top Democrats vowed to intensify efforts to regain former supporters. About 13.2% of Michigan Democrats voted "uncommitted," exceeding expectations with over 101,000 votes, while overall turnout was high at 900,000 voters. [Dawn]
- UNEP: Municipal Waste Generation to Surge by 2050 - The United Nations Environment Programme's Global Waste Management Outlook 2024 predicts a rise in municipal solid waste generation from 2.3 billion tonnes in 2023 to 3.8 billion tonnes by 2050. The direct cost of waste management was $252 billion in 2020, but including hidden costs like pollution and health impacts raises the total to $361 billion. [Dawn]
- Bitcoin Hits $60,000, Driven by US Exchange Investments: Bitcoin surged to $60,000 for the first time in over 2 years on Wednesday, driven by increased investment in US bitcoin exchange-traded products. This sparked a 42% rally in February, its largest monthly gain since December 2020. Currently at $60,131, it's nearing its previous record just below $70,000, and it's on track for its largest week-on-week gain in a year, up 18.5% since February 21. [Dawn] [ET]
- Google Faces 2.1 Billion Euro Lawsuit: Google, faces a 2.1-billion-euro lawsuit from 32 media groups, including Axel Springer and Schibsted, alleging losses due to its digital advertising practices. The lawsuit, involving publishers from multiple European countries, coincides with increased scrutiny from antitrust regulators over Google's ad tech business. [BR]
- US-Led WTO Reform Stalled by Indian Opposition: A US-led effort to reform the WTO's dispute settlement system faced opposition from India, accusing Washington of stalling progress. Little headway is expected due to disagreements, with the system effectively halted since 2019 when the US blocked the appointment of new judges to the WTO's appeals court under former President Donald Trump. [BR] [Dawn]
- Incremental Oil Price Increase: Oil prices saw a slight increase on Wednesday despite the possibility of delays to US interest rate cuts and a larger-than-expected rise in US crude stocks, balancing the support from a potential extension to OPEC+ supply cuts. Brent crude futures rose by 14 cents to $83.79 a barrel, while US West Texas Intermediate futures (WTI) gained 6 cents, reaching $78.93. [BR]
- Conference Urges Climate Disaster Preparedness in Sindh: Experts at an international conference urged improved early warning systems and disaster preparedness for climate-change induced disasters in Sindh. The conference, organized by the University of Sindh in Jamshoro, focused on environmental degradation and socio-economic challenges in the region. [Dawn]
- Financial Closing Extension: Gwadar Project Review - The PPIB Board will extend the Financial Closing date for the Gwadar coal-fired power plant at today's meeting, with conditions, following a request from a Chinese company. It will also form an inter-ministerial Committee to review project progress and suggest ways to expedite it or find an alternative power supply for Gwadar. [BR]
