- According to PBS, total rice exported during the 5M-FY24 (Jul – Nov) period exceeded 1.7 million metric tons (MMT), with export revenue reaching $1.12 billion – both firsts in history.
- In December, high-speed diesel (HSD) demand fell by 11% due to fog disrupting transportation of heavy vehicles, and decreased further as the Rabi crop sowing season, which typically drives diesel consumption for irrigation.
- The Ministry of Finance allocated a Rs 200 billion subsidy to tackle the power sector's circular debt, which stood at Rs 2.7 trillion. This is expected to bring the remaining circular debt down to Rs 2.5 trillion by the end of December 2023.
- A domestic research house projects Pakistan's December 2023 inflation to be stubbornly high at 29.2%, surpassing the Ministry of Finance's forecast of 27.5-28.5%.
- The IHC temporarily halted the cipher case proceedings against ex-PM Imran Khan and Shah Mehmood Qureshi, citing irregularities in the in-camera trial. The ECP accepted Nawaz Sharif's nomination for the 2024 elections after a court overturned 2 graft convictions. COAS Gen. Munir pledged support for the February 8 general elections.
- Increased diesel supply in Asia in 2024, driven by new Middle East refineries and robust exports from China, is expected to outstrip regional demand growth, leading to a drop in diesel prices. This could result in Asia's refiners facing a second consecutive year of declining profit margins for diesel.
COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE
- Empowering Exporters Globally: The State Bank of Pakistan has launched the Export Facilitation Scheme (EFS), permitting the import of input goods for exports without requiring foreign exchange remittance. This initiative includes the International Toll Manufacturing (ITM) procedure, allowing foreign entities to supply input goods to local exporters to produce finished goods intended for export. [The News] [Dawn]
- GB Government Raises Subsidized Wheat Price Amid Protests: Amid protest demonstrations, the Gilgit-Baltistan (GB) government has increased the subsidized wheat price from Rs 20 to Rs 36 per kilogram. The new rate, effective from January 1, 2024, was announced through a notification by the GB food department. Initially, the government had proposed raising the subsidized wheat rate to Rs 52/kg. [Dawn]
- Pakistan's Historic Rice Boom: Record Exports in 5M-FY24 - According to PBS, total rice exported during the 5M-FY24 (Jul – Nov) period exceeded 1.7 million metric tons (MMT), with export revenue reaching $1.12 billion – both firsts in history. This is the first time that rice export earnings have exceeded a billion-dollar mark during the first 5 months of the fiscal year, raising hopes for an even more spectacular second half for the industry. [BR]
AGRI-INPUTS, WEATHER, WATER & POWER
- Rabi Season Diesel Demand Declines: In December, high-speed diesel (HSD) demand fell by 11% due to fog disrupting transportation of heavy vehicles, and decreased further as the Rabi crop sowing season, which typically drives diesel consumption for irrigation, concluded. [The News]
- January Fuel Forecast - The interim government is expected to keep petroleum prices stable in early January 2024, despite a slight global increase in Brent prices. Oil Marketing Companies predict a potential decrease of Rs 1/liter for petrol and kerosene oil, with high-speed diesel and light diesel oil prices possibly rising by Rs 2/liter. [BR]
- PCA South Unveils Rs 16B Laundering Scheme: The Directorate of Post Clearance Audit (PCA) South has exposed a trade-based money laundering scheme of over Rs 16 billion linked to solar panel imports. An investigation revealed a cartel of 12 fictitious importers connected to a suspicious company. [BR]
- Power Sector Subsidy: Tackling Rs 2.7T Debt - The Ministry of Finance has allocated a Rs 200 billion subsidy to tackle the power sector's circular debt, which stood at Rs 2.7 trillion. This move is expected to bring the remaining circular debt down to approximately Rs 2.5 trillion by the end of December 2023, with Rs 80 billion dedicated to settling the circular debt of gas companies. [The News]
- NEPRA Grants 20-Year Licenses to State Power Distributors: Nepra has granted separate supplier licenses to seven state-run power distribution companies, enabling them to serve as suppliers of last resort for 20 years. [The News]
- Pipeline Project: Crescent Steel Bags Rs 2.12B Contract - Sui Southern Gas Company Limited has awarded a Rs 2.12 billion contract to Crescent Steel and Allied Products Limited for the supply of 24-inch diameter coated steel line pipes, set to be completed in the fourth quarter of FY 2023-24. [MG]
- Pakistan Modifies CPEC Deals, Delays Quad-Nation Gas Pipeline Decision: Pakistan approved amendments to energy deals with Chinese power plants under CPEC, eliminating arbitrary penalties for non-supply of electricity due to fuel unavailability. The decision to include a quad-nation gas pipeline project was deferred. [ET]
- Kotri Barrage: No Immediate Threat, Further Study Recommended - A committee of senior irrigation officers, led by Sindh Irrigation and Drainage Authority's managing director Pritam Das, has ruled out a significant threat to the Kotri Barrage structure despite reports of a 'pit' in the riverbed. The committee recommended a detailed numerical hydraulic and physical model study for further assessment. [Dawn]
AGRI UPDATES & PAKISTAN POLICY
- Pakistan's December 2023 Inflation: Projected at 29.2%, Exceeding Forecast - A domestic research house projects Pakistan's December 2023 inflation to be stubbornly high at 29.2%, surpassing the Ministry of Finance's forecast of 27.5-28.5%. The elevated inflation is attributed to a higher housing index and electricity prices. [ET]
- Week Ending Dec 22: SBP's Forex Reserves Up by $853M - The State Bank of Pakistan's foreign exchange reserves increased by $853 million to reach $7.757 billion during the week ending December 22. The surge was attributed to official Government of Pakistan inflows. [Dawn]
- Government's Q1 2024 Borrowing Plan: Rs 3.88 Trillion Target - The government announced plans to borrow Rs 3.88 trillion from banks in Q1 2024 through treasury bills and conventional bonds to address the budget deficit. The central bank's auction calendar indicates Rs 2.250 trillion will be raised via long-term paper auctions and Rs 1.630 trillion through market treasury bill auctions from commercial banks. [The News]
- KSE-100 Surpasses 62,000 Points Amid Bullish Sentiments: Bullish sentiments continued in the stock market, driving the KSE-100 index above the 62,000-point level for the second consecutive session on Thursday. [Dawn]
- Nawaz Sharif's Nomination Accepted for 2024 Elections: The Election Commission of Pakistan accepted Nawaz Sharif's nomination for the 2024 elections after a court overturned two graft convictions. However, Sharif still needs the removal of a life ban on holding public office, with a hearing scheduled for January. [BR]
- IHC Temporarily Halts Cipher Case Against Imran Khan & Qureshi: The Islamabad High Court has temporarily halted the cipher case proceedings against ex-Prime Minister Imran Khan and Shah Mehmood Qureshi, citing irregularities in the in-camera trial. Justice Miangul Hassan Aurangzeb issued a stay order until January 11. [Dawn]
- Pakistan Army Supports February 8 Elections: During a two-day-long Corps Commanders' Conference, the Pakistan Army, led by COAS General Asim Munir, pledged support for the February 8 general elections. [BR]
INTERNATIONAL – OVERVIEW & MARKET OUTLOOK
- Israeli Genocide: Israeli tanks advanced deep into a central Gaza town, and an airstrike in Rafah resulted in at least 20 deaths and 55 injuries. Images posted by a Palestinian journalist showed tanks near a mosque in Bureij, and the UN rights chief decried the 'dehumanization' of Palestinians in their own land. [Dawn] [ET] [Reuters] [NY Post] [CNBC] [AN] [TRT World] [UN]
- New Refineries, China Exports: Impact on Diesel Prices - Increased diesel supply in Asia in 2024, driven by new Middle East refineries and robust exports from China, is expected to outstrip regional demand growth, leading to a drop in diesel prices. This could result in Asia's refiners facing a second consecutive year of declining profit margins for diesel, following the record-high margins of $45 a barrel in 2022 due to supply disruptions and low global inventories. [BR] [Reuters] [India Times] [PRN] [The Progress] [Yahoo]
- Suez Canal Bypassed Amid Red Sea Attacks: Suppliers for major retailers like IKEA, Home Depot, and Amazon are rerouting cargo away from the Suez Canal due to attacks in the Red Sea, addressing the largest shipping disruption since the COVID-19 pandemic. [Dawn] [Reuters] [SC] [SCD] [AF] [Cargo Insights]
- Mexico-U.S. Border Crossings to Remain Open After Talks: Mexican President Andres Manuel Lopez Obrador has announced an agreement with the United States to keep border crossings open after temporary closures due to increased crossings. The announcement follows direct talks between high ranking officials from both sides to address migration challenges. [ET] [Al Jazeera] [Reuters] [France 24] [Barron’s] [DW] [FP]
- Asian Rice Prices Soar: Thailand Hits 15-Year Highs at $655-$660/MT - Asian rice prices surged as supply constraints drove Thailand's 5% broken rice to over fifteen-year highs at $655-$660 per metric ton, the highest since October 2008. This marks Thailand's largest annual gain of around 41%, according to LSEG data, while India's parboiled rice also reached a two-month peak. [BR] [ST] [Nasdaq] [CNBC] [Nikkei] [XM]
- PIA's Appeals for Rs 15 Billion - Pakistan International Airlines has urgently requested relaxation from the State Bank of Pakistan to secure Rs 15 billion in loans from commercial banks, issuing an SOS (Save Our Soul). The Civil Aviation Authority (CAA) has provided a Rs 5 billion facility to prevent a halt in PIA operations, addressing immediate risks of potential suspension. [The News]
- Gul Ahmed Group: Textile Trader to Manufacturing Giant Since 1900s - Gul Ahmed Group, initially a textile trader since the 1900s, transitioned into manufacturing in 1953 as Gul Ahmed Textile Mills (PSX: GATM), later becoming a public limited entity in 1955. GATM is a composite textile mill engaged in manufacturing and retail, operating over 40 stores across Pakistan. It is a subsidiary of Gul Ahmed Holdings (Private) Limited. [BR]
- Opinion: U.S. Spending on Clean Energy & Tech Spurs Allies to Compete - “The United States has embarked on the biggest industrial policy push in generations, dangling tax breaks, grants and other financial incentives to attract new factories making solar panels, semiconductors and electric vehicles. Other governments, particularly in Europe, are trying to counter the Biden administration’s industrial policies with their own incentives.” - By Ana Swanson, Jeanna Smialek, Alan Rappeport & Eshe Nelson [NYT]
