Sesame Exports, Sindh Cyclone Threat, POL Price Down, PIA Sale, Pak Trade Deficit, China Energy Source.

TOPLINE

• A delegation of 23 Pakistani sesame exporters visited China from August 18-24 to strengthen trade relations in the sesame sector, culminating in a Pakistan-China B2B Sesame Conference in Beijing. This visit comes after Pakistan exported around $423 million worth of sesame last fiscal year.
• The Met Office has warned of a deep depression near the Sindh coast that could develop into a cyclonic storm, bringing severe weather including heavy rain, thunderstorms, and rough sea conditions to Sindh, including Karachi. The storm is expected to move west towards Oman, with winds of 50-60 km/h and heavy rainfall possible until August 31.
• Starting September 1, 2024, petrol will be Rs 257.86, high-speed diesel Rs 263.57, kerosene oil Rs 170.38, and light diesel oil Rs 155.06.
• By October 2024, the federal government will offer 75% of PIACL shares for sale, with bidders required to invest $500 million over three years. The Privatisation Commission reported Rs 4,389 million in sales but incurred Rs 1,992 million in expenses in the past five years.
• In the first month of the new fiscal year, Pakistan's trade deficit with nine neighboring countries surged by 68.72% to $1.041 billion, driven by increased imports from China and India. This rise mirrors last year's trend, raising concerns for policymakers, with the FY24 trade deficit reaching $9.506 billion, a 49% increase.
• China now derives 25% of its energy from non-carbon sources, up from 15.5% a decade ago, as part of its shift towards greener energy. The country aims to peak carbon emissions by 2030 and reach net zero by 2060.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Pakistani Sesame Exporters Visit China: A delegation of 23 Pakistani sesame exporters visited China from August 18-24 to strengthen trade relations in the sesame sector, culminating in a Pakistan-China B2B Sesame Conference in Beijing. Sponsored by the Trade Development Authority of Pakistan (TDAP), this visit comes after Pakistan exported around $423 million worth of sesame last fiscal year, with China as the major market. [BR]
• Cotton Prices Up, Trading Volume Low: The local cotton market remained bullish with low trading volume. Cotton prices range from Rs 18,800-Rs 19,200/maund across regions, while Phutti prices are between Rs 7,200-Rs 9,200/40 kg. The Spot Rate Committee of the Karachi Cotton Association raised the spot rate by Rs 200-Rs 18,700/maund, and polyester fiber is priced at Rs 360/kg. [BR]
• Policymakers Ease Sugar Export Conditions: After a slow start in sugar exports in July 2024, policymakers are repeating past mistakes by easing export conditions, following recommendations from the Sugar Advisory Board. Extending and increasing sugar export quotas during the off-season is likely to drive up local prices, undermining the government's goal of maintaining domestic price stability. [BR]

ENERGY - WEATHER, WATER & POWER

• Storm Warning Issued for Sindh: The Met Office has warned of a deep depression near the Sindh coast that could develop into a cyclonic storm, bringing severe weather including heavy rain, thunderstorms, and rough sea conditions to Sindh, including Karachi. The storm is expected to move west towards Oman, with winds of 50-60 km/h and heavy rainfall possible until August 31. Coastal areas are preparing for severe weather. [BR] [Dawn] [Dawn]
• Hyderabad Rainfall - 100mm, Damage, & Response: The Sindh Chief Minister reported over 100mm of rain in Hyderabad, praised Wapda for power reliability, and mentioned one death, five injuries, and three damaged houses. A new drainage project from Autobhan to Tando Yousaf is underway, and generators are available for power outages. [BR] [ET]
• Moody's Upgrades WAPDA Ratings: Moody's upgraded WAPDA's corporate family rating to Caa2 and its Baseline Credit Assessment to caa2, with the outlook revised to positive. This upgrade reflects WAPDA's close credit linkage with the government of Pakistan, which was also recently upgraded, due to the government's full ownership and oversight of the company. [BR]
• Nepra Considers K-Electric FCA Adjustment: Nepra announced that the impact of the Fuel Charges Adjustment (FCA) on K-Electric will balance out once its tariff is finalized. During a public hearing, K-Electric requested a Rs 3.09/unit adjustment to recover Rs 6.206 billion for July 2024, and Nepra did not contest this amount, suggesting approval after data verification. [BR] [ET]
• Fuel Prices Decrease from September 1: Starting September 1, 2024, petrol will be Rs 257.86, high-speed diesel Rs 263.57, kerosene oil Rs 170.38, and light diesel oil Rs 155.06. The changes include a Rs 3.10/liter decrease for petrol, Rs 2.50 for high-speed diesel, Rs 1.39 for kerosene oil, and Rs 1.96 for light diesel oil. [BR]
• Oil Industry Urges Ban on Illegal Solvent Imports: The oil industry has urged the government to ban illegal imports of Light Aliphatic Hydrocarbon Solvent, used in petrol adulteration, which damages engines. Tariq Wazir Ali reported that 900 tankers of the solvent were seized and later released with penalties, causing significant price discrepancies and industry issues. [Dawn]
• Government to Sell PIACL Shares: By October 2024, the federal government will offer 75% of PIACL shares for sale, with bidders required to invest $500 million over three years. The Privatization Commission reported Rs 4,389 million in sales but incurred Rs 1,992 million in expenses in the past five years. [BR]
• ECC Approves Exemptions, Incentives: The ECC approved exemptions from procurement rules for highway agreements with China and South Korea and barred foreign-funded projects that lack self-sufficient revenue for debt servicing. It also approved incentives for banks and forex companies to increase home remittances through official channels. [Dawn] [ET]
• Two Parties Serious About PIA Acquisition: The government revealed that only two out of six parties interested in acquiring Pakistan International Airlines (PIA) are showing serious intent. The Privatization Commission noted that these parties have requested additional time for due diligence and financial modeling, despite the extended deadline of October 1st. [ET]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• Punjab & Islamabad Get Electricity Relief: After reducing electricity prices by Rs 14/unit for Punjab for August and September, the Punjab cabinet has approved a similar relief for Islamabad’s consumers. Chief Minister Maryam Nawaz also announced a solar panel program and the approval of Punjab's first climate-resilient Vision and Action Plan, 2024. [BR]
• Minister Urges Fast-Track Privatization: Federal Minister Abdul Aleem Khan emphasized the need to expedite the privatization of loss-making state-owned entities, citing its positive impact on the economy and Moody’s rating as evidence. He presided over the 223rd Privatization Commission Board meeting, discussing the privatization of PIA and Roosevelt Hotel among other issues. [BR]
• Trade Deficit Soars 68.72%: In the first month of the new fiscal year, Pakistan's trade deficit with nine neighboring countries surged by 68.72% to $1.041 billion, driven by increased imports from China and India. This rise mirrors last year's trend, raising concerns for policymakers, with the FY24 trade deficit reaching $9.506 billion, a 49% increase from the previous year. [Dawn]
• Pakistan Invites SCO Leaders to Islamabad: Pakistan has invited all heads of government from Shanghai Cooperation Organisation (SCO) member states, including Indian Prime Minister Narendra Modi, to the Council of Heads of Government meeting in Islamabad on October 15-16, 2024. The Foreign Office confirmed that formal invitations have been sent to all SCO member states. [BR]
• Federal Minimum Wage Raised to Rs 37,000: The federal government has increased the minimum wage for its employees by 15.6%, raising it from Rs 32,000-Rs 37,000/month, effective July 1, 2024. This increase applies to civil employees, contingent staff, and contract workers, with a special allowance provided to those whose gross salary falls below Rs 37,000. [Dawn]
• Bilawal Inaugurates Solar Systems for BISP Families: PPP Chairman Bilawal Bhutto Zardari inaugurated the first phase of distributing free solar home systems to 200,000 Benazir Income Support Program families in two districts. At the event, he highlighted his party's commitment to sustainable solutions and expressed hope to expand such projects nationwide if given federal governance. [BR] [Dawn]
• CM Shah Announces Green Energy Projects: Chief Minister Syed Murad Ali Shah announced ongoing green energy initiatives aimed at socio-economic development, including the use of Thar coal and completed projects like a wind corridor in Jhampir producing 1,845 MW. He highlighted that 40 public buildings, mainly hospitals, have been equipped with 26 MW of solar panels, and 352 rural health centers have received 3KW solar systems. [Dawn]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• 1MDB Advances $394M Claim Against BSI: 1MDB has been cleared to proceed with its $394 million legal claim against Swiss bank BSI for financial losses from unauthorized fund transfers and money laundering. The High Court in Singapore rejected BSI's attempt to dismiss the case, allowing 1MDB's claim to move forward. [BR]
• Gujarat Monsoon Rains Kill 28, Prompt Evacuations: Intense monsoon rains in Gujarat, India, have killed at least 28 people in three days, with some drowning and others struck by falling trees. Rivers have overflowed, prompting over 30,000 evacuations, and the state government reports continued heavy rain and significant flooding, submerging roads and vehicles. [Dawn]
• Xi Jinping Assures US of Continued Good Relations: Chinese President Xi Jinping assured top White House aide Jake Sullivan that Beijing remains committed to maintaining good relations with the US despite ongoing global changes. Sullivan, the first US national security adviser to visit China since 2016, met with Xi and other officials amid tensions between China and US allies Japan and the Philippines. [Dawn]
• China’s Green Energy Share Rises to 25%: China now derives 25% of its energy from non-carbon sources, up from 15.5% a decade ago, as part of its shift towards greener energy. The country aims to peak carbon emissions by 2030 and reach net zero by 2060, with its wind and solar power capacities increasing elevenfold over the past ten years. [Dawn]
• Typhoon Shanshan Hits Kyushu, Causes Injuries: Typhoon Shanshan, one of Japan's strongest in decades, struck Kyushu with gusts up to 252 km/h, causing at least 80 injuries and one person missing. The storm, now weakened with gusts of 162 km/h, continues to bring heavy rain and warnings of flooding and landslides as it moves toward Honshu. [Dawn]
• Oil Prices Rise on Supply Disruptions: Oil prices increased by over a dollar a barrel on Thursday due to supply disruptions in Libya and planned output cuts in Iraq. US West Texas Intermediate crude rose by $1.35 to $75.85 per barrel, while Brent crude increased by $1.07 to $79.72 per barrel. [BR]

OPINION(S) & REMAINDERS

• Fauji Foundation Seeks Agha Steel Control: Fauji Foundation plans to acquire shares and control of Agha Steel Industries Limited, with Integrated Equities Limited (IEL) managing the offer. Agha Steel Industries has confirmed receiving this intention and has notified its Board of Directors. [BR]
• TTP Releases Videos of Kidnapped Men: The TTP has released videos of two of three men, including a senior army officer, kidnapped from a mosque in D.I. Khan. The victims, who were mourning their father, are shown in the videos with gunmen and appear to be far from government-controlled areas. [Dawn]
• Bolan Bridge Attack Costs Rs 400 Million: Pakistan Railways is set to face a loss exceeding Rs 400 million due to the destruction of a historic bridge in Bolan by terrorists. The attack, which severed key train connections between Quetta and other regions, has disrupted services and damaged infrastructure built during the British era. [ET]
• Punjab Begins Privatizing Public Schools: The Punjab government has started the privatization of 13,000 public schools as part of a Public-Private Partnership (PPP) model to improve education quality and accessibility. The first phase involves transferring 5,863 schools to private entities, with 4,000 schools each to be transferred in the second and third phases. [Dawn]
• Opinion: Islamic Environmentalism - “IT is no secret that Pakistan faces an existential climate change crisis. Currently ranked fifth in the Global Climate Risk Index, we are at severe risk of exposure to extreme temperatures and climate-related disasters. The destructive floods of 2022 — which affected 33 million people and caused economic losses amounting to more than $15 billion — serve as a warning of what the future might hold.” - By Muhammad Hayat Lak & Muhammad Mohad Zulfiqar [Dawn]
• Opinion: From Waste to Wonder - Addressing Global Food Crisis - “The Food Waste Index Report 2024 by the United Nations Environment Programme (UNEP) reveals a sobering truth: 1.05 billion tonnes of food were wasted last year alone. That's 19% of all food produced globally - enough to feed billions. The injustice of food waste is a moral and humanitarian crisis, underscored by the stark reality that every day, thousands of people die of starvation. The question we must ask ourselves is: how can we allow this to continue?” - By Majid Burfat [ET]