SILF Army investment, Basmati exports, Govt spending & borrowing, FDI, Digitizing Mauzas, Chashma 5 N-plant, Chinese Rate Cut, Glaciers Melting Pace

TOPLINE

• The government (with the backing of the army) revealed an ‘Economic Revival Plan’ with the formation of the ‘Special Investment Facilitation Council’ (SILF) to help investors through a single window. The sectors of defense production, agriculture/livestock, minerals/mining, IT and energy were identified.
• Rs 19.1 billion was the export value of Basmati in May 2023, up 62.8% compared to Rs 11.7 billion in May 2022
• The government lists expenses of Rs 41.3 trillion at the National Assembly, with Rs 40.6 trillion sough for the repayment of loans. The government has borrowed $8.613 billion from multiple financing sources in the first 11 months of the fiscal year. The yield on a 10-year bond maturing in April 2023 spikes to a record 119.5%.
• Foreign Direct Investment (FDI) in the country plunged by 21% during the first eleven months of this fiscal year.?
• In collaboration with the World Bank, the government is set to digitize the land record of as many as 1,706 urban mauzas of Punjab for ease of land sales and transfers.??
• Pakistan and China signed a $4.8 billion deal on Tuesday to build a 1,200-megawatt nuclear power plant with the work on Chashma 5 project beginning immediately.
• World oil prices slump 2% and the dollar wavered against rival currencies as China’s smaller-than-forecast interest rate cut failed to dispel worries over its flagging powerhouse economy.?
• Himalayan Glaciers are melting 65% faster than in the last decade as the world is 1.2 degrees Celsius warmer than in the mid-1800s.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

• Basmati Exports: Rs 19.1 billion was the export value of Basmati in May 2023, up 62.8% compared to Rs 11.7 billion in May 2022, according to PBS. [ET]
• Local Cotton Market: The local cotton market on Tuesday remained bearish and the trading volume remained satisfactory. Cotton Analyst Naseem Usman told Business Recorder that the rate of new crop of cotton in Sindh is in between Rs 18,800 to Rs 19,500 per maund. The rate of Phutti in Sindh is in between Rs 8,000 to Rs 9,000 per 40 kg. The rate of cotton in Punjab is in between Rs 20,000 to Rs 20,200 per maund and the rate of Phutti is in between Rs 8,500 to Rs 9,500 per 40 kg. The Spot Rate remained unchanged at Rs 19,600 per maund. Polyester Fiber was available at Rs 355 per kg. [BR]
• Beef Export to China: The export of Pakistani beef to China is expected to reach $302 million this year with a quantity of 69,072 tons and Pakistan could benefit from the access granted by the General Administration of Customs (GACC) of China. [ET]
• RCET for Export Sectors: The Karachi Chamber of Commerce & Industry (KCCI), stressed the need to continue Regional Competitive Energy Tariff (RCET) for five export sectors by providing them a level playing field to compete with the regional competitors. [BR]

AGRI-INPUTS, WEATHER, WATER & POWER

• KPK Heatwave Warning: PDMA in KPK issued alerts about an intense heatwave across the province with temperatures set to rise by another four to six-degree centigrade which could trigger flash floods in Upper and Lower Chitral, Kohistan, Upper and Lower Dir, and Swat as a result of snow and glacier melting. [ET]
• Winter Gas Issues: First attempt to buy LNG from the spot market this year fell through as no bids received. Power, gas outages may increase if the situation persists. [Dawn]?
• Electricity Costs: With electricity costs continuing to rise, ex-Wapda Discos have sought clearance to extract Rs 30 billion more from their consumers amid heat waves in the country. [Dawn]
• Pak-China N-power plant: Pakistan and China signed a $4.8 billion deal on Tuesday to build a 1,200-megawatt nuclear power plant with the work on Chashma 5 project beginning immediately. [BR] [ET]
• Sale of Ports to UAE: Moving at a break-neck speed, the government on Tuesday requested the federal cabinet to approve a draft framework agreement with UAE’s Abu Dhabi Ports (ADP) on a G2G basis for the transfer of port assets. [Dawn] [ET]
• Machinery Import: Rs. 10.9 billion was the import value of power-generating machinery in May 2023, down 51% from Rs 22.5 billion in May 2022. [ET]
• Post-Flood Relief: In an attempt to placate PPP, PM Shehbaz committed Rs 25 billion for flood victims in Sindh. [Dawn]
• Punjab Mauza Digitization: In collaboration with the World Bank, the government is set to digitize the land record of as many as 1,706 urban mauzas of Punjab to bring about transparency in the sale and purchase of land. [Dawn]
• Power Generation: Power generation decreased by 10% YoY to 115,876 GWh (14,412MW) compared to 129,317 GWh (16,084MW) during the first eleven months of the current fiscal year, data showed. [The News] [ET]
• Oil & Gas Blocks: The government awarded 3 oil and gas blocks, with 15 remaining unclaimed after no interest was shown by foreign investors. [The News]

AGRI UPDATES & PAKISTAN POLICY

• Army Economic Plan: The government (with the backing of the army) revealed an ‘Economic Revival Plan’ with the formation of the ‘Special Investment Facilitation Council’ (SILF) to help investors through a single window. The sectors of defense production, agriculture/livestock, minerals/mining, IT and energy were identified. [BR] [Dawn] [ET]
• Govt Expenditure: The government lists expenses of Rs 41.3 trillion at the National Assembly, with Rs 40.6 trillion sough for the repayment of loans. Debt servicing is 48% higher than the original budget approved last year. [ET]
• Chinese Economic Assistance: Prime Minister Sharif has said that China renewed Pakistan’s commercial and sovereign loans in recent times. Speaking after witnessing the memorandum of understanding (MoU) signing ceremony of the $4.8 Billion 1,200 MW nuclear energy power project C-5. [BR]
• FDI Falls 21%: Foreign Direct Investment (FDI) in the country plunged by 21% during the first eleven months of this fiscal year (FY23). The State Bank of Pakistan (SBP) reported on Tuesday that Pakistan fetched FDI amounted to $1.32 billion during July-May of FY23 as against $1.66 billion in the same period of last fiscal year (FY22), depicting a decline of $345 million. [BR] [Dawn]
• Government Borrowing: The government has borrowed $8.613 billion from multiple financing sources including $900 million from foreign commercial banks during the first 11 months (July-May) of 2022-23 compared to $13.539 billion borrowed during the same period of last fiscal year, showing a decline of around 36%. [BR]
• Default Risk: Yield on a 10-year bond maturing in April 2023 spikes to record 119.5%, indicating an increased risk of default on foreign debt repayment amidst a persistent deadlock in reviving the IMF loan program, set to end on June 30. The yield on the 10-year bond maturing in April 2024 spiked by 2.9 percentage points to 119.5%. [ET]
• PTI Arrest Warrants: While bail pleas were dismissed for Shah Mehmood and Asad Umad, non-bailable warrants were given for Imran Khan and other PTI leaders in May 9 attack cases by an anti-terrorism court. [ET] [Dawn]?

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

• Himalayan Glaciers Melt: Himalayan Glaciers are melting 65% faster than the last decade as the world is 1.2 degrees Celsius warmer than the mid-1800s, according to a report by the ICIMOD. [Dawn] [ET] [Reuters] [Al Jazeera]
• Chinese Farmland Purchase Block: A growing number of US states are considering or have passed measures this legislative term to ban “foreign adversaries” and foreign entities – specifically China – from buying farmland. Proponents of the laws, mostly Republicans but some Democrats as well, have frequently cited concerns about food security and the need to protect military bases and other sensitive installations. [CNN]
• China Interest Rates: World oil prices slump and the dollar wavers against rival currencies as China’s smaller-than-forecast interest rate cut failed to dispel worries over its flagging powerhouse economy. Oil futures fell about 2 percent in choppy trading on Tuesday on forecasts for slower growth of oil demand in China, the world’s second-biggest oil consumer, and disappointment with the size of cuts in China’s key lending rates. [Dawn] [VOA] [Reuters] [BR]
• Russia-Ukraine War: Russian forces launched a major drone assault on Kyiv overnight (the first in 18 days on the Ukrainian capital) and also attacked several other regions, with no casualties reported. [Dawn]

PAKISTAN - REMAINDERS

• Population Control: Pakistan must realize that family planning is a national security issue. Climate experts have warned the country of very tough weather conditions going forward. Saving the world’s fifth-largest population from hostile weather conditions and climate-induced disasters will be the biggest challenge for the resource-constrained nation. Failure to do so will inevitably result in disaster, jeopardizing thousands, if not millions, of people and putting further strain on the cash-strapped economy. [Dawn]
• KPK Salary Boost: KPK employees get a 35% salary boost and civil servants above grade 16 receive a 30% increment as pensions rise by 17.5%. Travel allowance has also been raised by 50%. [ET]
• Professionals Exodus: 832,339 Pakistanis obtained employment abroad in 2022, up 189% from a year ago. The number of emigrating Pakistani hit 315,787 in the first five months of 2023. [Dawn]
• Opinion - Boats of Doom: “Pakistan reporting on the boat diaster have emphasised how the Pakistanis on the boat were treated worse than the other passengers.” - Rafia Zakaria [Dawn]

Opinion - Dealing with natural and man-made catastrophes: “Pakistan is one of the most ill-prepared countries to deal with emergencies and that further aggravates the suffering of its people. Riverine floods in the Indus River Basin, flash flooding, storms and glaciers melting affect Pakistan frequently. Earthquakes of high intensity and landslides are a common feature. Human-induced or natural forest fires affecting the lives and livelihood of people, besides destroying the ecology, are on the rise.” - Talat Masood [ET]