Sugar Exports, Urea Import Dues, Pakistan Power Generation, Non-Filler Restrictions, Foreign Profit Repatriation, Global Coal Consumption.

TOPLINE

• Rs 24.6 billion was the value of sugar exported in Nov 2024, up 100% compared to no exports in Nov 2023.
• The Economic Coordination Committee approved the restructuring plan for Pakistan Revenue Automation Limited (PRAL) and allocated Rs 10 billion to the Commerce Ministry for settling outstanding dues related to imported urea subsidies.
• Pakistan's power generation increased by 6.4% YoY to 8,032 GWh in November 2024 but declined 21.7% MoM from October's 10,262 GWh, according to NEPRA. In 5MFY25, total generation fell 17.1% YoY to 50,808 GWh, with Hydel leading at 36.9%, followed by Coal (18.6%) and RLNG (17.9%).
• The government introduced the "Tax Laws (Amendment) Bill, 2024”, aiming to tighten restrictions on non-filers and boost financial resources. Key measures include banning non-filers from purchasing vehicles over 800cc, acquiring high-value properties, and making large stock purchases.
• Foreign investors repatriated $1.129 billion in profits and dividends during the first five months of FY25, a 112% increase from $523 million in the same period of FY24. The rise was primarily driven by a 118% increase in returns on Foreign Direct Investment (FDI), which amounted to $1.074 billion.
• Global coal consumption is set to reach a record high of 8.77 billion tonnes in 2024, driven by strong demand in Asia, particularly China. Despite a decline in coal use in the US and Europe, China's demand will be nearly a third higher than the rest of the world. This surge occurs while coal's share of the global power mix drops to 35%.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Sugar Exports Double to Rs 24.6 Billion: Rs 24.6 billion was the value of sugar exported in Nov 2024, up 100% compared to no exports in Nov 2023, according to the PBS. [ET]
• Paper Imports Drop 14% to Rs 8.75 Billion: Rs 8.75 billion was the value of paper and paper board imported in Nov 2024, down 14% from imports with Rs 10.2 billion last year, according to the PBS. [ET]
• Pakistan Cotton Production Drops 33%: Pakistan's cotton production has sharply declined, with total output as of December 15, 2024, recorded at 5,367,334 bales, down 33.11% from 8,023,707 bales in 2023. Punjab, the primary cotton-growing region, saw a 34.44% drop, producing 2,593,949 bales compared to 3,956,880 bales in 2023. Sindh's production decreased by 31.80%, from 4,066,827 bales to 2,773,385 bales. Balochistan's production stood at 156,400 bales. This significant drop poses a severe challenge to Pakistan's cotton sector. [BR] [Dawn]
• Gold Prices Rise in Pakistan: Gold prices in Pakistan increased on Wednesday, following a rise in international rates. The price of gold/tola reached Rs 275,900, up by Rs 1,000, as per the All-Pakistan Gems and Jewellers Sarafa Association. This follows a Rs 2,100 decline in the local market on Tuesday. Internationally, gold prices rose to $2,647/ounce, up by $10. [ET]
• ECC Approves PRAL Restructuring & Urea Subsidy: The Economic Coordination Committee (ECC) approved the restructuring plan for Pakistan Revenue Automation Limited (PRAL) and allocated Rs 10 billion to the Commerce Ministry for settling outstanding dues related to imported urea subsidies. The decision aims to ease financial strain and ensure timely availability of urea for agricultural needs, with provinces directed to fulfill their share of subsidy payments. [BR]
• DALFA Cattle Show Highlights Partnerships: The DALFA Cattle Show, set for January 17-19 at the Expo Centre, will feature 200+ exhibitors, including 30 from Africa. [BR]
• SLIC, FFC Launch Micro-Insurance for Farmers: The State Life Insurance Corporation of Pakistan (SLIC) and Fauji Fertiliser Company (FFC) launched a micro-insurance program to provide financial protection to Pakistan’s farmers and support sustainable agricultural growth. The event was attended by key figures, including Lt Gen Anwar Ali Hyder (retd), Chairman of FFC, Shoaib Javed Hussain, CEO of SLIC, and Jahangir Piracha, MD and CEO of FFC. [BR] [Dawn]
• TIKA Launches Agricultural Projects in AJK: Two agricultural projects were launched in Azad Jammu and Kashmir with support from TIKA: an olive facilitation center and a mushroom cultivation laboratory. The projects, costing Rs 22 million and Rs 18 million, were inaugurated by AJK's Agriculture Minister and TIKA's Head of Department. [Dawn]
• Strike in Thatta Protests Canal Project on Indus River: A shutter-down strike was held in Thatta today in protest against the federal government's plan to build more canals on the Indus River. Sindh Taraqi-Pasand Party leaders warned that the project would worsen water shortages and harm the province, demanding that the plan be abandoned. [ET]

ENERGY - WEATHER, WATER & POWER

• Govt Urges Provinces to Enforce Full Petroleum Price Cuts: The federal government has instructed provincial administrations to take action against petroleum dealers who haven't passed on the full benefits of price reductions to consumers. Despite several price cuts, consumers have not seen the complete impact due to poor administrative control at the provincial level. The issue was discussed in a recent meeting of the National Price Monitoring Committee. [ET]
• PPRA Defers PNSC Procurement: The PPRA declined to provide a final opinion on PNSC's procurement of two used vessels, citing no restrictions on second-hand vessel purchases in 2010. The PPRA Board was tasked by the PM Office to verify the minutes of a 2010 tripartite meeting, allowing PNSC to act under Rule 42 of the Public Procurement Rules, 2004. [BR]
• Power Generation Rises YoY: Pakistan's power generation increased by 6.4% YoY to 8,032 GWh in November 2024 but declined 21.7% MoM from October's 10,262 GWh, according to NEPRA. In 5MFY25, total generation fell 17.1% YoY to 50,808 GWh, with Hydel leading at 36.9%, followed by Coal (18.6%) and RLNG (17.9%). [MG]
• GTR Signs JV MoU with SHRC: Ghandhara Tyre and Rubber Company (GTR) has signed an MoU with Shandong Huasheng Rubber Co. (SHRC) to explore a Joint Venture in Pakistan for manufacturing and selling Truck Bus Radial (TBR) and Passenger Car Radial (PCR) tyres. SHRC, based in China, has a global production capacity of 30 million PCR units and 9 million TBR units, with a business volume of USD 1.5 billion in 2023. [BR]
• Customs Seizes 39,000 Liters of Smuggled Diesel: The Collectorate of Customs Enforcement Karachi successfully intercepted a major smuggling attempt in the Arabian Sea, seizing three launches carrying 39,000 liters of Iranian diesel. The operation, led by Moeen ud Din Wani, resulted in the confiscation of the diesel and boats—Al-Sadaf, Al-Rahman, and Al-Shairan—with an estimated value of Rs 39 million. [BR]
• KPT to Award Dredging Contract to CHEC: Karachi Port Trust (KPT) plans to award a dredging contract to China Harbour Engineering Company (CHEC), despite the company's initial disqualification for using underpowered equipment. CHEC's bid for dredging 4 million cubic meters to maintain the navigation channel was deemed non-compliant with the required capacity and timeline standards. [Dawn]
• Karachi Cold Wave to Last 10 Days, Temperatures Drop Further: Karachi's cold wave is expected to last for another 10 days, with temperatures possibly dropping to single digits in the next three days. The cold spell, driven by winds from Balochistan, has already led to a minimum temperature of 13°C in Karachi. The Pakistan Meteorological Department (PMD) predicts intensified cold in Tharparkar and Umarkot. Sea breezes are inactive, and a change in wind direction will impact weather across Sindh. [ET]
• Opinion: Pakistan, India & Growing Water Disputes - “Water crisis, intensified by the growing climate crisis, has become a major global issue. More than 2 billion people lack access to safe drinking water across the planet. Rapidly accelerating water crisis grips all major parts of the world including South Asia where glacier mass is shrinking, causing declining flow of rivers. Both India and Pakistan are facing a huge challenge of water shortage for the purpose of drinking as well as food production which is at risk of failure within the next few decades. The water system in these countries is already under unprecedented stress due to climate change.” - By Dr Shuja Ahmed Mahesar [ET]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• Tax Bill Targets Non-Filers: The government introduced the "Tax Laws (Amendment) Bill, 2024" in the National Assembly, aiming to tighten restrictions on non-filers and boost financial resources. Key measures include banning non-filers from purchasing vehicles over 800cc, acquiring high-value properties, and making large stock purchases. [BR] [Dawn]
• Tax Bill Introduces FBR Data Sharing: Under the Tax Laws (Amendment) Bill 2024, the FBR will share income tax return data with banks to cross-check against their banking records. The bill introduces the concept of "eligible" and "ineligible persons," with non-filers facing restrictions on major financial transactions, including vehicle purchases, property dealings, stock sales, and access to bank accounts. [BR]
• Foreign Investment Repatriation Soars 112% in FY25: Foreign investors repatriated $1.129 billion in profits and dividends during the first five months of FY25, up 112% from the previous year. This increase was mainly due to a 118% rise in Foreign Direct Investment returns, totaling $1.074 billion. The rise followed the easing of restrictions on outflows, as foreign exchange reserves exceeded $12 billion and are expected to reach $13 billion by FY25’s end. The IMF had criticized the restrictions in FY24. [BR] [Dawn]
• SBP Raises Rs 382 Billion via PIBs: The State Bank of Pakistan raised Rs 382 billion through the sale of Pakistan Investment Bonds (PIBs) in its latest auction, surpassing the target of Rs 350 billion. The cut-off yields ranged from 12.50% to 12.80%, with the SBP accepting Rs 381.83 billion from total bids of Rs 824.35 billion, including Rs 40.07 billion from non-competitive bids. [MG]
• Bank Deposit Rates Rise Sharply: In November 2024, the return on bank deposits increased by 72 bps to 10.82%, up 337 bps from the previous year, while the lending rate rose to 19.87%, reflecting a 453 bps monthly increase. Despite a 19.1% rise in the total deposit stock to Rs 30.6 trillion, the real deposit rate, after adjusting for inflation, remained negative at -3.85%, highlighting a continued loss for depositors amid high inflation. [MG]
• No Timeline for Internet Restoration: The government official informed the National Assembly that there was no timeline for the full restoration of internet services, citing security measures mandated by the interior ministry. Parliamentary secretary Sajid Mehdi explained that slow internet speeds were due to these security precautions, and neither the PTA nor the cabinet division could provide a timeframe, as the interior ministry controls the situation. [Dawn]
• Pakistan Reports $944 Million Current Account Surplus: The government reported a $944 million current account surplus, driven by higher remittances, tech exports, and Roshan Digital Accounts. Finance Minister Aurangzeb highlighted lower inflation and increased sales in sectors like cement and automobiles. The Economic Coordination Committee approved Rs 44 billion in supplementary grants, including for advertising these achievements. [Dawn]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• Israeli Genocide: The United States, with Arab mediators, is working to finalize a ceasefire agreement between Israel and Hamas in the Gaza Strip. Despite ongoing Israeli airstrikes that have killed 38 Palestinians overnight, bringing the total death toll to 45,097 in the last 14 months, the mediators are close to resolving most issues in the agreement. The deal is expected to include a ceasefire and a prisoner swap between Israel and Hamas. [Dawn] [ET]
• First Flight from Damascus to Aleppo Marks Post-Assad Era: The first flight from Damascus to Aleppo since Bashar al-Assad's ousting took off with 43 passengers. UN envoy Geir Pedersen called for free elections, a new constitution, and a political solution for Kurdish areas, along with humanitarian aid and lifting of sanctions. [Dawn]
• Fed Cuts Rates, Warns on Inflation: The US Federal Reserve reduced interest rates by a quarter point to 4.25% to 4.50%, signaling a slower pace of future cuts due to inflation concerns and uncertainty surrounding President-elect Donald Trump's economic plans. Fed Chair Jerome Powell's cautious stance led to a sharp drop in Wall Street stocks and revised market expectations, with only one 25 bps rate cut now anticipated in 2025, down from earlier projections of a larger easing. The Fed also raised its inflation outlook for next year from 2.1% to 2.5%. [BR] [Dawn] [The News]
• Greece Boat Tragedy Kills 40: The death toll from the Greece boat capsize rose to 40, including 35 missing Pakistanis. Five victims from Sialkot, Gujrat, Mandi Bahauddin, and Narowal were confirmed dead. The FIA has filed six cases against suspects involved in trafficking victims from Punjab to Libya, sealing FIRs to protect facilitators' identities. Prime Minister Shehbaz Sharif has requested a report on human trafficking cases. [Dawn]
• Global Coal Consumption to Hit Record in 2024: Global coal consumption is set to reach a record high of 8.77 billion tonnes in 2024, driven by strong demand in Asia, particularly China. Despite a decline in coal use in the US and Europe, China's demand will be nearly a third higher than the rest of the world. This surge occurs while coal's share of the global power mix drops to 35%, as renewable energy growth helps meet rising energy demand. [Dawn]
• China, India Hold Border Talks: China and India held formal talks for the first time in five years, aiming to ease their long-standing border dispute. The meeting, between Chinese Foreign Minister Wang Yi and India's National Security Advisor Ajit Doval, reaffirmed both countries' commitment to finding mutually acceptable solutions and strengthening border control to maintain peace in the western Himalayan region. [BR] [ET]
• Oil Prices Rise Amid US Production Concerns: Oil prices rose on Wednesday, with Brent at $73.81 and WTI at $70.94, driven by lower US crude inventories and speculation of a US rate cut. Meanwhile, palm oil prices fell. OPEC+ is concerned that rising US oil production, especially under a potential Trump administration, could hurt its market share and price support efforts. OPEC+ has delayed output increases and extended supply cuts until 2026 due to weak demand and increasing US production. [BR] [BR] [ET]

OPINION(S) & REMAINDERS

• Pakistan's M2 Declines Rs 347 Billion: As of December 6, 2024, Pakistan's broad money (M2) decreased by Rs 347.22 billion to Rs 35.13 trillion, down Rs 1.42 trillion from June 2024. Currency in circulation rose by Rs 258.6 billion WoW to Rs 9.29 trillion, while bank deposits fell by Rs 600.86 billion WoW to Rs 25.79 trillion. [MG]
• Pakistanis File 28,000 EU Protection Applications: Between October 2023 and October 2024, Pakistanis submitted 28,000 applications for international protection in EU Plus countries, with a decline in monthly figures since October 2023. Italy was the top destination, followed by France, Greece, and Germany. The EU issued around 20,000 decisions, with only 12% of applicants granted refugee or subsidiary protection. By the end of October 2024, nearly 34,000 decisions were still pending. [Dawn]
• Opinion: Accessing The RSF - “The IMF is a relatively new player in the climate space. It has moved rapidly to carve a role for itself by formally recognising long-ignored links between macroeconomic stability and climate resilience. Pakistan is now seeking over a billion dollars from its Resilience and Sustainability Facility (RSF). This offers Pakistan an opportunity to redefine its climate landscape and engage the IMF on five big strategic barriers to climate action.” - By Ali Tauqeer Sheikh [Dawn]