Sugar IMPEX, Smog Results, Torkham Border, UBL-Silk Bank Merger, Jaffar Express Hostages, Russia-Ukraine Ceasefire.

TOPLINE

• PM Sharif established an Inter-Ministerial Committee to assess raw sugar imports for re-export and control rising prices. Finance Minister Aurangzeb reported a 54% rise in sugar sales tax collection to Rs 24 billion in early 2025. He credited anti-smuggling measures and a FBR tracking system for legal exports to Afghanistan and preventing hoarding.
• Pakistan experienced its worst winter smog season in years, with toxic air pollution exceeding safe levels by 20 times for at least four months, according to AFP's analysis of AQICN data. Lahore was the hardest hit, with its 14 million residents exposed to dangerous PM2.5 levels for six months.
• The Torkham border crossing, closed since February 21, is expected to reopen soon after Pakistani security officials held talks with tribal elders following positive signals from the Afghan side. Ongoing negotiations between Afghan and Pakistani jirgas, along with meetings in Kabul and Jalalabad, have raised hopes for a resolution within the week.
• The State Bank of Pakistan (SBP) has approved the merger of Silk Bank Limited (SBL) into United Bank Limited (UBL), effective March 11, 2025. As part of the amalgamation, Silk Bank ceases to exist as an independent entity, and UBL will issue new shares to Silk Bank shareholders at a swap ratio of one UBL share for every 25 Silk Bank shares.
• Militants attacked the Jaffar Express in Balochistan, taking over 400 passengers hostage, while security forces launched a large-scale operation in the Bolan Pass, killing 16 attackers, rescuing over 100 passengers, and confirming at least 10 casualties. Following the attack, Pakistan Railways suspended all trains through Balochistan.
• Ukrainian drones struck high-rise apartments on Moscow's outskirts in the largest attack on the Russian capital since the war began, killing three people and disrupting oil supplies to Hungary. Ukraine has agreed to a 30-day ceasefire with Russia, prompting the US to lift restrictions on military aid and intelligence sharing after high-level talks in Saudi Arabia.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Garment Exports Rise 18.4%: Rs 111 billion was the value of readymade garments exported in Jan 2025, up 18.4% compared to exports of Rs 93.5 billion last year. [ET]
• PM Forms Committee on Sugar Imports: PM Shehbaz Sharif established an Inter-Ministerial Committee to assess raw sugar imports for re-export and control rising prices. Officials link the sharp price surge to early-season exports and questionable industry cost calculations. [BR]
• Sugar Sales Tax Up 54%: Finance Minister Muhammad Aurangzeb reported a 54% rise in sugar sales tax collection to Rs 24 billion in early 2025 due to stricter monitoring. He credited anti-smuggling measures and an advanced FBR tracking system for ensuring legal exports to Afghanistan and preventing hoarding. [BR] [BR] [Dawn]
• Sindh Leads Punjab in Cotton Yield: Sindh outperformed Punjab in per-acre cotton yield during the 2024 season, though both provinces saw overall production declines. According to the Pakistan Cotton Ginners Association, total cotton arrivals dropped 34.17% to 5.52 million bales, with Punjab’s production falling 36.49% to 2.72 million bales and Sindh’s decreasing 31.77% to 2.81 million bales. [BR]
• Committee Recommends Uniform Cotton Tax Policy: The prime minister's committee on cotton crop revival recommended uniform tax policies for domestic and imported cotton to boost competitiveness and support growers. In its first meeting, chaired by Minister Rana Tanveer Hussain, stakeholders highlighted key issues such as high sales tax, lack of quality seeds, insufficient GMO research, and the need for better awareness campaigns. [Dawn] [ET]
• Pakistan's Exports to US Rise 11.23%: Pakistan's exports to the US rose by 11.23% in the first seven months of FY 2024-25, reaching $3.565 billion, while overall exports grew by 7.56% to $19.175 billion. Imports from the US increased by 22.63% to $1.268 billion, contributing to a 10.88% rise in total imports, which reached $33.314 billion. [ET]
• Chinese Firm Plans Sino-Pak Agri Park: Chinese firm Fanduoduo plans to establish a Sino-Pak Agricultural Industrial Park and launch an Urdu cross-border e-commerce platform to boost agricultural trade. The initiative aims to streamline Pakistan’s fragmented supply chains, lower costs, and enhance farmers' access to affordable inputs while expanding exports to China. [ET]

ENERGY - WEATHER, WATER & POWER

• Pakistan Faces Worst Winter Smog in Years: Pakistan experienced its worst winter smog season in years, with toxic air pollution exceeding safe levels by 20 times for at least four months, according to AFP's analysis of AQICN data. Lahore was the hardest hit, with its 14 million residents exposed to dangerous PM2.5 levels for six months, while pollution levels remained high across the country, starting earlier than usual in October. [BR] [Dawn]
• Pakistan Reaffirms Commitment to SDGs: Finance Minister Muhammad Aurangzeb reaffirmed Pakistan’s commitment to achieving SDGs and collaborating with development partners like the UN. In a meeting with UN officials, discussions focused on debt management, climate financing, and Pakistan’s transition to green energy. [BR]
• LNG Imports Drop 30% in January: Rs 87.3 billion was the value of liquified natural gas imported in Jan 2025, down 30% compared to imports of Rs 125 billion last year, according to the PBS. [ET]
• Gwadar Faces Water, Power Shortages: A decade after CPEC's launch, Gwadar still lacks sufficient clean water and indigenous electricity, hindering its progress. Planning Minister Ahsan Iqbal expressed dissatisfaction over delays in national grid connectivity and directed authorities to submit an updated progress report within five days. [ET]
• Reko Diq to Generate $74 Billion: The Reko Diq gold and copper project, set to begin production by 2028, is expected to generate $74 billion in free cash flow over 37 years. With an initial $5.5 billion investment, the mine will boost annual exports by $2.8 billion, attract foreign investment, and create thousands of jobs. [ET]
• Pakistan Car Sales Up 50% YoY: Pakistan’s car sales surged 50% YoY in 8MFY25 to 89,770 units, while February sales rose 24% YoY but fell 29% MoM due to a high base effect from January. The decline is linked to delayed December purchases and Sazgar Engineering’s cumulative sales reporting. [ET] [PT]
• Torkham Border Set to Reopen Soon: The Torkham border crossing, closed since February 21, is expected to reopen soon after Pakistani security officials held talks with tribal elders following positive signals from the Afghan side. Ongoing negotiations between Afghan and Pakistani jirgas, along with meetings in Kabul and Jalalabad, have raised hopes for a resolution within the week. [Dawn]
• PPP Opposes New Indus Canals Plan: The PPP has decided to oppose the federal government's plan to carve out more canals from the Indus River following criticism from President Asif Ali Zardari. A special Sindh Assembly session has been summoned on Thursday to pass a resolution against the project, with discussions expected to continue for two days. [ET]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• Militants Attack Jaffar Express in Balochistan: Militants attacked the Jaffar Express in Balochistan, taking over 400 passengers hostage, while security forces launched a large-scale operation in the Bolan Pass, killing 16 attackers, rescuing over 100 passengers, and confirming at least 10 casualties. Following the attack, Pakistan Railways suspended all train operations between Punjab, Sindh, and Balochistan until security agencies declare the area safe. [BR] [Dawn] [Dawn] [ET]
• PM Prioritizes IMF Tranche, Economic Stability: Prime Minister Sharif stressed the need to secure the IMF’s $1 billion tranche for economic stability, alongside efforts to combat terrorism and boost key sectors. Deputy PM Dar reaffirmed the government's commitment to climate adaptation while expediting efforts to access the IMF’s Resilience and Sustainability Facility (RSF). [BR] [BR]
• SBP Approves Silk Bank-UBL Merger: The State Bank of Pakistan (SBP) has approved the merger of Silk Bank Limited (SBL) into United Bank Limited (UBL), effective March 11, 2025, under Section 48 of the Banking Companies Ordinance 1962. As part of the amalgamation, Silk Bank ceases to exist as an independent entity, and UBL will issue new shares to Silk Bank shareholders at a swap ratio of one UBL share for every 25 Silk Bank shares. [PT]
• Pakistan Hikes Gas Rates to Meet IMF Terms: To meet IMF conditions for a $1.1 billion disbursement, the government swiftly raised gas rates for industrial captive power plants (CPPs) by 23 percent and imposed a Rs791 per mmBtu grid levy effective March 7, 2025. The decision followed IMF pressure on enforcing the levy, prompting immediate compliance to advance policy negotiations. [Dawn]
• Pakistan Remittances Hit Record $3.1 Billion: Finance Minister Muhammad Aurangzeb reported record-breaking remittance inflows of $3.1 billion in February 2025, projecting a historic $36 billion by the fiscal year's end. He credited the Pakistani diaspora for their crucial economic contributions, emphasizing improved investor confidence and institutional reforms. [ET]
• Govt Delays Decision on SBP Roles, Carbon Levy: The government remains undecided on allowing dual nationals to hold key positions in the State Bank of Pakistan and imposing a carbon levy to curb emissions. Prime Minister Shehbaz Sharif and Deputy Prime Minister Ishaq Dar deferred decisions in separate meetings, while officials indicated a push to raise the petroleum levy by Rs 10/litre to address revenue shortfalls. [ET]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• NASA Satellite Reveals Plankton Disruption: Plankton, microscopic organisms vital to marine ecosystems and oxygen production, are being disrupted by climate change, endangering the entire ocean food chain. NASA's PACE satellite, launched a year ago, is offering the most detailed insights yet into phytoplankton diversity and distribution, improving scientists' understanding of oceanic life. Researchers compare this advancement to removing a green filter from satellite images, revealing the full spectrum of phytoplankton, which serve as the foundation of marine ecosystems by supporting zooplankton, fish, and larger ocean creatures. [NYT]
• Trump Doubles Tariffs on Canadian Steel: Former US President Donald Trump announced a sharp increase in tariffs on Canadian steel and aluminum, doubling planned duties to 50%, while threatening to shut down Canada’s auto industry. The move, part of his broader trade offensive, also includes a 25% tariff on steel imports from Brazil, Mexico, and other countries, sparking concerns among manufacturers about rising costs and supply chain disruptions. [BR]
• Ukrainian Drones Hit Moscow in Major Attack: Ukrainian drones struck high-rise apartments on Moscow's outskirts in the largest attack on the Russian capital since the war began, killing three people and disrupting oil supplies to Hungary. The Kremlin condemned the strikes, which came ahead of US-Ukraine talks in Saudi Arabia, while Kyiv framed them as a response to Russia's long-range aerial attacks. [ET]
• Ukraine, Russia Agree to 30-Day Ceasefire: Ukraine has agreed to a 30-day ceasefire with Russia, prompting the US to lift restrictions on military aid and intelligence sharing after high-level talks in Saudi Arabia. The move follows tensions between Trump and Zelenskyy, with US officials hoping it will lead to broader negotiations, while Trump's envoy prepares to present the proposal to Putin. [ET]
• EU Proposes Migrant Return Centers Outside Bloc: The EU has proposed reforms to its migrant return system, allowing member states to establish return centers outside the bloc to speed up deportations amid growing political pressure. Led by countries like Sweden, Italy, Denmark, and the Netherlands, the initiative aims to address low return rates and rising public opposition to irregular migration. [ET]
• Gold Rises 0.8% on Trade War Concerns: Gold prices rose 0.8% to $2,912.88 an ounce, driven by safe-haven demand amid trade war concerns and a weakening US dollar. Market uncertainty escalated due to President Trump’s fluctuating tariff policies, affecting Canada, Mexico, and China, while investors awaited US inflation data. [BR]
• India's Edible Oil Imports Hit Four-Year Low: India’s edible oil imports in February fell to a four-year low, depleting inventories to their lowest level in three years, according to the Solvent Extractors’ Association of India (SEA). Despite declines in soy oil and sunflower oil imports, palm oil imports surged 35.7% from January to 373,549 metric tons, potentially boosting future demand and supporting global prices. [BR]
• Chicago Soybean Prices Drop on Brazilian Supply: Chicago soybean prices fell for the third straight session, hitting a one-week low due to abundant Brazilian supplies and concerns over weaker demand from China. Wheat and corn also declined amid broader market weakness, with traders awaiting the US Department of Agriculture's supply and demand report for further direction. [BR]

OPINION(S) & REMAINDERS

• CCoP Fast-Tracks Roosevelt Hotel Privatisation: The Cabinet Committee on Privatisation (CCoP), chaired by Deputy Prime Minister Ishaq Dar, decided to fast-track the privatisation of PIA-owned Roosevelt Hotel in New York. The committee urged the Privatisation Commission to expedite the process, emphasizing efficiency in state asset divestment to enhance economic viability and attract investment. [BR] [ET]
• SBP to Islamabad: "No Reforms, No Rate-Cut, No Growth" - “Although imports are gaining pace, SBP seems to believe that messing with the exchange rate may invite chaos. If the rupee slips well beyond the psychological barrier of Rs 280, remittance flows could take a hit, as overseas workers hold back in anticipation of better rates. Parallel markets would wake up, and the resulting instability could undo the hard-fought? monetary stability. The fear of capital flight, alongside the Federal Reserve’s cautious stance on rate cuts, has kept SBP wary of aggressive easing. The risk of diverging too sharply from global monetary trends is real—it could send capital fleeing and reintroduce volatility into an already fragile economy.” - [BR]
• Opinion: Finding a Canal Alternative - “Corporate farming in Cholistan, as part of the military-backed Green Pakistan Initiative (GPI), is a scheme which has the potential to revolutionise Pakistan’s agricultural landscape. However, its success hinges on intelligent implementation within socioeconomic and scientific boundaries. If mismanaged, not only will the initiative fail, it will also damage the credibility of its architects, who conceived it as a win-win strategy for all Pakistanis.” - By Hassan Abbas [Dawn]