Sugarcane Support Price, POL Increase, FOREX & Tariffs, Pak-Afg Border, SECP in Oct & PSX, Indian Oil Imports.

TOPLINE

• CM Sindh Justice Maqbool Baqar, has fixed the minimum sugarcane price at Rs 425 per maund for the 2023-24 crop. The per-acre cost of sugarcane is Rs 244,984, and with a 12.7% profit added, the minimum price is set at Rs 425. There are currently 127 pending cases related to alleged sugar cartelization, delaying the recovery of the Rs 44 billion penalty imposed by the Competition Commission of Pakistan (CCP).
• Petrol prices are expected to increase by Rs 3.18/liter to Rs 286.56, while high-speed diesel may decrease by Rs 8.30/liter to Rs 294.88 in the second half of November.
• The oil industry is urging the government to change the exchange rate calculation for petroleum imports, citing significant losses due to current fluctuations. The Towel Manufacturers Association of Pakistan convened to discuss a significant increase in industrial gas tariffs, expressing deep concern over its impact on export-oriented units.
• Pakistan has opened 3 new border crossings to expedite the repatriation of Afghans facing deportation.
• In October 2023, the SECP registered 2,463 new companies in Pakistan, bringing the total to 205,456, with a capitalization of PKR 4.24 billion for the new entities with 99.6% of registrations processed online. The PSX reached its highest level in history with the KSE-100 Index surging by 2.04% to close at a record 56,523.58 points.
• India's imports of palm oil and sunflower oil for the 2022/23 period reached record highs, surging by 24% and 54%, driven by a consumption rebound and favorable pricing compared to soya oil. The purchases by India, the world's largest importer of veg oils, may impact palm oil stocks, supporting benchmark futures.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

• Sindh's 2023-24 Sugarcane Rate: CM Justice Maqbool Baqar, has fixed the minimum sugarcane price at Rs 425 per maund for the 2023-24 crop. Secretary Aijaz Shah stated that the per-acre cost of sugarcane is Rs 244,984, and with a 12.7% profit added, the minimum price is set at Rs 425. [BR] [Dawn]
• Sugar Cartel Cases Delay Rs 44 Billion Recovery: There are currently 127 pending cases related to alleged sugar cartelization, delaying the recovery of the Rs 44 billion penalty imposed by the Competition Commission of Pakistan (CCP). The delay is primarily attributed to stay orders from various courts, with 24 cases in the Supreme Court, 25 in the Lahore High Court, 6 in the Sindh High Court, and 72 in the non-functional Competition Appellate Tribunal, where the appointment of a chairman is hindered by stringent criteria. [The News]
• Bearish Trend in Local Cotton Market Despite Spot Rate Increase: The local cotton market experienced a bearish trend with low trading volume, despite a Rs 200 per maund increase in the spot rate, closing at Rs 17,500. In Sindh, cotton rates range from Rs 15,500-17,500/maund, with Phutti rates between Rs 5,000-7,500/40 kg. In Punjab, cotton rates range from Rs 16,000-17,500/maund, and Phutti rates range from Rs 6,500-8,200/40 kg. In Balochistan, the cotton rate is Rs 15,500-16,500/maund, with Phutti rates between Rs 6,500-8,300/40 kg. [BR]
• Pakistan's Low Cigarette Prices: Tax Impact - Pakistan's low cigarette prices, compared to neighbors like India and Sri Lanka, result from lenient tax regulations for both premium and value-for-money segments. Dr. Aman Khan of the Waseela Foundation notes that Pakistan's more relaxed tax policy differs from the stringent measures in neighboring countries, designed to curb smoking rates by raising cigarette costs for health reasons. [BR]
• Cumulative Cement Offtake Rises in FY24 Despite October Dip: Despite a monthly decline in cement dispatches in October 2023, the cumulative offtake for the first four months of FY24 increased by 14%, driven by a significant 78% rise in exports. Exports now constitute 15% of total offtake, up from 10% last year. While domestic offtake also increased by 8%, challenges such as rising construction costs and inflationary pressures impact private sector sentiments. Current offtake is not optimizing capacity utilization. [BR]
• Vegetables Export: Rs 5.48 billion was the export value of vegetables in Sept 2023, up 60.57% compared to Rs 3.41 billion in Sept 2022, according to the PBS. [ET]

AGRI-INPUTS, WEATHER, WATER & POWER

• November Fuel Price Projections: Petrol Up, Diesel Down - Petrol prices are expected to increase by Rs 3.18/liter to Rs 286.56, while high-speed diesel may decrease by Rs 8.30/liter to Rs 294.88 in the second half of November. Kerosene and light diesel oil are also projected to see reductions of Rs 5.61/liter and Rs 8.33/liter, respectively, with potential government considerations to maintain petrol prices and a significant drop of Rs 10/liter in high-speed diesel rates. [ET]
• Govt Drops Winter Industry Package Amid IMF Disapproval: The federal government has scrapped the proposed Winter Package for industries nationwide as it failed to secure approval from the International Monetary Fund (IMF). The Finance Division deemed the four-month electricity 'winter package' for industry as "vague and in violation of international commitments," leading to its shelving, despite three options being considered by the Power Division for implementation from November 2023 to February 29, 2024. [BR]
• Oil Industry Calls for Exchange Rate Formula Revision: The oil industry is urging the government to change the exchange rate calculation for petroleum imports, citing significant losses due to current fluctuations. They seek a revised formula based on actual exchange losses rather than the existing method linked to Pakistan State Oil's gains and losses, requesting a consultative session with the government for a more equitable pricing approach. [The News]
• Refineries, Regulators Clash Over Incentive Agreement Terms: Oil refineries, including Attock Refinery Limited (ARL), are at odds with regulators over the signing of an agreement to access incentives for upgrading projects under the new refinery policy. Disagreements, particularly related to forced majeure and incremental revenue collection clauses, have reportedly emerged between refineries and the regulator. [ET]
• Mari Petroleum Initiates Gas Production at Mari Ghazij-1 Well: Mari Petroleum Company Limited (MARI), a major energy and exploration firm in Pakistan, has officially commenced gas production from its Mari Ghazij-1 appraisal well in Mari D&PL, Sindh. The company informed the Pakistan Stock Exchange (PSX) of this development, following the successful drilling and testing of the well last month, as disclosed in their notice dated October 9, 2023. [BR]
• Towel Manufacturers Express Concern Over Surge in Gas Tariffs: The Towel Manufacturers Association of Pakistan convened to discuss a significant increase in industrial gas tariffs, expressing deep concern over its impact on export-oriented units. Chairman Syed Usman Ali noted the difficulty for manufacturing processes, stating that the tariff hike adds to existing challenges in international competitiveness due to high energy costs. [BR]
• World Bank Supervises Flood Detention Dam Project in Sindh: Under the Sindh Flood Emergency Rehabilitation Project, the World Bank mission, led by Ahsan Tehsin, is overseeing the construction of 11 flood detention dams in Sindh. These dams, managed by the irrigation department, aim to harvest rainwater, recharge groundwater, and convert wastelands into fertile farmland. The mission inspected the Lat-01 flood detention dam site in the Kohistan region. [Dawn]

AGRI UPDATES & PAKISTAN POLICY

• IMF Mission Seeks Bilateral Support for Pakistan Amid Fiscal Talks: The IMF's mission is engaging bilateral partners to secure support for Pakistan amid ongoing policy-level discussions addressing the external financing gap. Led by Finance Minister Dr. Shamshad Akhtar and IMF's Nathan Porter, the talks, concluding Wednesday, aim to revise fiscal and external frameworks under the $3 billion Standby Arrangement. Concerns over the exchange rate, dollar inflows, and tariff adjustments are being addressed to reduce the current account deficit, employing slight import compression to minimize the external financing gap. [Dawn] [The News]
• Caretaker PM Kakar Reviews Trade, Policies, & International Affairs: Caretaker Prime Minister Anwaarul Haq Kakar led a federal cabinet meeting to review political and economic situations. The agenda included discussions on the Free Trade Agreement, the revised Haj Policy, taxing bank profits, and expanding the Pakistan Business Visa Online List. Approval for the Azad Jammu and Kashmir Council's budget and briefings on Gaza, the Saudi Arabia visit, and evacuating illegally staying foreigners were also covered. [The News]
• Pakistan Opens New Crossings for Repatriation of Afghan Nationals: Pakistan has opened 3 new border crossings to speed up the repatriation of over 1 million undocumented Afghan nationals facing deportation. The move is part of the government's initiative, with many Afghans opting for voluntary return to avoid deportation. The additional crossings, located in Balochistan province, supplement the main crossing in Chaman district. [BR]
• Pakistan Stock Exchange Hits Record High at 56,523.58 Points: The Pakistan Stock Exchange witnessed a bullish trend on Monday, reaching its highest level in history with the KSE-100 Index surging by 2.04 percent to close at a record 56,523.58 points. This marked the third consecutive session of all-time highs, driven by aggressive buying from local and foreign investors, coupled with institutional support. Despite an intraday peak at 56,583.59 points, some profit-taking in specific stocks led to a slightly lower closing. [BR]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

• Lebanon-Israel Border - Casualties Amid Rising Hostilities: Escalating hostilities along the Lebanese-Israeli border have resulted in casualties on both sides, raising concerns of a broader conflict between Israel and the Iran-backed group Hezbollah. Israeli strikes in south Lebanon killed two individuals, while a Hezbollah missile attack wounded workers from the Israel Electric Company, with one succumbing to injuries. [BR] [ET] [Al Jazeera] [Reuters] [AP]
• Israeli Tanks Near Gaza Hospital Amid Deaths & Fuel Shortages: Israeli tanks positioned at Gaza City's main hospital, a primary target in efforts to control the northern Gaza Strip. Patients, including newborns, are reportedly dying due to fuel shortages. In the past three days, 32 deaths, including three newborns, were reported. Around 650 patients seek evacuation by the Red Cross or a neutral agency. Israel alleges the hospital sits atop tunnels used by Hamas fighters, a claim denied by Hamas. [BR] [Al Monitor] [CNN] [NYPost] [Al Jazeera] [France24]
• US Ambassador Seeks Meetings to Address Political Impasse in Bangladesh: The US ambassador to Bangladesh is seeking meetings with leaders of major parties to address the political impasse ahead of the January general election. The Bangladesh Nationalist Party (BNP) and allies plan to boycott the vote unless Prime Minister Sheikh Hasina steps down for a neutral government to oversee the polls. Hasina's crackdown since the breakup of a major opposition rally on October 28 has resulted in the arrest of over 11,000 BNP activists and nearly all top leaders. [Dawn] [Independent] [Barrons] [Reuters] [AP]
• UN Treaty Negotiations Begin to Address Global Plastic Pollution: Negotiations have commenced for a UN treaty on plastic pollution, involving 175 countries with the aim to finalize a binding agreement by 2024. The talks in Kenya mark the first detailed consideration of the treaty's concrete details. Plastic pollution, impacting oceans, mountains, and human health, is a global concern addressed in these negotiations, which seek to establish measures for combating plastic pollution worldwide. [Dawn] [UN] [Al Jazeera] [France24] [AP] [ABC]
• Iceland Earthquake Swarm Raises Eruption Concerns: Southern Iceland experienced around 900 earthquakes on Monday, adding to the tens of thousands of tremors in recent weeks, raising concerns about a significant volcanic eruption. Over the weekend, nearly 4,000 people were evacuated as authorities feared molten rock could reach the surface, posing a threat to a coastal town and a geothermal power station. [BR] [CBC] [CBS] [VOA]
• Chicago Corn Rebound on Record Crop Forecast: Chicago corn prices rebounded on Monday after the USDA forecasted a record corn crop this year. The most-active corn on the Chicago Board of Trade rose to $4.64-1/2 a bushel from Friday's low of $461-3/4, driven by concerns about dryness affecting Brazilian soybean plantings and stressing corn. Wheat declined, and soybeans rose in response. [BR] [Barchart] [SF] [SF] [FB] [CS]
• Nearly One Billion Children Face High Water Stress: Almost 1 billion children, out of the 4.2 billion expected to be born in the next 30 years, face high or extremely high water stress, according to a report by the United Nations Children’s Fund (Unicef). The findings highlight challenges such as water scarcity, vulnerability, and drought risk, with the EU planning a financial contribution to a new international fund addressing climate change destruction. [Dawn] [Dawn] [Unicef] [VN] [EN] [The Lancet]
• Indian Import Records for Oils: India's imports of palm oil and sunflower oil for the 2022/23 period reached record highs, surging by 24% and 54%, respectively, driven by a consumption rebound and favorable pricing compared to soya oil. The significant purchases by India, the world's largest importer of vegetable oils, may impact palm oil stocks in Indonesia and Malaysia, supporting benchmark futures. Palm oil imports totaled 9.79 million metric tons, and sunflower oil imports rose to 3 million tons. [BR] [BS] [Reuters] [JP] [SPGlobal] [HSN]
• British Home Secretary Sacked Over Controversial Statements: British Home Secretary Suella Braverman was sacked by Prime Minister Rishi Sunak after her criticism of the Metropolitan Police and comments on a pro-Palestine protest. James Cleverly replaced her in a cabinet reshuffle, with former Prime Minister David Cameron taking over as the new foreign secretary. [Dawn] [Al Jazeera] [NYT] [CNBC] [Time]
• Oil Prices Rise Over 1% After Positive OPEC Report: Oil prices increased by more than 1% on Monday following OPEC's monthly market report, which alleviated concerns about diminishing demand in the United States and China. Brent crude futures rose by $1.25, or 1.5%, reaching $82.68 a barrel, while US West Texas Intermediate (WTI) crude futures increased by $1.24, or 1.6%, reaching $78.41. [BR] [Oil Price] [Oil Price] [Reuters] [Reuters] [Fortune]

PAKISTAN - REMAINDERS

• Lahore High Court proposes two days work from home & weekend school closures to combat smog: [Dawn] [ET] [AN] [ANN] [Dunya] [Geo]
• Ambushes in Dera Ismail Khan and Waziristan: In Dera Ismail Khan, two civilians and a security guard were martyred in the second ambush targeting an oil and gas exploration company within a week. Lax security measures are attributed to a "network of militants." In North Waziristan, two security personnel were also martyred. The attack occurred in Darazinda, resulting in the deaths of a driver and an employee. [Dawn]
• SECP Registered 2,463 Companies in October 2023, 99.6% Online: In October 2023, the SECP registered 2,463 new companies in Pakistan, bringing the total to 205,456, with a combined capitalization of PKR 4.24 billion for the new entities. Notably, almost 99.6% of these registrations were processed online, reflecting the SECP's commitment to digitization. [PT]
• Opinion: Out of Breath - “Despite the opulence, the very essence of life for you and your family is being gradually eroded; your lifespan is curtailed by several precious years, and the once pristine quality of life tainted by the persistent specter of asthma, throat infections, and itchy eyes. Moreover, there is an ever-present apprehension, a gnawing fear that cardiovascular diseases, lung cancer, and respiratory issues may be just around the corner. That is how the issue of air quality has hit Pakistan’s cities. ” - By Masood Lohar [Dawn]