Textile Crisis, World Bank Pledge, Foreign Reserves Drop, Saudi Investment Pledge, Hughes Fire Grows, Stable Oil Prices.

TOPLINE

• Pakistan's textile sector, the largest export industry, is in crisis due to high electricity costs, leading to the closure of 187 out of 568 mills, with Punjab being the hardest hit. Urgent government intervention is needed to save the sector, which is critical for the country's economy and exports.
• The World Bank's $20 billion pledge for Pakistan, under the Country Partnership Framework (CPF), is contingent on the pace of structural reforms. The PM thanked the bank, while Finance Minister Aurangzeb discussed credit ratings and reforms with Saudi and Qatari counterparts. Talks focused on regional development and cooperation with Saudi Arabia.
• Pakistan's foreign exchange reserves fell by $261.6 million last week, reaching $16.19 billion as of Jan 17, 2025. The decrease was due to external debt servicing, with reserves held by State Bank of Pakistan (SBP) dropping by $276 million to $11.449 billion. However, commercial banks saw a slight increase, with reserves rising by $15 million to $4.741 billion.
• Saudi Crown Prince Mohammed bin Salman pledged $600 billion in US trade and investments, following Donald Trump's return to the White House. The promise was made during a phone call after Trump's inauguration, aiming to strengthen US-Saudi ties and potentially extend beyond the initial investment target.
• In southern California, powerful winds and dry conditions complicated firefighting efforts as the Hughes Fire near Los Angeles grew to 10,176 acres. The fire, which started on Wednesday, has been 14% contained, and tens of thousands were evacuated, while firefighters faced strong winds and low humidity.
• Oil prices remained stable on Thursday, with Brent at $79.18 per barrel and WTI at 14 cents to $75.58, recovering slightly from losses linked to US tariff concerns. Meanwhile, the benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange fell by 17 ringgit (0.4%), closing at 4,191 ringgit ($943.49) per metric ton.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Daily Rates: Find the following rates on the hyperlinked titles: [Shipping Intelligence], [Pakistan Stock Exchange], [Kibor International Kibor Rates], [BRIndex100 & BR Sectoral Indices], [Activities of Karachi Port Trust, Port Qasim]
• Gold and Silver Prices Drop: Gold prices dropped on Thursday, with a Rs 750 decrease to Rs 286,700/tola and Rs 641 to Rs 245,799/10 grams. Silver also fell by Rs 30 and Rs 26, selling at Rs 3,401/tola and Rs 2,915/10 grams. Prices in the open market may vary from those set by the association. [BR]
• Cotton Prices Across Pakistan: Cotton prices in Sindh range from Rs 17,600-Rs 19,000/maund, with Phutti priced between Rs 7,500 and Rs 9,000/40 kg. In Punjab, cotton is priced between Rs 17,075 and Rs 19,000/maund, and Phutti between Rs 7,500 and Rs 9,400/40 kg. In Balochistan, cotton ranges from Rs 17,500-Rs 19,400/maund, and Phutti from Rs 7,400-Rs 9,500/40 kg. Balochi Cotton is priced between Rs 18,800 and Rs 19,000/maund, while Primark cotton is valued at Rs 19,300-Rs 19,500/maund. [BR]
• Pakistan Raw Food Exports Grow 13.83%: Pakistan's raw food exports grew 13.83% to $3.96 billion in the first half of FY25, driven by a 14.50% increase in rice exports. Basmati rice exports rose 30.62% in quantity, while non-basmati rice increased 17.35% in quantity. Despite food inflation, exports have continued to rise for 17 months. [Dawn]
• Pakistan Textile Industry Crisis: Pakistan's textile sector, the largest export industry, is in crisis due to high electricity costs, leading to the closure of 187 out of 568 mills, with Punjab being the hardest hit. Urgent government intervention is needed to save the sector, which is critical for the country's economy and exports. [PT]
• Textile Exports Strong Despite Challenges: 2024 was a strong year for textile exports, with record or near-record volumes in high-value add (HVA) segments despite challenges like declining cotton production, high energy costs, and taxes. However, the latter half of the year saw a slowdown in growth, with garment export growth almost halting compared to the same period last year. [BR]
• PTB Asset Dispute Over Devolution: The dispute over the Rs 4 billion assets of the Pakistan Tobacco Board (PTB) has grown as it is set to be devolved to Khyber Pakhtunkhwa. PTB, previously under federal control due to its revenue potential, is being handed over following the 18th Amendment's devolution process. [Dawn]

ENERGY - WEATHER, WATER & POWER

• IMF Proposes Gas Tariff Change: The IMF has proposed aligning gas tariffs for captive power plants (CPPs) with RLNG prices starting February 1 to ensure full energy cost recovery. It also suggests imposing a levy on CPPs to help reduce Pakistan's circular debt and improve the energy sector. [ET]
• PPL Boosts Gas Output, Sui Southern Targets Theft: Pakistan Petroleum Limited (PPL) enhanced gas production at the Shahdad X-1 well by increasing output from 2.2 MMscfd to 8.4 MMscfd and reducing water production significantly. Meanwhile, Sui Southern Gas Company removed 2,671 illegal gas connections in Karachi, targeting areas like Korangi and Sohrab Goth where gas theft was occurring. [MG] [BR]
• NEPRA Seeks Feedback on KAPCO License Extension: NEPRA is seeking public comments on Kot Addu Power Company's request to extend its generation license for 550 MW of its 1600 MW plant, which expired on September 21, 2024. KAPCO seeks a seven-year extension to align with the Integrated Generation Capacity Expansion Plan and ensure system reliability. [MG]
• Energy Ministry Provides Free Power to 200,000 Employees: The energy ministry spends billions yearly providing free electricity to over 200,000 employees, totaling 441.5 million units annually. Most beneficiaries are from Distribution Companies (DISCOs) and the National Transmission and Despatch Company (NTDC), with 149,000 employees (serving and retired) in DISCOs and 26,000 in NTDC. [ET]
• Pakistan-Saudi Economic Opportunities: Pakistan should tap Saudi Arabia's export potential in agriculture, textile, construction, and IT following recent economic reforms, said Ambassador Ahmad Farooq. Speaking at FCCI, he highlighted opportunities for Pakistani businesses, noting over 90 Pakistani IT companies already operating in KSA. [BR]
• Pakistan-Europe Maritime Link: The new maritime service connecting Pakistan to Europe will lower transshipment costs, speed up deliveries, and enhance the global competitiveness of Pakistani goods. Starting February 5 from Karachi, it aims to strengthen the seaborne trade supply chain. [ET]
• Pakistan Seeks Swedish EV Support: Federal Minister Awais Leghari invited Sweden Green Fund to support Pakistan's shift to electric vehicles (EVs) through technical and financial aid, focusing on converting 30 million motorcycles. This aligns with Pakistan's recent reduction in EV charging station tariffs. [ET]
• Senate Panel Discusses Islamabad Water Crisis: A Senate panel met to address the worsening water crisis in Islamabad, highlighting contamination and inadequate infrastructure. Senator Sherry Rehman revealed that nearly 9 million gallons of sewage are discharged into Rawal Dam daily, endangering water safety and public health, especially contributing to diarrhoea among children. [Dawn]
• Kalri Baghar Water Supply Delay: The resumption of water supplies into the Kalri Baghar Feeder, planned for January 25, has been delayed due to ongoing canal lining work for the K-IV project, a joint effort by Sindh Irrigation Department and the federal government. The timeline may now extend to the end of January. [Dawn]
• OGDCL Boosts Oil Production at Kunnar: OGDCL has significantly boosted oil production at its Kunnar Oil Field in Sindh, increasing output by 1,160 barrels per day from wells Kunnar-12 and Kunnar-6. Production at Kunnar-12 rose from 1,060 BPD to 1,820 BPD after optimization with an Electrical Submersible Pump, while Kunnar-6 was successfully revived after being shut-in due to water issues. [BR] [ET]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• World Bank Pledges $20 Billion for Pakistan: The World Bank's $20 billion pledge for Pakistan, under the Country Partnership Framework (CPF), is contingent on the pace of structural reforms. Prime Minister Shehbaz Sharif expressed gratitude for the pledge, which focuses on inclusive development, human capital, and private sector growth. Finance Minister Muhammad Aurangzeb met with Saudi and Qatari finance ministers to discuss Pakistan's improved credit ratings and economic reforms, including regional development and financial cooperation with Saudi Arabia. [BR] [BR] [BR] [Dawn] [ET]
• Bilawal Criticizes PML-N Governance: PPP Chairman Bilawal Bhutto Zardari criticized the PML-N-led government for making unilateral decisions, stressing the need for consensus-based policymaking. He emphasized that ignoring political allies and the public's input complicates governance and highlighted PPP's support for workers' rights. [ET]
• PECA Amendments Passed in National Assembly: The National Assembly passed the Prevention of Electronic Crimes (Amendment) Act, 2025, and The Digital National Pakistan Bill, 2024, just one day after their introduction, despite PTI and journalists' walkout. Both bills were swiftly approved by relevant committees. The PECA amendments are expected to pass in the Senate on Friday. [BR] [Dawn] [ET] [ET]
• Budget Proposals Requested for 2025-26: Finance Minister Senator Muhammad Aurangzeb has requested budget proposals for the Federal Budget 2025-26 from all ministries by February 9, 2025, marking an early start to the process. The Finance Division and Federal Board of Revenue have already issued circulars and invited proposals from both public and private sector stakeholders. [BR]
• Pakistan Foreign Reserves Drop: Pakistan's foreign exchange reserves fell by $261.6 million last week, reaching $16.19 billion as of Jan 17, 2025. The decrease was mainly due to external debt servicing, with reserves held by the State Bank of Pakistan (SBP) dropping by $276 million to $11.449 billion. However, commercial banks saw a slight increase, with reserves rising by $15 million to $4.741 billion. [BR] [Dawn] [ET]
• Iqbal Highlights Inclusive Policy Focus: Federal Minister Ahsan Iqbal emphasized the government's commitment to inclusive policy making and private sector involvement during a meeting with the Overseas Investors Chamber of Commerce and Industry (OICCI) in Karachi. He highlighted the importance of private sector contributions and the "Uraan Pakistani Programme," describing it as a call for action requiring broad collaboration across society. [BR] [Dawn]
• Network Protection Top Cybersecurity Concern in Pakistan: In 2024, network protection became the top cybersecurity challenge for Pakistani businesses, with 71% facing network infiltration attempts. The Kaspersky report found that 49% of companies experienced malicious code execution or system control breaches. Large enterprises had the highest rate of incidents, while small and medium-sized businesses were also impacted, often due to employee actions. [ET]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• Israeli Genocide: Israeli forces launched a deadly raid in the Jenin area of the occupied West Bank, prompting hundreds of residents to evacuate after orders were issued through loudspeakers. The operation, which began on Tuesday, has led to at least 12 Palestinian deaths and 40 injuries. Despite reports of evacuations, the Israeli army claimed it was unaware of any such orders. [Dawn]
• Trump Pushes US Manufacturing, WTO Warns of Trade Wars: US President Donald Trump urged global business leaders to manufacture in the US or face tariffs, signaling potential tariffs on Canada, Mexico, and China starting February 1. Meanwhile, WTO Chief Ngozi Okonjo-Iweala warned that trade wars from Trump's tariff threats could lead to catastrophic global growth, urging countries to avoid retaliation and maintain open trade. [BR] [BR] [Dawn] [ET]
• Saudi Crown Prince Pledges $600B US Investment: Saudi Crown Prince Mohammed bin Salman pledged $600 billion in US trade and investments, following Donald Trump's return to the White House. The promise was made during a phone call after Trump's inauguration, aiming to strengthen US-Saudi ties and potentially extend beyond the initial investment target. [Dawn] [ET]
• Yunus Criticizes Hasina's Growth Claims: Bangladesh's interim government head, Nobel laureate Muhammad Yunus, criticized the high growth under ousted Prime Minister Sheikh Hasina, calling it "fake" and accusing her of corruption. Yunus, who took charge in August after Hasina fled to India, also faulted the international community for not questioning her actions. [BR]
• Hughes Fire Grows Amid Winds: In southern California, powerful winds and dry conditions complicated firefighting efforts as the Hughes Fire near Los Angeles grew to 10,176 acres. The fire, which started on Wednesday, has been 14% contained, and tens of thousands were evacuated, while firefighters faced strong winds and low humidity. [BR]
• Rutte Urges US to Continue Ukraine Support: NATO Secretary General Mark Rutte urged the U.S. to continue supplying weapons to Ukraine and emphasized that Europe is ready to cover the costs. Speaking at the World Economic Forum, Rutte stressed the need for Europe to invest more in defense and contribute to Ukraine's aid efforts. [BR]
• Solar Surpasses Coal in EU Power Generation: In 2024, solar power surpassed coal in the EU's electricity production, driving renewables' share to 47%, up from 34% in 2019. Wind power became the second-largest source, following solar. Fossil fuel generation dropped to a historic low, with gas declining for the fifth consecutive year. The European Green Deal has significantly transformed the power sector, according to Ember. [Dawn]
• Oil Prices Stable, Palm Oil Falls: Oil prices remained stable on Thursday, with Brent crude rising 18 cents to $79.18 per barrel and WTI up 14 cents to $75.58, following losses due to concerns over US President Trump's tariffs and energy policies. Meanwhile, the benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange fell by 17 ringgit (0.4%), closing at 4,191 ringgit ($943.49) per metric ton. [BR]

OPINION(S) & REMAINDERS

• SECP Mandates Financial Disclosure: The SECP has instructed unlisted companies to publicly share their audited financial statements through the Financial Portal for Unlisted Companies (FPUC) within 30 days. These companies must continue uploading future statements on the portal until they are listed on the PSX. [BR]
• Opinion: Serious Issues in Punjab Govt’s Stimulus Programmes - “It would have made sense if the provincial government announced for mation of a ‘Price Commission’ for removing bottlenecks in these processes — for instance, introducing price controls, for instance on the nature of ‘dual-track’ pricing by China – and overall reducing market imperfections so that more rationalized prices are reached for means of production, and of intermediary-, and final goods of businesses.” - By Dr Omer Javed [BR]
• Opinion: The Dilemma of Rural to Urban Migration - “Thousands in Pakistan migrate yearly with a heavy heart, like Mir. Their reasons, however, differ. Most migration occurs from rural to urban areas. With 61.18% of Pakistan's population residing in rural regions, the urban share has increased significantly. Between 1998 and 2023, the urban population grew by 118%, while rural growth was only 65%. But why do people leave their communities and migrate to cities?” - By Muhammad Nameer Wajahat [ET]
• Opinion: Tug of War at Crossroads of Climate Change - “According to the Copernicus Climate Change Service (C3S), 2024 was the warmest year on record globally. Exploring the C3S website reveals striking and humbling graphical representations of temperature trends over past decades. For the first time since record-keeping began in 1967, the average global temperature exceeded 1.5-degree Celsius above pre-industrial levels during the past calendar year.” - By Asim Saeed [ET]