- Cotton prices have surged due to an unexpected decline in domestic production and challenges in importing lint. Rates increased by Rs 1,500/maund, reaching Rs 20,000/maund, the highest in the last 4.5 months. Rs 100.8 billion was the export value of knitwear in Nov 2023, up 13.25%.
- The import of 220,000 tonnes of urea aims to stabilize prices, but concerns persist about a potential 0.6 million tonne shortfall, as domestic production fell short of the annual demand of 7 million tonnes, reaching 6.4 million tonnes.
- The power sector in the country slashed its petroleum product consumption by nearly 75% in the first 5 months of the current fiscal year with only 300,000 tonnes used compared to 1.15 million tonnes in the same period last year.
- Omar Hamid Khan resigned as the Election Commission of Pakistan's secretary. The ECP received a Senate-approved resolution to defer the general elections amid razor-thin attendance. 76% of PTI's nomination papers were accepted and there was a national social media blackout on Sunday over a PTI-led virtual fundraiser.
- In November, the government of Pakistan increased public debt by Rs 908 billion, the third-highest monthly rise in the fiscal year. The UN anticipates the Pakistani economy to grow by 2% this year and 2.4% in 2025.
- Global food prices, with a 15.4% decline in the FAO's cereals price index, dropped 13.7% in 2023 due to improved supply conditions. The UN's FAO reported a 10% lower global price index for 2023 compared to 2022.
COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE
- Pakistan Faces Soaring Poultry Prices at Start of New Year: Poultry prices in Pakistan surged to Rs 520/kg at the year's start due to food inflation. In Lahore, the Poultry Association is selling chicken meat at Rs 602/kg and eggs at Rs 384/dozen, rejecting official rates. The administration lacks control over prices. [ARY] [Dawn] [ET]
- Cotton Prices Soar Amid Production Decline - Cotton prices locally have surged to a record high in the past week, attributed to an unexpected decline in domestic production and challenges in importing lint from abroad. Rates increased by Rs 1,500/maund, reaching Rs 20,000/maund, the highest in the last 4.5 months. Despite a rise in business volume, total cotton production is expected to be limited to 85 lac bales, leading to a shortage of quality cotton. Some spinners are resorting to importing cotton, and the government is considering offering electricity at 9 cents for exports and the textile sector. [Dawn] [BR]
- Pakistan's Sesame Seed Exports to China Skyrocket by 117.85%: Pakistan experienced a remarkable 117.85% surge in sesame seed exports to China last year, reaching $250 million from January to November 2023. This growth positions Pakistan as a key player in the global sesame seed market, with Chinese consumers increasingly favoring the quality and flavor of Pakistani sesame. [BR]
- Tando Growers Urge Govt Action on Water Shortage, Fair Prices: During a convention of small growers in Tando Mohammad Khan, Sindh, attendees urged the government to address water shortages, eliminate hoarding of farm inputs, and ensure fair prices for agricultural produce. The SAB president, Mahmood Nawaz Shah, highlighted the persistent water shortage in the region, warning of a potential drought. [Dawn]
- Pakistani Mandarin Exporters Crisis: Mandarin fruit exporters in Pakistan are facing escalating freight charges due to Houthi attacks on ships in the Red Sea. Two shipping companies withdrew, and others altered routes, leading to exorbitant increases in charges. This adds to challenges after higher duties imposed by the Afghan government on kinnow exports. [Dawn]
- Pakistan Aims to Boost Global Textile Exports at Heimtextil 2024: Pakistan, renowned for its textile heritage, is gearing up for Heimtextil 2024 to maximize home textiles exports and elevate its global market position. The event is scheduled from January 9th to 12th, promising a significant presence and opportunities for the nation. [ET]
- Spices Import: Rs 3.99 billion was the import value of spices in Nov 2023, up 50.6% compared to Rs 2.65 billion in Nov 2022. [ET]
- Fish Export: Rs 10.9 billion was the export value of fish and fish preparations in Nov 2023, down 4.6% compared to Nov 2022. [ET]
- Fruits Export: Rs 5.5 billion was the export value of fruits in Nov 2023, up 62.22% compared to Rs 3.4 billion in Nov 2022, according to the PBS. [ET]
- Woven Items Export: Rs 100.8 billion was the export value of knitwear in Nov 2023, up 13.25% compared to Rs 88.97 billion in Nov 2022, according to the PBS. [ET]
AGRI-INPUTS, WEATHER, WATER & POWER
- Pakistan Grapples with Fertilizer Shortage Amid Import Delays: The ongoing fertilizer shortage in Pakistan is attributed to a delayed cabinet decision on imports, according to Minister Solangi. The recent import of 220,000 tonnes of urea aims to address scarcity and stabilize prices, but concerns persist about a potential 0.6 million tonne shortfall, as domestic production in 2023 fell short of the annual demand of 7 million tonnes, reaching only 6.4 million tonnes. [ET]
- Reko Diq Logistics Inquiry: The federal government has asked Reko Diq Mining Company to share logistical details for their project, as the company is currently hesitant to use Gwadar Port. A Sub Committee meeting, chaired by General Zahir Shah, was held on December 27, 2023, with stakeholders discussing the matter in compliance with the decision of the project Support Team on Reko Diq. [BR]
- Engro Terminal Expansion: SIFC Mediation for LNG Project - Engro Elengy Terminal Limited (EETL) has requested help from the Special Investment Facilitation Council (SIFC) to resolve issues with Sui Southern Gas Company (SSGC) concerning the expansion of its LNG import terminal. EETL seeks SIFC's intervention to address SSGC's concerns about Third Party Access (TPA) at the terminal. [The News]
- Pakistan, K-Electric Sign Key Agreements for Power Supply: The Government of Pakistan and K-Electric reached a milestone by signing long-awaited agreements to address key demands from Saudi Arabia. The agreements, signed at the Energy Division, resolve disputes and secure a firm power supply from the national grid to Karachi. [BR]
- Power Sector Slashes Fuel Consumption by 75%: The power sector in the country slashed its petroleum product consumption by nearly 75% in the first 5 months of the current fiscal year, attributed to an economic slowdown and a shift to cheaper alternatives. Fuel oil consumption in the power sector dropped sharply, with only 300,000 tonnes used compared to 1.15 million tonnes in the same period last year. [The News]
- NEPRA Seeks Security Deposit Hike, Power Tariff Adjustments: NEPRA has asked power Distribution Companies to file petitions for increasing security deposits and rates for temporary electricity connections. Simultaneously, the Power Division is working on raising domestic tariffs to withdraw a cross-subsidy of Rs 245 billion, aiming to reduce industry tariffs and enhance competitiveness in the export-oriented sector. [BR]
- Neelum-Jhelum Power Station Halts Generation for Tunnel Inspection: The 969MW Neelum-Jhelum Hydel Power Station will cease electricity generation from January 10 for a 3.5-km-long tailrace tunnel inspection during the low-flow season. With rivers experiencing low water flows, considered ideal for inspections, the closure will only affect the station's 90 MW hydel share to the national grid, typically generated in January. [Dawn]
- Pakistan Navy Bolsters Arabian Sea Security: The Pakistan Navy has deployed warships in the Arabian Sea in response to recent maritime security incidents, to safeguard both Pakistan-bound and international shipping passing through the region. The navy intends to maintain a continuous presence in the Arabian Sea to closely monitor sea lines of communication, according to a statement from the navy's spokesperson. [ET] [AN]
- Balochistan Shivers: Cold Wave Challenges Residents - A severe cold wave has hit Quetta, Ziarat, Kalat, and other parts of Balochistan after recent snowfall and rainfall. Snowfall in mountainous areas and heavy rainfall in Quetta have created picturesque landscapes, but the extreme weather has led to increased gas and power load-shedding, compounding challenges for residents. [ET]
AGRI UPDATES & PAKISTAN POLICY
- EC Secretary Resigns, Election Postponement Resolution: Omar Hamid Khan resigned as Election Commission of Pakistan's secretary citing health reasons. This comes ahead of the scheduled February 8 general elections amid allegations of an uneven playing field. The Election Commission has also received a Senate-approved resolution to defer the general elections. A thinly attended session of the upper house of parliament on Friday adopted a non-binding resolution seeking the postponement of the general elections scheduled for February 8.? [BR] [Dawn] [The News] [Dawn] [Dawn]
- 76% of PTI Nominations Accepted: ECP Faces Contempt Allegations - The Election Commission of Pakistan stated that over 76% of PTI's nomination papers for the 2024 general elections were accepted, just before its secretary went on 'medical leave'. This information was provided in response to a PTI petition accusing the ECP and others of contempt of court for not addressing the party's grievances and ensuring a fair playing field as per the Supreme Court's Dec 22 orders. [Dawn]
- PTI's Election Manifesto Launch Disrupted by Social Media Blackout: The Pakistan Tehreek-i-Insaf (PTI) faced challenges launching its 2024 election manifesto and fundraising telethon as social media sites experienced a total blackout in the country. This marks the second time in recent months that internet disruptions impacted the PTI's online events, following a similar incident during a virtual power show on Dec 17. [Dawn]
- Fazlur Rehman Arrives in Kabul: JUI-F leader Maulana Fazlur Rehman arrives in Kabul for talks with senior Afghan Taliban leaders on regional security. Fazlur Rehman is leading a nine-member delegation for discussions in Kabul. [Dawn]
- Pakistan's Public Debt Soars: Rs 908 Billion Increase in November - In November, the interim government of Pakistan increased public debt by Rs 908 billion, the third-highest monthly rise in the fiscal year, driven by increased expenditures. The overall debt reached Rs 63.4 trillion by November 2023, according to the State Bank of Pakistan. [ET]
- UN Forecasts Modest Growth for Pakistan in 2024-2025: The United Nations anticipates "modest economic growth" of 2% in Pakistan in 2024, with an expected improvement to 2.4% in 2025, according to its latest report, 'World Economic Situation and Prospects (WESP) 2024,' released on Friday. The report notes that Pakistan's economy registered a growth of 1.7% in 2023, and it projects a 2% expansion in 2024. [BR]
- Pakistan Injects Rs 1.25 Trillion to Address Funding Gaps: Pakistan's central bank injected Rs 1.25 trillion into banks for up to 28 days to overcome fund shortages and meet the government's financing needs. The Karachi Interbank Offered Rate (Kibor) dropped over three percentage points to 21.38% on Friday, down from its recent peak of 24.70%. [ET]
- PSX Hits Record High: $65M Inflow, New Company Listing Expected - In December, the equity market achieved a milestone with a record inflow of $65 million through the Special Convertible Rupee Account (SCRA), pushing the Pakistan Stock Exchange (PSX) to an all-time high. Following its recognition as the world's best-performing stock market in the second half (Jul-Dec) of 2023, the PSX is set to welcome the first new company to its trading platform in the New Year 2024. [Dawn] [ET]
- Paypal for Freelancers, National Space Policy Approval: The government has fulfilled freelancers' long-standing demand by allowing them to route remittances through Paypal. Additionally, the Cabinet approved the National Space Policy, permitting private-sector companies to use low-orbit satellites for satellite communication services. [BR]
INTERNATIONAL – OVERVIEW & MARKET OUTLOOK
- Israeli Genocide: The Israeli army continued airstrikes in the Palestinian territory, marking the fourth month of the Gaza war, with at least 113 people killed in the past 24 hours, according to the health ministry in the Hamas-run territory. U.S. top diplomat Antony Blinken was in the Middle East to prevent further escalation, and two journalists were among the victims in Rafah when their car was struck. [BR] [Dawn] [Dawn]
- Kunar River Reservoir Plans: Tensions between Pakistan and Afghanistan's Taliban leadership are escalating as Afghanistan plans to build water reservoirs along the Kunar River, causing fresh concerns in Islamabad. [ET]
- Sheikh Hasina Secures Fifth Term as Awami League Wins Majority: Bangladesh's Prime Minister Sheikh Hasina has won re-election for a fifth term as her Awami League party secured over 50% of the seats. The victory was declared by an election official amid ongoing vote counting, while the opposition Bangladesh Nationalist Party boycotted the election, labeled a "terrorist organization" By Sheikh Hasina. [Dawn]
- 2023: Global Food Prices Drop 13.7%, FAO Reports 10% Lower Index - Global food prices, with a 15.4% decline in the FAO's cereals price index, dropped 13.7% in 2023 due to improved supply conditions, in contrast to the previous year's increase prompted by Russia's invasion of Ukraine. The UN's Food and Agriculture Organization reported a 10% lower global price index for 2023 compared to 2022. [BR] [ET]
- Saudi Arabia Cuts Crude Price to 27-Month Low: Saudi Arabia, the top oil exporter, has cut the February price of its Arab Light crude to Asian customers, reaching the lowest level in 27 months due to competition from rivals and concerns about supply overhang. The official selling price was slashed by $2/barrel to $1.50/barrel over Oman/Dubai quotes. [BR]
- Pakistani Startups: 70% Funding Drop in 2023 as startups raised slightly over $70 million. [The News]
- SECP Plans Micro-Insurance Tied to Government Programs. [BR]
- Surge in Influenza Cases Hits Karachi, Triples Compared to Last Season - The increasing cases of influenza in the city, characterized by symptoms like cough, fever, chest tightness, and headaches, have been attributed to various factors, with poor air quality being identified as a significant contributor. [Dawn]
- Salaried Class Tops Tax Contributions Amid Inflation: Pakistan's salaried class, facing inflation, remains the fourth-largest income tax contributor, paying Rs 158 billion in the first half of this fiscal year. This amount is now 243% higher than the tax contribution of the wealthiest subsidized exporters, with a 38% increase in income tax collection from the salaried class in the July-December period, according to the FBR. [ET]
- Opinion: The Ongoing Digital Payment Spurt - “Online transactions through banks, microfinance banks, and EMIs clocked in at 561 million for Q1-FY24 as against 141.3 million done over the counter” - By Mutaher Khan [Dawn]
- Opinion: Carbon Credits & Green Growth: Is Pakistan Ready? - “As one of the top ten countries most severely impacted by climate change, Pakistan has experienced devastating floods and heatwaves in recent years. A prolonged decline in annual rainfall characterized the early 20th century, but since 1960, a slight increasing trend has prevailed.” - By Ali Asad Sabir [ET]
- Opinion: Islamic Banking — Need of the Hour - “As a global concept, Islamic banking has established itself on a sound and solid footing. Almost every country with a substantial financial base offers Islamic banking operations parallel to conventional financing. However, the situation in Pakistan is rather complex. Pakistan’s constitutional structure makes it compulsory for the state to shift from conventional banking to Islamic banking after the unanimous decision of the Federal Shariat Court on April 28, 2022.” - By Kamran H Mushtaq [Dawn]
