Tobacco Tax, EU Exports, Smog in Punjab, IMF Pak Review, COP29, FAO Agri Food Costs.

TOPLINE

• The Federal Board of Revenue collected Rs 237 billion in federal excise duty from cigarettes in 2023-24, a 70% increase from Rs 142 billion in 2022-23. Additionally, sales tax from cigarette sales rose by 54.3% to Rs 60.664 billion, while the overall FED collection increased by 56.1% to reach Rs 577.4 billion in 2023-24.
• Pakistan’s exports to the EU grew by 7.88% to $2.204 billion in Q1 FY25, up from $2.043 billion in the same period last year, largely due to increased demand across various European regions. Pakistan received a record $3.1 billion in remittances in October 2024, the highest monthly inflow for FY25, marking a 6.7% increase from September 2024.
• Due to worsening smog, Punjab has closed parks, zoos, and museums in 17 districts, including Lahore, until November 17, with penalties for violations. Meteorologists predict worsening conditions next week. The Punjab Environment Department has mandated air purifiers in malls and plazas.
• Finance Minister Aurangzeb acknowledged a trust deficit with the IMF but confirmed that IMF staff would visit Pakistan next week in an untimed review of the $7 billion Extended Fund Facility (EFF). Pakistan has requested China to reschedule $3.4 billion in official and guaranteed debt for 2 years to address a $5 billion external financing gap.
• 2024 is set to be the hottest year on record, with temperatures surpassing 1.5°C above pre-industrial levels. This comes ahead of UN climate talks at COP29, amid a record hot year and Donald Trump's re-election as US president.
• A study by the FAO reveals that hidden costs in global agrifood systems total $12 trillion annually, with 70% ($8.1 trillion) stemming from unhealthy diets. Global food prices reached their highest level in 18 months in October, with the FAO Food Price Index rising 2% to 127.4 points. Vegetable oil prices surged by 7.3%, though meat prices declined slightly by 0.3%.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Cigarette Tax Revenue Surges: The Federal Board of Revenue collected Rs 237 billion in federal excise duty from cigarettes in 2023-24, a 70% increase from Rs 142 billion in 2022-23. Additionally, sales tax from cigarette sales rose by 54.3% to Rs 60.664 billion, while the overall FED collection increased by 56.1% to reach Rs 577.4 billion in 2023-24. [BR]
• Ghee, Oil Prices Rise - USC Cuts Sugar Price: First-grade ghee and oil prices rose by 54-60 rupees, now at 559 rupees/kg. Second-grade ghee costs 500-530 rupees, and second-grade oil is 512-540 rupees/liter. The Utility Stores Corporation cut sugar prices by 13 rupees, now at 140 rupees/kg, after a 17-rupee reduction from mills. The USC's cost for sugar was about 152 rupees/kg. [ET]
• Wheat Production Boost Package: Punjab Chief Minister Maryam Nawaz Sharif has announced a package to boost wheat production, offering 1,000 green tractors and 1,000 land levelers for free to farmers. The tractors will be given to those cultivating over 25 acres of land, with distribution through balloting. The CM emphasized the government's full support for Punjab's farmers. [ET]
• Pakistan EU Exports Rise: Pakistan’s exports to the EU grew by 7.88% to $2.204 billion in Q1 FY25, up from $2.043 billion in the same period last year, largely due to increased demand across various European regions. This resurgence follows a 3.12% decline in exports to $8.240 billion in FY24, despite Pakistan’s GSP+ status allowing duty-free access to European markets. [Dawn]
• Attock Refinery to Boost Fuel Oil Exports in FY 25: 80,000 tons of light suphur fuel oil was exported by Attock Refinery in FY 24. For FY 25, the company expects shipments to reach 120k tons, according to AHL Research. [ET]
• Crude Oil Export: Rs 6.88 billion was the value of petroleum crude exported in the Jul-Sept quarter, compared to zero exports last year. [ET]
• Experts Target $1B Maize Exports: Experts at a TDAP session emphasized Pakistan's potential to exceed a billion dollars in maize exports by boosting strategic investments and processing. The focus was on expanding exports, particularly to the Philippines, amid rising global demand. [BR]
• Nestlé Pakistan Targets $50 Million Export Goal by 2030: Nestlé Pakistan has announced its goal to earn $50 million in foreign exchange for Pakistan by 2030, expanding its packaged food exports. The company showcased its growth, reaching 26 countries and generating $23 million in 2024. Federal Minister Rana Tanveer Hussain highlighted the importance of exports as Pakistan's economy recovers and anticipates further growth in exports over the next two years. [Dawn]
• KP Hosts First-Ever Horse & Cattle Show: Khyber Pakhtunkhwa's first-ever three-day horse and cattle/cultural show began at Sher Khan Stadium in Peshawar, running from November 8 to 10. Inaugurated by Chief Minister Sardar Ali Amin Gandapur, the event, organized by the Khyber-Pakhtunkhwa Sports Department, was attended by various officials and spectators, featuring diverse activities. [ET]

ENERGY - WEATHER, WATER & POWER

• Punjab Closes Parks & Zoos Due to Smog: Due to worsening smog, Punjab has closed parks, zoos, and museums in 17 districts, including Lahore, until November 17, with penalties for violations. Meteorologists predict worsening conditions next week. Lahore's AQI reached 290, with other cities also facing poor air quality. The Punjab Environment Department has mandated air purifiers in malls and plazas in areas like Lahore, Faisalabad, Multan, and Gujranwala, with enforcement in high-traffic areas. [Dawn] [ET]
• Customs Duty Boosted by Petroleum Vehicles: The petroleum sector and imported vehicles were the main contributors to customs duty in 2023-24, with collections increasing by 18.5% to Rs 1,104.1 billion, up from Rs 931.7 billion in the previous year. Customs duty accounted for around 12% of FBR's total revenue in 2023-24. [BR]
• CCP Recommends DISCO Privatization: The Competition Commission of Pakistan (CCP) has recommended privatizing power distribution companies (DISCOs) or using public-private partnerships (PPPs) to tackle issues like high losses, revenue leakages, and electricity theft. The CCP report highlights inefficiencies in the power sector due to state-owned monopolies and calls for reforms to address infrastructure problems and circular debt. [BR] [The News]
• NTDC Split into Three Entities: Energy Minister Awais Khan Leghari announced the dissolution of NTDC, splitting it into three entities: the Independent System Market Operator, the National Grid Company, and EIDMC. He criticized NTDC for causing challenges in the power sector, with some officials involved in power theft. [Dawn]
• Winter 2024 Electricity Relief Package: Prime Minister Shehbaz Sharif announced a three-month electricity relief package for winter 2024, offering up to Rs 26.7/unit for domestic, Rs 15.5 for industrial, and Rs 22.71 for commercial consumers. The package, effective from December 2024 to February 2025, will provide savings of Rs 11.42 to Rs 26/unit for domestic consumers exceeding 200 units. [ET] [The News]
• PPL Clarifies Sui Lease Execution: Pakistan Petroleum Limited (PPL) clarified that the execution of the Sui development and production lease (D&PL) depends on signing the Sui petroleum concession agreement and meeting the lease's terms. The company addressed recent reports based on approvals from the federal cabinet and the Economic Coordination Committee (ECC). [The News]
• KP Approves Rs 33 Billion for Development Projects: Khyber Pakhtunkhwa has approved over Rs 33 billion for development projects, including financial aid, land for graveyards, scholarships for minorities, and the construction and upgrade of schools in Upper Swat. The decision was made at the seventh PDWP meeting, chaired by Additional Chief Secretary Ikramullah Khan, in line with Chief Minister Sardar Ali Amin Khan Gandapur's development vision. [ET]
• Protest at Save Sindh Conference Against Canal Project: At the 'Save Sindh’s National Resources' conference, participants opposed the Irsa Act amendment and the six-canal project, urging land redistribution, implementation of the 1991 Water Accord, and release of 10 MAF water at Kotri. Dr. Qadir Magsi led a sit-in in protest, criticizing the PPP for harmful policies, particularly under Asif Ali Zardari's presidency. [Dawn] [Dawn]
• PMD Warns Farmers of La Ni?a Impact: The Pakistan Meteorological Department has warned farmers in KP, Gilgit-Baltistan, and Azad Kashmir of reduced soil moisture due to below-normal rainfall, potentially affecting wheat sowing. The La Ni?a phenomenon is expected to continue through January, impacting irrigation and power generation. [Dawn]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• Pakistan Records $3.1 Billion Remittances: Pakistan received a record $3.1 billion in remittances in October 2024, the highest monthly inflow for FY25, marking a 6.7% increase from September 2024. This was a 24% year-on-year rise compared to October 2023, with major contributions from Saudi Arabia ($766.7 million), UAE ($620.9 million), the UK ($429.5 million), and the US ($299.3 million). [BR] [ET]
• Gandapur Calls for PTI "Do-or-Die" Agitation: Khyber Pakhtunkhwa CM Ali Amin Gandapur urged PTI workers to prepare for a "do-or-die" agitation for Imran Khan's release. Speaking at a public meeting near Swabi, Gandapur announced that the jailed leader would give the final call for action later this month. The event, initially set for Peshawar, was moved to a more accessible location for workers from across the country. [Dawn]
• Aurangzeb Acknowledges IMF Trust Deficit: Finance Minister Muhammad Aurangzeb acknowledged a trust deficit with the IMF but confirmed that IMF staff would visit Pakistan next week for a review of the $7 billion Extended Fund Facility (EFF). He also stated that the IMF was consulted before announcing the power relief scheme, "Bijli Sahulat," during his participation in the 10th Islamabad Literature Festival. [BR]
• Shehbaz Sharif Attends Arab-Islamic Summit: Prime Minister Shehbaz Sharif departed for Riyadh to attend the Arab-Islamic Summit, where he will address the summit and discuss regional issues, including the situation in Gaza. He is also expected to hold bilateral meetings with global leaders on the sidelines of the event, which will be attended by heads of state from Arab League and OIC member countries. [Dawn]
• Private Sector Advances Surge in FY25: Private sector advances surged to Rs 447 billion in the first four months of FY25, up from a net debt reduction of Rs 153 billion last year. This shift is driven by surplus government liquidity and lower interest rates, allowing cautious borrowing after a Rs 2.7 trillion injection from the SBP. [Dawn]
• Pakistan's Tax-to-GDP Ratio Improves Slightly: Pakistan's tax-to-GDP ratio increased slightly to 8.77% in FY24 from 8.54% in FY23, but remains well below the necessary threshold for economic growth and poverty reduction, as suggested by the World Bank. The country's tax capacity is estimated at 22.3% of GDP, far exceeding the current ratio. [MG]
• Suicide Bombing at Quetta Railway Station Kills 26: A suicide bombing at Quetta railway station on Saturday killed at least 26 people, including 16 security personnel, and injured 61 others. The bomber detonated explosives among a crowd waiting for the Peshawar-bound Jaffar Express. Fifteen died on the spot, and 11 others later succumbed to injuries. Many victims remain in critical condition, and the death toll may rise. [Dawn]
• Pakistan Seeks Debt Rescheduling from China: Pakistan has requested China to reschedule $3.4 billion in official and guaranteed debt for two years, crucial for addressing a $5 billion external financing gap identified by the IMF. The debt, mostly from the Chinese Exim Bank, includes loans to State-Owned Enterprises, making up one-third of the total repayments. [ET]
• Pakistan, Malaysia to Renegotiate FTA: Pakistan and Malaysia will renegotiate their Free Trade Agreement (FTA) to boost economic ties. Pakistan's Commerce Minister, Jam Kamal Khan, will lead the talks. The announcement came during an event in Islamabad attended by over 50 Pakistani industry leaders, following Malaysian Prime Minister Anwar Ibrahim's visit to Pakistan. [ET]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• COP29: 2024 is set to be the hottest year on record, with temperatures surpassing 1.5°C above pre-industrial levels. October was the second hottest, following severe climate events. The Copernicus agency urges action at COP29, highlighting climate change's growing threat to global health, including heat, extreme weather, pollution, and disease. This comes ahead of UN climate talks, amid a record hot year and Donald Trump's re-election as US president. [Dawn] [Dawn] [Dawn]
• FAO - $12 Trillion Hidden Cost in Agrifood Systems: A study by the FAO reveals that hidden costs in global agrifood systems total $12 trillion annually, with 70% ($8.1 trillion) stemming from unhealthy diets linked to non-communicable diseases like heart disease and diabetes. Environmental degradation and social inequalities contribute less to the total cost. [Dawn]
• Global Food Prices Hit 18-Month High: Global food prices reached their highest level in 18 months in October, with the FAO Food Price Index rising 2% to 127.4 points. Vegetable oil prices surged by 7.3%, while sugar, dairy, and cereals also saw increases, though meat prices declined slightly by 0.3%. [BR]
• Israeli Genocide: Israeli air strikes in Gaza, Lebanon, and Syria killed 77 people on Sunday, including 30 in Gaza. A strike in Jabalia killed 25, including 13 children, while another in Gaza City’s Sabra neighborhood killed five, with more missing under rubble. The UN called Gaza under "siege." UN High Commissioner Volker Turk called for accountability and urged Israel to comply with international law, condemning the toll on both Israelis and Palestinians. [BR] [ET]
• Record Drone Attacks in Russia-Ukraine Conflict: Russia and Ukraine launched record drone attacks on each other overnight, with Ukraine reporting 145 drones fired by Russia, the highest in a single night. The conflict's future is uncertain following US President-elect Donald Trump's comments about potentially striking a deal with Russian President Vladimir Putin, which could shift the US's support for Ukraine. [Dawn]
• S&P 500, Dow Rise on Trump Victory Hopes: The S&P 500 and Dow rose on Friday, fueled by optimism over a Trump victory and the prospect of a business-friendly agenda, along with expectations of an interest-rate cut. Both indexes are set for their best week since November, while the Nasdaq is on track for its best week in two months. [BR]
• Oil Prices Drop Amid Supply Concerns: Oil prices dropped over 2% on Friday, as fears of prolonged supply disruptions from Hurricane Rafael in the US Gulf of Mexico eased, and China's economic stimulus failed to impress traders. US West Texas Intermediate futures fell 2.8% to $70.35/barrel, while Brent crude dropped 2.3% to $73.86/barrel, as forecasts showed reduced risks to oil production from the storm. [Dawn]

OPINION(S) & REMAINDERS

• Pakistan Enhances Trade with China: The government has created 20 new posts in the Trade Section of Pakistan's Mission in China to enhance exports, attract foreign direct investment, and facilitate the relocation of Chinese industries to Pakistan. In 2023-24, Pakistan's exports to China were $2.56 billion, while imports totaled $14.51 billion, resulting in a trade deficit of about $12 billion. [BR]
• VPN Access Restricted in Pakistan: Multiple internet users in Pakistan reported restricted access to VPNs and poor internet connectivity on Sunday, with VPNs being used to access banned platforms like X. Despite earlier PTA statements denying VPN blocks, users noted that VPN speeds were slowed and access restricted, amid ongoing concerns over the platform's use for national security reasons. [Dawn]
• Gender Gap in Voter Enrolment Narrows Across Pakistan: The number of districts with a gender gap over 10% in voter enrolment has dropped from 80 to 30 in three years. KP, Balochistan, and Sindh saw improvements, with fewer districts having women voters below 45%. Punjab now has all 41 districts with over 45% female voters, and 12 districts exceed 47%. [Dawn]
• Opinion: To Breathe or Not to Breathe? - “The onset of smog season in October results in a decline in air quality across Punjab, on either side of the Pakistan-India border. Lahore and Delhi are traditionally the worst affected, with the Pakistani city recording unprecedented pollution levels. The air quality index, which measures a range of pollutants, exceeded 1,000 in Lahore last week. It is considered unhealthy at the level of 100 and hazardous when it is 300 or more according to data from IQAir, an air quality monitor. The situation, in Lahore and elsewhere in Pakistan`s Punjab, is being made worse by the political and policy inertia of the Punjab government.” - By Sheheryar Khan [Dawn]