US-China Tensions, Flour Crisis & Inflation, Elections Issue & Imran Khan Bail, Foreign Investment, Textile Woes, Rain Forecast, European Strikes

TOPLINE

• Chinese Premier Li Qiang vowed that China will open wider to foreign companies “regardless of changes to the global environment,” at the 3-day China Development Forum. Former Taiwan President Ma Ying-jeou made history on Monday as the first Taiwanese leader to visit mainland China since 1949. The US cracked down on Chinese crypto giant, Binance, with The Commodity Futures Trading Commission alleging in federal court in Chicago that Binance broke American derivatives rules as it went on to become the globe’s largest trading platform.
• People loot flour trucks amid shortages; protests break out in multiple districts over unavailability. High food inflation at 42% pushing consumers to turn to cheaper but superior quality Iranian products in twin cities.
• The Supreme Court is concerned over the legality of the EC's order postponing elections in Punjab until October 8. Moreover, Imran Khan has been granted interim bail by the Islamabad High Court in 7 cases.
• Foreign investment drops in Pakistan; repatriation of dollars by foreign companies falls by 88% during the first 8 months of FY23, while Foreign Direct Investment declines by 40% from July to Feb.
• Khalid Siraj Textile Mills Ltd to close until May 31 due to import restrictions, political unrest, and inflation while the government of Pak has been criticized for not taking urgent action on the drop in the country's cotton production.
• Pakistan will witness a rainy spell from Tuesday March 28 to March 31, 2023 and it may damage wheat crops with hailstorm and gusty winds expected.
• European countries are facing a wave of strikes and protests due to high energy prices, a wider rise in living costs, and in France, an increase in the retirement age with German airports and transport facilities coming to a stop.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

• Food Inflation Drives Smuggling: Due to high food inflation reaching up to 42% in urban areas of Pakistan, consumers are turning to cheaper, "smuggled" Iranian products, such as oil and cheese, which are considered to be of high quality and readily available in Rawalpindi and Islamabad. [Dawn]
• Gwadar Port Receives Wheat: Gwadar Port in Pakistan has received and processed 200,000 metric tonnes of wheat imports from Russia within 25 days, with the remaining 250,000 metric tonnes of wheat yet to be processed, according to a China Overseas Ports Holding Company (COPHC) official. Of the nine vessels carrying the wheat, four have already arrived at the port. [ET]
• Flour Looting in Pakistan: People waiting for free flour looted flour trucks in the provincial capital and Dera Ismail Khan on Monday while residents of Bannu, Lakki Marwat, Khyber and Abbottabad took to streets to protest the unavailability of the commodity in their districts.? In Peshawar, a flour looting incident took place near a park on Ring Road where hundreds of people including a large number of women were waiting to receive free flour. [Dawn]
• Jirga Bans Women to get Flour: At a time when provision of free wheat flour has provided a much-needed relief to the inflation-hit people across the country despite widespread mismanagement and fatal stampedes, a Jirga of Shalobar sub-clan of Afridi tribe has banned the visits of women to the distribution points in Khyber district. [ET]
• Unity Foods Invests in Subsidiary: Unity Foods Limited will make an equity investment of almost Rs5 billion in its subsidiary Sunridge Foods (Private) Limited, which makes sugar and rice among other products, the company shared in a notice to the Pakistan Stock Exchange (PSX) on Monday. [BR]
• PBC Demands Army Land Withdrawal: The Pakistan Bar Council (PBC) is demanding the immediate withdrawal of a notification that handed over 45,267 acres of agricultural land to the Pakistan Army. The PBC expressed its serious concerns over the purported notification and demanded that it be rescinded. [BR]
• Textile Mill Halts Operations: Khalid Siraj Textile Mills Ltd has announced that it will close operations until May 31 due to import restrictions, political unrest, and an unchecked increase in the dollar rate, which has led to increased inflation, undermined the rupee, driven up cotton prices, and harmed business confidence. This decision makes KSTML, one of several firms that have shut down due to a lack of dollars to pay for the import of industrial raw materials. [Dawn]
• Cotton Production Crisis: The Pakistan government has been criticized for not taking urgent action on the country's decreasing per acre cotton production, which has dropped to half the regional average. While the ECC has taken note of the issue and directed the ministry to develop a support price mechanism, there has been no sense of emergency, leading to concerns that the government is not treating the situation seriously. [BR]
• Ramadan Markets Established in Sindh: The Sindh government has established about 100 markets in the province to provide essential items at discounted rates during the holy month of Ramadan, according to Sindh Minister of Universities and Boards Muhammad Ismail Raho. The minister also stated that action against hoarders and profiteers is ongoing, with fines of over 2.2 million rupees imposed on 512 illegal profiteers and hoarders across the province. [RP]

AGRI-INPUTS, WEATHER, WATER & POWER

• Countrywide Rainy Spell: Another countrywide rainy spell is expected from today (Tuesday) through March 31, 2023 with a danger of gusty winds and hailstorm to strike the standing wheat crops, the Met Office said on Monday.? It warned that the expected rain-wind-thunderstorm with a hailstorm in occasional gaps from Tuesday (today) till March 31 may cause damage to the loose structures and standing crops like wheat. [BR]
• Approval for Reko Diq Settlement: The ECC of the Cabinet has given its approval to pay a mark-up of Rs 6.238 billion on a short-term finance facility of Rs 65 billion by the Finance Division from March 31, 2022, to December 30, 2022, for the purpose of settling the Reko Diq project dispute. Pakistan's Prime Minister, Shehbaz Sharif, has instructed the authorities to form a project support team for the Reko Diq copper-cum-gold project. The project is owned 50% by Barrick Gold Corporation of Canada, 25% by three federal state-owned enterprises, and 25% by Balochistan. [The News] [Dawn]
• Furnace Oil Stocks Rise: Furnace oil (FO) stocks in Pakistan have risen to 632,000 MT due to the refusal of power plants to stockpile the fuel and poor export feasibility because of its low price in the global market. Power plants are not lifting furnace oil as electricity generation is mainly coming from hydel and nuclear sources, which have cut the demand for fuel oil. [The News]
• Karot Power Company Seeks Funds: Karot Power Company (Pvt) Limited (KPCL) has sought an amount of Rs 22.703 billion from Central Power Purchasing Agency–Guarantee (CPPA-G) by April 10, 2023 to settle its liabilities including principal and interest. [BR]

AGRI UPDATES & PAKISTAN POLICY

• Supreme Court Questions Election Delay: The Supreme Court of Pakistan has raised concerns over the legality of the Election Commission of Pakistan's order postponing elections in Punjab until October 8, s a blockade to the enforcement of fundamental rights. The court has sought assurances from the government and the Pakistan Tehreek-e-Insaf (PTI) for transparent and peaceful elections, and has issued notices to the federal government, ECP, and KP governor to respond to the petitioner's legal points. [The News] [The News] [Dawn] [Dawn]
• Imran Khan Granted Interim Bail: Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan has been granted interim bail by the Islamabad High Court in seven cases related to clashes at the judicial complex until April 6. Khan's plea urged the court to prevent the federal government from arresting him in these cases, stating that they have been filed for political revenge. [The News] [ARY]
• Foreign Investment Drops in Pakistan: According to SBP data, repatriation of dollars by foreign companies fell by 88% during the first 8 months of the current fiscal year due to low profits and stringent restrictions on outflows from the country. The data also showed that foreign direct investment (FDI) decreased by 40% during the July-February period of FY23 due to the government's policy of curbing dollar outflows. he State Bank of Pakistan has reported that repatriation of profit and dividend by foreign investors fell by 80% or $921 million during the first eight months of this fiscal year (FY23) due to the economic slowdown. Analysts have attributed the decline to the poor economic conditions in the country, particularly the foreign exchange crisis, which has led to restrictions on imports to control the trade deficit.? [Dawn] [BR]
• Pakistan's 3G & 4G users: According to PTA data, the number of 3G and 4G users in Pakistan increased by 1.35 million from 122.81 million in January 2023 to 124.16 million in February 2023. The total number of cellular subscribers also increased from 192.78 million in January 2023 to 193.85 million in February 2023. [BR]
• Tax Evasion: The Federal Board of Revenue (FBR) in Pakistan has acknowledged that it lacks the capacity to analyze big data to identify tax evasion. Despite establishing functional data links with various state departments, the FBR is currently unable to analyze big data to detect tax evasion. [BR]
• PBS Requests Census Funds: The Pakistan Bureau of Statistics has requested the release of the remaining Rs12 billion to complete the 7th Housing and Population Census in the country. The request has been sent to the Planning Ministry and will require approval from the ECC for the funds to be released. [BR]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

• Silicon Valley Bank Acquisition: First Citizens Bank will acquire substantial holdings of Silicon Valley Bank, under a transaction overseen by the US Federal Deposit Insurance Corporation, according to a news release from First Citizens. The acquisition involves the purchase of "substantially all loans and certain other assets, and assume all customer deposits and certain other liabilities of Silicon Valley Bridge Bank." [BR] [Al Jazeera]
• Crypto Crackdown: The US took its most forceful move yet to crack down on crypto exchange Binance and its chief executive officer Changpeng Zhao. The Commodity Futures Trading Commission alleged in federal court in Chicago that Binance and its CEO routinely broke American derivatives rules as the firm grew to be the world’s largest trading platform. Binance should have registered with the agency years ago and continues to violate the CFTC’s rules, according to the regulator. [Bloomberg] [Bloomberg]
• Oil Prices: Oil prices rose $2 on Monday after Iraq was forced to halt some crude exports from its semi-autonomous Kurdistan region, with an additional boost from steps to stem a potential banking crisis that could have hit oil demand. Brent crude futures were up $2.27, or 3%, at $77.26 a barrel by 12:50 p.m. ET (16:50 GMT). West Texas Intermediate US crude rose $2.39, or 3.5%, to $71.68. Brent gained 2.8% last week while WTI rebounded by 3.8% as jitters in the banking sector eased. [BR] [ET]
• Netanyahu Halts Judicial Overhaul: Israeli Prime Minister Benjamin Netanyahu announced that he would pause a judicial overhaul bill that had caused political division and mass protests in the country, following a general strike. The decision was made "out of a sense of national responsibility" and to prevent a rift.Israel's top trade union chief called a general strike over the hard-right government's controversial judicial reforms. The strike came after Prime Minister Benjamin Netanyahu sacked his defence minister who had called for a stop to the overhaul. [NDTV] [WP] [BR] [France 24]
• First Muslim Scottish Leader: Humza Yousaf became the first ethnic minority and Muslim to win the Scottish National Party's fiercely contested leadership contest on Monday. In his acceptance speech, he paid tribute to his Pakistani grandparents for migrating to Scotland from Mian Channu over 60 years ago. [Dawn] [GT]
• Suicide Attack in Kabul: A suicide attack near Afghanistan's foreign ministry in Kabul on Monday resulted in the death of 6 civilians and injuries to several others, according to the interior ministry. While security has improved since the Taliban took power, the Islamic State group has become a growing threat. [Dawn]
• Saudi Aramco Expands Investment: Saudi Aramco raised its multi-billion-dollar investment in China by finalizing and upgrading a planned joint venture in northeast China and acquiring an expanded stake in a privately controlled petrochemical group. [ET]
• China Development Forum: Chinese Premier Li Qiang vowed that China will open wider to foreign companies “regardless of changes to the global environment.” Li made the pledge at the three-day China Development Forum, which is hosting about 70 foreign executives, including Apple’s Tim Cook, Bridgewater’s Ray Dalio and Deloitte’s Sharon Thorne. [Bloomberg] [PT]
• Former Taiwan President Visits China: Former Taiwan President Ma Ying-jeou made history on Monday as the first Taiwanese leader to visit mainland China since the Communist revolution in 1949. During his visit, Ma expressed his hope to bring about peace and improve relations between Taiwan and mainland China, but the move has been criticized by the ruling Democratic Progressive Party. [Reuters] [Al Jazeera]
• Discovery of Potential Reservoir: Scientists have discovered water trapped inside glass beads scattered across the moon, indicating the existence of a potential reservoir of water for future human activities on the lunar surface. Although the moon was previously believed to be dry, recent missions have demonstrated the presence of water both on its surface and inside minerals. [Al Jazeera] [France 24] [Geo]
• Protests & Strikes Across Europe: European countries are facing a wave of strikes and protests due to high energy prices, a wider rise in living costs, and in France, an increase in the retirement age. In Germany, a large walkout for higher wages caused airports and bus and train stations across the country to come to a standstill, while in France, protests over pension plans have become more violent, leaving some petrol stations short of fuel. Meanwhile, in Britain, pay disputes across several sectors are ongoing, with strikes in schools, on railways, and in hospitals. [Reuters]

PAKISTAN - REMAINDERS

• ECC Defers Handover of Three Airports. [ET]
• The Sindh Government Asks ECP to Immediately Hold Mayoral Elections in the Province. [Dawn]
• Opinion: Land Reforms - “Following its struggle for freedom from the Dogra rulers and accession to Pakistan, Gilgit-Baltistan experienced a low point when, under the infamous Karachi Agreement, it was categorized as a disputed territory of Kashmir state. This subjected the region to an indifferent bureaucratic structure and constitutional limbo. Isolated due to its remote location, GB’s strategic importance only became apparent when China smashed through the lofty mountains to build the Karakoram Highway.” - By Afzal Ali Shigri [Dawn]