PAR News - Tues, 23 Apr 2024

TOPLINE

• Pakistan and Iran have committed to boosting bilateral trade to $10 billion within the next five years through the signing of eight agreements and memorandums of understanding across various sectors.
• Finance Minister Aurangzeb met with foreign investors in Dubai to boost investment ties between the UAE and Pakistan, focusing on sectors like IT, renewable energy, and infrastructure.
• South Punjab farmers are struggling as the government hasn't started wheat procurement, despite setting a support price of Rs 3,900 per maund. With local market prices even lower.
• The upcoming cotton crop season is bleak due to adverse weather, water shortages, and government inaction. Sindh's attempt to replicate last year's success with early sowing was thwarted by heavy rains, leading to crop re-cultivation.
• There's uncertainty about the timing of the IMF's approval for Pakistan's next $1.1 billion tranche, with both parties aiming for consideration by the end of April.
• Israeli troops launched a surprise raid into an eastern section of Khan Yunis, residents reported on Monday, forcing people who had returned to abandoned homes in the southern Gaza Strip's main city to flee once again.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Cotton Prices Stable in Sindh & Punjab: Cotton rates in Sindh and Punjab ranged from Rs 20,000 to Rs 22,000 per maund, with phutti prices in Punjab observed between Rs 9,500 and Rs 10,000 per 40 kg. The Spot Rate remained steady at Rs 20,800 per maund, while Polyester Fiber was priced at Rs 367 per kg. [BR]
• Gloomy Outlook for Cotton Crop Season: The upcoming cotton crop season is bleak due to adverse weather, water shortages, and government inaction. Sindh's attempt to replicate last year's success with early sowing was thwarted by heavy rains, leading to crop re-cultivation. Punjab adopted a similar strategy but reduced lint acreage from 5.2 to 4 million acres this year despite Sindh's previous success. [Dawn]
• Punjab Farmers Struggle: Delayed Wheat Procurement - South Punjab farmers are struggling as the government hasn't started wheat procurement, despite setting a support price of Rs 3,900 per maund. With local market prices even lower, farmers face a difficult situation. The Punjab Food Department's procurement target for 2024-25 is set at two million metric tonnes, half of the previous year, due to a 20 million metric tonne carryover stock. [Dawn]

ENERGY - WEATHER, WATER & POWER

• Met Office Warns of Nationwide Rainy Spell: A new rainy-thunderous spell is expected to cover the entire country from the night of April 24 through next Monday, as per the Met Office's alert to growers amidst harvesting. Isolated downpours, along with rains, winds, and thunderstorms, are forecasted from April 24 night through April 29. [BR]
• Enhancing Pakistan-Iran Trade Relations: Pakistan and Iran have committed to boosting bilateral trade to $10 billion within the next five years through the signing of eight agreements and memorandums of understanding across various sectors. Prime Minister Shehbaz Sharif emphasized the significance of the discussions held between the two nations, highlighting Iran's historical support for Pakistan since its inception in 1947. [BR] [Dawn] [ET]
• Amnesty Scheme Ends, PIA Privatization Ahead: Finance Minister Muhammad Aurangzeb announced the cessation of amnesty schemes, stressing tax compliance, and outlined plans for PIA privatization by July and discussions for airport privatization with Turkey and Europe. He highlighted deficit reduction, securing international funding, and expressed optimism about IMF support and assistance from Emirati banks. [The News]
• Finance Minister Strengthens UAE Ties: Finance Minister Aurangzeb met with foreign investors in Dubai to boost investment ties between the UAE and Pakistan, focusing on sectors like IT, renewable energy, and infrastructure. He highlighted Pakistan's competitive advantages and the support offered by the Special Investment Facilitation Council to ensure a smooth investment process. [BR]
• Government Aims to Recover Rs 1 Trillion Debt: The federal government is tasked with recovering over Rs 1 trillion from chronic defaulters of five power Distribution Companies (Discos) in Sindh, Khyber Pakhtunkhwa (KP), and Balochistan. Minister for Power, Sardar Awais Ahmad Khan Leghari, revealed a receivable stock of Rs 1.9 trillion as of February 28, 2024, with circular debt reaching about Rs 2.6 trillion. [BR]
• Shawal-l Discovery: MARI's Oil Triumph - Mari Petroleum Company Limited (MARI) made its inaugural oil discovery, Shawal-l, in the Mari Development and Production Lease (D&PL) in Sindh. The well, drilled to 1,136 meters into the Ghazij Formation, produced 1,040 barrels of crude oil with a 30-degree API gravity and 2.5 MMSCFD of associated gas during testing, at a wellhead flowing pressure of 953 Psi. [The News] [Dawn]
• Attock Refinery Halts Unit Amid Diesel Surplus: Attock Refinery Limited has closed its primary crude distillation unit, with a capacity of 34,000 barrels per day, due to a surplus of diesel stocks resulting from reduced domestic consumption, attributed to rampant smuggling of Iranian fuel oil in the local market, according to CEO Adil Khattak. [The News]
• Shanghai Electric Withdraws K-Electric Bid: Shanghai Electric Power Company has withdrawn its offer to acquire up to 66.4% of K-Electric, Pakistan's sole electricity generator, transmitter, and distributor for Karachi and its adjoining areas, according to a notice from Arif Habib Limited, the offer manager, to the Pakistan Stock Exchange. K-Electric, the only listed electricity supplier in Pakistan, was privatized in 2005. [BR] [Dawn]
• SIFC Directs 300MW Solar Project Implementation: The CEO of Northern Power Generation Company (NPGCL), Sabeeh uz Zaman Faruqui, referenced a directive from the Special Investment Facilitation Council (SIFC) to implement decisions made in their meeting, including the installation of a 300 MW utility solar power plant at Thermal Power Station (TPS) Muzaffargarh in collaboration with M/s Ningbo Green Lights Energy Limited (NGLE) via Open Competitive Bidding. [BR]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• Pakistan-Iran Bilateral Talks: Security Concerns Arise - Pakistan and Iran discussed increasing bilateral trade and cooperation during a meeting between Presidents Asif Ali Zardari and Dr. Seyyed Ebrahim Raisi at Aiwan-e-Sadr. However, Iranian President Raisi's media interaction and planned reception were canceled due to security concerns raised by the security agencies. [BR] [BR]
• Uncertainty Surrounds Pakistan's IMF Tranche Approval: There's uncertainty about the timing of the IMF's approval for Pakistan's next $1.1 billion tranche, with both parties aiming for consideration by the end of April. Pakistan's request for the third tranche under the Standby Arrangement Program has not yet been included in the IMF's executive board calendar. [The News] [Dawn]
• Pakistan's March Surplus Hits $619 Million: Pakistan achieved its third highest monthly current account surplus of $619 million in March 2024, attributed to increased home remittances during the Ramadan/Eid season and a reduced trade deficit. This marks the second consecutive month of surplus after a $98 million surplus in February 2024. [BR] [ET]
• Pakistan's FDI Drops 10% in FY24's First Nine Months: Foreign Direct Investment (FDI) in Pakistan decreased by 10% in the first nine months of fiscal year FY24, with inflows amounting to $1.1 billion compared to $1.216 billion in the same period of FY23, according to the State Bank of Pakistan (SBP). During this period, FDI inflows were $1.959 billion against $860 million. [BR] [Dawn]
• New Balochistan Minister Vows Anti-Terror Action: Balochistan's new Home Minister, Mir Ziaullah Langove, vowed to hold accountable those behind recent terrorist acts, chairing a security meeting attended by top officials including Additional Chief Secretary Home Zahid Saleem. The meeting focused on reviewing security arrangements and assessing the overall security situation in Balochistan. [ET]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• Israel Genocide: Israeli troops launched a surprise raid into an eastern section of Khan Yunis, residents reported on Monday, forcing people who had returned to abandoned homes in the southern Gaza Strip's main city to flee once again. Gaza's Civil Defence agency revealed that health workers had discovered approximately 200 bodies over the past three days, with individuals killed and buried by Israeli forces at a hospital in Khan Yunis. [Dawn] [Dawn] [ET]
• Tesla Cuts Prices Amid Sales Decline & Competition: Tesla has lowered prices in major markets like China and Germany, aiming to boost demand amid falling sales and stiff competition from Chinese electric vehicles. The price cuts, up to $2,000 on models like the Model 3 and Model Y, come ahead of Tesla's quarterly earnings report today, which is expected to show a revenue drop and lowest gross margin in nearly four years. [Dawn]
• Iranians Embark on Umrah Pilgrimage to Saudi Arabia: After nearly a decade, Iranian Muslims traveled to Saudi Arabia for Umrah pilgrimage, a trip previously restricted due to tensions between Tehran and Riyadh. The first group departed from Iran via Tehran's Imam Khomeini airport, as reported by Iran's official news agency IRNA. [Dawn]
• UN Warns of Climate Health Risks for Workers: The United Nations cautioned that the majority of workers worldwide are facing health risks linked to climate change, with existing regulations offering inadequate protection. The International Labour Organization (ILO) stated that many workers are already exposed to climate-related hazards in the workplace, a situation expected to worsen according to a report. [Dawn]
• Erdogan's Iraq Visit Signals Improved Relations: Turkish President Erdogan's visit to Iraq, the first by a Turkish leader since 2011, signifies a new phase in relations. Both countries agreed to cooperate against Kurdish militants, boost economic ties with a new trade corridor, and address Iraq's water needs, marking a significant shift after years of tension over Ankara's operations against PKK militants in northern Iraq. [Dawn]

OPINION(S) & REMAINDERS

• PIA Restructuring: Shareholders, Creditors File Scheme - Two significant milestones in the restructuring of Pakistan International Airlines Corporation Limited (PIACL) were reached as shareholders and creditors filed the Scheme of Arrangement with the SECP. This follows the federal cabinet's approval of PIACL's legal segregation and restructuring, with the Scheme filed on March 28th, 2024, awaiting regulatory approval. [BR]
• Opinion: Transitions & Instability - “A CLIP from a recent television talk show is doing the rounds on the banned platform, X. In it, a journalist/ commentator discusses how rumors of a possible extension for the Supreme Court chief justice have cropped up time and again. The option was ‘discussed’ during the tenures of Saqib Nisar and Asif Saeed Khosa, he says. The present times are no different, it appears, for he mentions how the rumor has come up again and how he would be in favor of the current Chief Justice Qazi Faez Isa accepting an extension.” - By Arifa Noor [Dawn]