PTI vs Govt, Inflation, Wheat Prices & Woes, Smuggling Attempts, Wind Power Projects, Debt Servicing & Borrowing, U.S. Gold Prices & Debt Ceiling

TOPLINE

●     PTI plans to sue NAB and Rangers for Imran Khan's alleged abduction and file cases for the "murder of unarmed citizens" during protests. The govt delegation failed to persuade Maulana Fazlur Rehman to change the sit-in venue outside the SC, with Fazl refusing to budge.The Supreme Court adjourned today’s session till next Tuesday, hopeful of talks ending election stalemate. Social media sites continue to remain blocked.

●     The Sensitive Price Indicator (SPI) remained at 48.02% for tlsat week, indicating ongoing inflation for essential items, while food prices have risen in the retail market, with flour reaching record prices.

●     The district administration in Lakki Marwat, KKP has increased its monitoring of goods transport vehicles to prevent possible wheat smuggling from Punjab to Afghanistan, while the PM has directed authorities to take immediate measures to control the rising price of wheat and flour in KPK.

●     Custom authorities at Torkham border intercepted a smuggling attempt from Afg into Pak, seizing betel nuts, dry milk, emulsifiers, coal, and a truck while the FBR has granted Tajik exporters access to Pakistani ports for goods transportation.

●     3 Wind IPPs have raised concerns about the delay in completion of a transmission line from Gharo Cluster while DFC has informed Pakistan that it will not invest until the tariff issues of 5 existing wind power projects are resolved.

●     Pakistan's debt servicing cost for the upcoming fiscal year is expected to exceed Rs 7.6 trillion, while the federal govt intends to borrow a record Rs 9.4 trillion from domestic banks from May to July 2023.

●     Gold prices fell due to a stronger US dollar and rising US bond yields while the US treasury Secretary has said that the ongoing showdown over raising the U.S. debt ceiling is "more difficult" than in the past, but she remains hopeful that a solution can be found to avoid default.

●     Preliminary unofficial results show that Turkey's President Erdogan's share of votes is just below 50%, leading to a run-off on May 28. India's opposition Congress party has won power in the southern state of Karnataka, defeating PM Narendra Modi's ruling BJP a year ahead of national polls.

●     COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

●     Gold Import: Rs 723 Million was the import value of gold in March 2023, up 146% compared to Rs 294 million in March 2022. [ET]

●     Cotton Yarn Export: Rs 19.1 billion was the export value of cotton yarn in March 2023, up 15% from Rs 16.6 billion in March 2022, according to the PBS. [ET]

●     Readymade Garments Export: Rs 77.46 billion was the export value of readymade garments in March 2023, up 25.06% compared to Rs 61.94 billion in March 2022, according to the PBS. [ET]

●     Pakistan Tackles Rising Inflation: The Economic Coordination Committee (ECC) of the Cabinet in Pakistan has directed the Ministry of Planning, Development and Special Initiatives and the Pakistan Bureau of Statistics to suggest measures to lower the prices of essential items, as inflation in the country has increased considerably. The Sensitive Price Indicator (SPI) increased by over 1.05% over the previous week, while the Consumer Price Index (CPI) has also increased, prompting the government to consider solutions to address the issue. The Sensitive Price Index (SPI) in Pakistan remained elevated at 48.02% for the week ended on May 11, indicating continued inflation, especially for essential items such as wheat flour, sugar, meat, pulses, and vegetables. [BR] [Dawn]

●     Rising Food Prices in Pakistan: According to a survey conducted by Business Recorder, the prices of essential food commodities like flour, vegetables, live chicken/meat, beef, fruits, pulses, and edible oil have increased in the retail market. Flour price has touched a new peak in wholesale and retail markets, as an 80-kg flour sac is being sold at Rs 15,500 while a 20kg fine flour bag is available at Rs 3400. [BR]

●     Pakistan's Wheat Woes: Pakistan, among the world's top 10 wheat producers, faces wheat and flour crises almost every year due to problems in the supply chain rather than supply. The government has authorized the procurement of 1.8 MTTs of wheat with Rs 201 billion in CCL this year, but despite a bumper crop, domestic prices remain high, indicating a need to fix post-harvest handling and supply chain issues. [ProPakistani]

●     Wheat Smuggling Prevention Intensified: The district administration in Lakki Marwat, Khyber Pakhtunkhwa has increased its monitoring of goods transport vehicles to prevent possible wheat smuggling from Punjab to Afghanistan. Additional assistant commissioner Sultan Nooruddin Ahmer is leading the monitoring mechanism and warned that transporters without official documents will face legal action and have their wheat confiscated. [Dawn]

●     PM Tackles Wheat Crisis: Pakistan's Prime Minister, Muhammad Shehbaz Sharif, has directed authorities to take immediate measures to control the rising price of wheat and flour in Khyber Pakhtunkhwa province, as well as increasing supplies from Punjab province, according to a press release from the PM's office. The meeting also reviewed procurement and supply and demand of wheat in Punjab and Khyber Pakhtunkhwa provinces and was attended by several senior officials. [BR]

●     Punjab Pushes Cotton Cultivation: Punjab Agriculture Secretary Iftikhar Ali Sahoo directed relevant departments to work with farmers to ensure maximum cotton cultivation during a meeting reviewing activities under the Cotton Action Plan 2023-24. The current cotton cultivation target for Multan division is 1.269 million acres, of which nearly 0.74 million acres were cultivated, which is 58% of the total target. [ET]

●     Chinese Investors Eye Sindh's Mangoes: Chinese investors have shown interest in the mango varieties of Sindh Province in Pakistan, with a three-member delegation from various Chinese companies visiting Sindh Agriculture University and discussing business opportunities in the mango-producing areas of Sindh. They have agreed to promote the Mango Value Addition Program to gain access to lucrative international markets, and the Vice Chancellor of the university highlighted the importance of agriculture in the second phase of the China Pakistan Economic Corridor (CPEC). [BR]

●     Investment in Pink Salt Mining: The Miracle Saltworks Collective Inc (MSCI) plans to invest around $200 million in mining, processing, and importing pink Himalayan salt from Pakistan, with the aim of constructing a world-class processing and packaging facility at the mining site and community development programs. The company has shown its willingness to invest in the entire process, from mining to bringing it to the United States, with Pakistan having huge reserves of pink salt, which have a potential earning of $12 billion annually. [Dawn] [RP] [Geo]

●     Opinion: Need for Cotton Revival for Survival - “Cotton is known as “white gold” due to its preciousness and utility in human life. Pakistan is the world’s fifth largest producer of cotton, and the cotton crop is inevitable for the economy of Pakistan.” - By Muhammad Abbas Zia [Dawn]

●     Opinion: Enhancing Farmers’ Market Power - “It is beyond doubt that agricultural farming is an inherently risky business, primarily due to two factors: high dependency on weather conditions and volatile crop prices driven by national and international dynamics.” - By Khalid Saeed Wattoo [Dawn]

AGRI-INPUTS, WEATHER, WATER & POWER

●     Hot Weather Hits Karachi: Karachi experienced hot and humid weather as temperature rose to 37.7 degrees Celsius on Saturday, with the Meteorological Department warning of heat wave-like conditions prevailing for several days. Rural districts of Sindh including Dadu, Jacobabad, Sukkur, Nawabshah, and Larkana are expected to experience a heat wave with temperatures up to 47 degrees Celsius, and light rain with thundershowers forecasted in some areas on May 15 and 16. [ET]

●     Water Stealing Acusation: Sindh Chamber of Agriculture claims 18,000 cusecs are being stolen in Punjab daily. The Sindh Chamber of Agriculture has expressed concerns about the possibility of water spillovers from water channels during monsoon rains due to a lack of rehabilitation measures for Left Bank Outfall Drain, Puran, Main Nara Valley Drain, Kadhan Pateji Outfall Drain and other saline drains. The Chamber demanded that the Sindh government should immediately start rehabilitation works and remove encroachments that impede the flow of water in the saline channels. [BR][Dawn]

●     Agriculture Machinery Import: Rs 916 million was the import value of agricultural machinery and implements in March 2023, down 35.3% compared to Rs 1.4 billion in March 2022. [ET]

●     LPG Import: Rs 12.3 billion was the import value of liquified petroleum gas in March 2023, up 11.5% from Rs 11.04 billion in March 2022. [ET]

●     Delay in Transmission Line: Three Wind Independent Power Producers (IPPs) in Pakistan have raised concerns about the delay in completion of a transmission line from Gharo Cluster, which is impacting their operations and causing financial losses. In a joint letter to the National Electric Power Regulatory Authority (Nepra), the companies expressed annoyance that Pakistan's renewable energy sector is no longer bankable due to insufficient, stable, and maintained transmission infrastructure, and urged improvements to the stability/evacuation capability of the transmission infrastructure. [BR]

●     Attock's Timber Mafia: The timber mafia is cutting down precious eucalyptus trees in Hazro town of Attock allegedly with the support of field officials from the forest department. Despite local villagers raising their voices, no legal or departmental action has been taken yet, and the cutting down of trees not only degrades the environment but also harms the livelihoods of local people. [Dawn]

●     Border Seizure Foils Smuggling: Custom authorities at Torkham border foiled an attempt to smuggle betel nuts and other goods from Afghanistan into Pakistan, according to a press release. The seized items included dry milk, betel nut, emulsifier, and coal, with a total market value of around Rs. 5.26 million, along with a Mercedes Benz truck worth Rs 6 million. [BR]

●     Tajikistan Granted Access: Pakistan's Federal Board of Revenue (FBR) has issued new rules granting Tajik exporters full access to Pakistani ports for transportation of transit trade cargo and bilateral goods between Pakistan and Tajikistan, according to an SRO 560(I)/2023 issued on Friday. The new rules also state that Tajikistan’s registered vehicles holding valid permits shall enter Pakistan without the requirement of submission of any financial security for the duty and taxes leviable on the vehicle, on the basis of reciprocity, as agreed by the two contracting parties. [BR]

●     DFC Withholds Pakistan Investment: The US International Development Finance Corporation (DFC) has informed Pakistan that it will not invest until the tariff issues of five existing wind power projects are resolved. The DFC has offered to revise the Power Purchase Agreements (PPAs) of its sponsored wind projects subject to some concessions from the government of Pakistan. [BR]

●     Opinion: Lahore’s Forgotten Villages - “Early reports from the 2023 census suggest that Lahore’s population may have crossed the 12 million mark, ie, an addition of nearly a million more residents since 2017. In the previous inter-censal period (1998-2017), Lahore was recorded as one of the fastest growing cities in the world, with an annual average population growth rate of nearly 4%.” - By Umair Javed [Dawn]

AGRI UPDATES & PAKISTAN POLICY

●     PTI to Sue NAB & Rangers for Imran Khan's Abduction: The Pakistan Tehreek-e-Insaf (PTI) has decided to file a case against the National Accountability Bureau (NAB) and Rangers for the "abduction" of its chairman Imran Khan from the premises of Islamabad High Court last week and to lodge cases over the "murder of unarmed citizens at peaceful protests" across the country. The party has resolved to nominate the interior minister, as well as the Punjab and Khyber Pakhtunkhwa chief ministers and police chiefs in these cases and is demanding a high-powered commission comprising Supreme Court judges to investigate the killing of unarmed citizens and attempts to incite protesters to create anarchy. [Dawn]

●     Failed Talks on Sit-In: A delegation of the federal government failed to convince Maulana Fazlur Rehman to change the venue of a sit-in scheduled to take place outside the Supreme Court on Monday. PDM chief announced the alliance would stage a sit-in outside the SC’s building due to PTI chairman Imran Khan getting blanket relief from courts in cases lodged against him. [Dawn]

●     Pakistan's Debt Servicing Concerns: Pakistan's debt servicing cost for the next fiscal year may surpass Rs 7.6 trillion, according to sources at the Ministry of Finance, which is 15% higher than the projected net income of the federal government but lower than the IMF's estimates. This amount is 90% higher than this fiscal year's original budget set aside for interest payments and one-third higher than the revised estimates, leading to concerns that taxes will only be collected to pay the interest to domestic and foreign banks. [ET]

●     Pakistan Plans Record Domestic Borrowing: The Pakistani government plans to borrow a record Rs 9.4 trillion from domestic banks between May and July 2023 to meet its financial requirements, due to the absence of foreign funding. The policy rate is currently at a peak level of 21%, making domestic borrowing more expensive for the government, and the borrowing will be used to repay previous loans obtained from domestic financial institutions, with a major chunk of the borrowing to repay government securities worth Rs 8 trillion that are being matured in the next three months. [BR]

●     China Mediates Pakistan-Afghanistan: China is working on a solution to address the issue of banned Tehreek-e-Taliban Pakistan (TTP) by brokering a deal between Pakistan and the Afghan Taliban. China wants the Afghan Taliban to neutralize the threat posed by the East Turkestan Islamic Movement (ETIM), while Pakistan is concerned about the presence of the TTP and its affiliates. [ET]

●     Opinion: Battlefield Central Punjab - “Central Punjab used to be such a stronghold for the Pakistan Muslim League-Nawaz that it was also dubbed the GT Road party. But has the last year of economic turmoil and a changing demographic allowed its main rival, Imran Khan’s Pakistan Tehreek-i-Insaf, to breach the Noon-League bastion?” - By Nasir Jamal [Dawn]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

●     Oil Prices: Oil prices fell on Friday and were set to end the week lower for the third straight week, as the market balanced supply fears against renewed economic concerns in the United States and China. Brent crude futures fell 59 cents, or 0.8%, to $74.39 a barrel by 12:07 p.m. EDT (1707 GMT). West Texas Intermediate (WTI) US crude futures fell 55 cents, or 0.8%, to $70.32. [BR]

●     Malaysian Palm Oil Rises: Malaysian palm oil futures rose for a second consecutive week due to short-covering ahead of exports data and concerns about the energy market. Despite early losses, the benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose 1.25% for the week to 3,646 ringgit ($822.10) per tonne, with traders expecting May 1-15 export shipment data to influence prices. [BR]

●     Gold Prices Dip Amid Stronger US Dollar: Gold prices fell to a one-week low due to a stronger US dollar and rising US bond yields, and are on track for a weekly dip. Spot gold was 0.1% lower at $2,014.09 per ounce, with the dollar heading for its biggest weekly gain since September, making bullion less attractive for buyers holding other currencies. [BR]

●     Turkey's Erdogan Faces Run-Off: Preliminary unofficial results show that Turkey's President Erdogan's share of votes is just below 50%, leading to a run-off on May 28. More than 64 million people were eligible to vote to elect a president and parliament for a five-year term, and there are three presidential candidates: Erdogan (AK Party), Kilicdaroglu (CHP), and Ogan (ATA). [Al Jazeera]

●     IMF Approves $600 Million Loan for Ghana: Ghana's Minister of State in the Finance Ministry, Mohammed Amin Adam, has said that the International Monetary Fund (IMF) is expected to approve a first loan tranche of $600 million as early as Wednesday, with disbursement to occur within a week. Ghana is seeking $3 billion from the IMF to bolster its economy, and the funds are expected to help the country work towards the target of foreign reserves amounting to the equivalent of three months of imports by 2026. [BR]

●     Iran Arrests: Iran has arrested eight people for leading a workers’ strike at a key gas site in the south of the country, according to local media. The South Pars/North Dome mega-field, the largest known gas reserve in the world, has been disrupted by a strike by 4,000 workers demanding better wages and working conditions. [BR]

●     Chicago Wheat Futures Rise: Chicago wheat futures rose after four days of losses due to bargain-buying amid uncertainty over the renewal of the Black Sea grain export deal. Soybeans also rose, while corn prices ticked up slightly due to slowing US exports and falling demand for US supplies. The most-active wheat contract on the Chicago Board of Trade rose 1.2%, soybeans rose 0.7%, and corn inched up 0.1%. [BR]

●     China Tightens Soybean Inspections: China has increased inspections on imported soybean cargoes, according to three soybean traders, leading to longer and costlier clearing times for buyers of the protein source. The move follows new customs procedures implemented by China last month, which had already caused delays and higher costs for buyers. [BR]

●     Cyclone Mocha Hits Myanmar: Cyclone Mocha hit Myanmar and southeastern Bangladesh on Sunday with winds up to 195 kilometers per hour, causing damage to makeshift shelters in Rohingya refugee camps in Cox’s Bazar, but there were no reports of casualties. The storm spared the refugee camps but brought a storm surge to western Myanmar where communications were largely cut off. [Dawn]

●     Congress Party Wins Karnataka: India's opposition Congress party has won power in the southern state of Karnataka, defeating Prime Minister Narendra Modi's ruling BJP a year ahead of national polls. The Congress party has already won 114 seats out of 224 seats in the assembly, giving it an overall majority, and is leading in another 22 seats. [Dawn] [ET] [Al Jazeera]

●     Khartoum Conflict Persists: Residents of Khartoum reported that fighting continued on Saturday despite an agreement to protect civilians between the warring army and the Rapid Support Forces (RSF) paramilitary force. Ceasefire talks are due to resume in Saudi Arabia on Sunday. The conflict, which started a month ago, has killed hundreds of people, displaced over 700,000 inside the country, and risks destabilizing the region. [Dawn]

●     U.S. Debt Ceiling Showdown: Treasury Secretary Janet Yellen has said that the ongoing showdown over raising the U.S. debt ceiling is "more difficult" than in the past, but she remains hopeful that a solution can be found to avoid a first-ever U.S. default. Yellen hopes to update Congress within the next couple of weeks about when exactly the Treasury would run out of funds to pay the government's bills. [BR] [ET]

●     Opinion: Is There a Way out of the Ukraine Quagmire? - “In February 2020, Russia launched air and ground attacks on Ukraine, calling them "Special Military Operations" aimed at demilitarization and liberating people of Donbas from Kyiv's genocide. World leaders hit back with economic sanctions and warnings of catastrophic consequences, but more than a year later, the conflict appears to have developed into a quagmire with no clear solution in sight.” - By Zahid Ul Hassan & Zubaida Abbasi [ET]

PAKISTAN - REMAINDERS

●     No extension of population census operation deadline. [BR]

●     Startup upskills IT graduates for global industry. [Dawn]

●     Facebook, Twitter, YouTube are still not accessible. [ET]

●     Lucky Core inches closer to Lotte Chemical acquisition. [Dawn]

●     Peoples Marine Walk: Karachi's New Seaside Recreational Project. [ET] [The News]

●     Naila Kiani becomes the second Pakistani woman to scale Mount Everest. [BR] [Dawn]

●     Opinion: Islamisation of Banks - “There is a strong aversion to interest in Pakistan's largely Muslim population, but the country's financial system is still heavily reliant on it, causing concern among religious factions and parties. The issue has been under legal scrutiny, with the government of Pakistan appealing to the Federal Shariah Court's decision.” - By Mutaher Khan [Dawn]

●     Opinion: Missing the Bus - “Shahzad Saleem, the chairman of the Nishat Chunian Group and the Pakistan Textile Council, believes that only an unfettered private sector can turn around Pakistan's economy, and the country must take critical decisions to put in place long-term policies related to labour, education, tax, energy, and other areas. He emphasizes the need for the separation of economic discourse from political discussions for long-term economic planning.” - By Nasir Jamal [Dawn]

●     Opinion: The Cost of Internet Shutdown - “The livelihoods of a very large number of low-income and middle-class earners are dependent upon internet connectivity, such as tens of thousands of riders associated with on-demand-economy businesses such as Bykea, FoodPanda, Daraz, Careem and others. These folks were deprived of much-needed income in days of record-high inflation. Their effective income for this month may be down by as much as 20 percent.” - By Ali Khizar [BR]

●     Pakistan's Census Deadline Nears: The field operations for Pakistan's seventh national census must end on May 15th, according to the federal government, with no further extensions, and the provincial governments have been instructed to complete the census enumeration/verification. The census count as of May 12th was 240.6 million, with 121.2 million counted in Punjab, 56.5 million in Sindh, 39.6 million in Khyber Pakhtunkhwa, 20.9 million in Balochistan, and 2.3 million in the Islamabad Capital Territory. [Dawn]