Textile Exports Grow, Fertilizer Sales Down, LSM Grows, Punjab Curfew, SBP Annual Report, UN COPs.

TOPLINE

• Pakistan’s textile exports grew by 17.9% in September 2024, reaching $1.605 billion, driven by increased sales of finished goods, particularly a 35% rise in ready-made garments. This shift towards exporting finished products is part of the sector's broader trend.
• Fertilizer sales in September 2024 fell 25.7% to 499,000 tonnes, with urea sales down 35.3% to 365,000 tonnes, while DAP sales increased by 24.1% to 134,000 tonnes. Overall urea offtake from April to September was 2.746 million tonnes, 21% below projected demand, attributed to low wheat prices and reduced cotton acreage.
• Pakistan's Large Scale Manufacturing (LSM) sector grew by 4.68% in August 2024 compared to July 2024, but saw a 2.65% decline compared to August 2023.
• The Punjab government has imposed a ban on public gatherings and closed educational institutions due to expected protests by the PTI against constitutional amendments and Imran Khan's imprisonment, as well as ongoing student protests over an alleged rape case in Lahore. Section 144 will be in effect for two days, from Friday to Saturday.
• The State Bank of Pakistan projects economic growth of 2.5% to 3.5% for fiscal year 2025, following the IMF's revised forecast of 3.2%, down from 3.5%, due to underperformance in the agriculture sector, particularly in cotton and wheat.
• There are three big U.N. environmental gatherings coming up: The biodiversity COP (, one on desertification in December, and, of course, the main event: the 29th U.N. Climate Change Conference, or COP 29, in November. With trillions needed for clean energy and climate preparedness, the upcoming COP29 summit aims to address disputes over financial commitments.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Daily Rates: Find the following rates on the hyperlinked titles: [Shipping Intelligence], [Pakistan Stock Exchange], [Kibor International Kibor Rates], [BRIndex100 & BR Sectoral Indices], [Activities of Karachi Port Trust, Port Qasim]
• Sugar Committee Changes: The Petroleum Division is being removed from the sugar price control committee after disagreements over sugar export quotas. Petroleum Minister Musadik Malik had recommended halting exports due to violations of conditions set by the Economic Coordination Committee (ECC) and criticized sugar millers for non-compliance. [ET]
• Textile Exports Surge in September: Pakistan’s textile exports grew by 17.9% in September 2024, reaching $1.605 billion, driven by increased sales of finished goods, particularly a 35% rise in ready-made garments. This shift towards exporting finished products is part of the sector's broader trend, though total textile exports for the fiscal year 2023-24 saw a modest 0.9% increase, totaling $16.65 billion. [Dawn] [The News]
• Donkey Meat Export to China: Pakistan and China have signed a protocol allowing the export of donkey meat and hides, with plans to establish quarantine requirements for the trade. A slaughterhouse in the Gwadar Free Zone will process up to 216,000 donkeys annually, supporting investment under the CPEC. [BR]
• Analysis: Pakistan's Rice Exports Surge - Pakistan’s rice export industry is at a pivotal point in FY25 after achieving over 6 million metric tons and $4 billion in earnings in FY24. Although the first quarter of FY25 showed record exports of nearly 1 MMT generating $725 million, this surge is largely due to carryover stock from last year's bumper crop and may not be sustainable, especially as India's export restrictions have affected the global market. [BR]
• DawnMedia Partners with WWF-Pakistan: DawnMedia has partnered with WWF-Pakistan for the Breathe Pakistan climate change initiative, which promotes environmental sustainability in Pakistan. Launched this month, the initiative encourages citizens to adopt sustainable practices. The partnership was formalized at a signing ceremony in Karachi. [Dawn]

ENERGY - WEATHER, WATER & POWER

• LSM Growth in August 2024: Pakistan's Large Scale Manufacturing (LSM) sector grew by 4.68% in August 2024 compared to July 2024, but saw a 2.65% decline compared to August 2023, according to the Pakistan Bureau of Statistics (PBS). The provisional quantum index number (QIM) for August 2024 is 108.84, based on data from various ministries and provincial statistical agencies. [BR] [Dawn]
• Supreme Court Orders Dams Fund Transfer: The Supreme Court directed the closure of the Dams Fund account maintained by the State Bank of Pakistan, transferring its balance to the Public Account of the federation. The fund, totaling Rs 23.67 billion as of October 2024, includes Rs 11.47 billion in collected donations and Rs 12.19 billion in earned mark-up. [BR]
• Nepra Issues Notices for Non-Compliance: Nepra issued show cause notices to CPPA-G, the Market Operator, and NTDC for not finalizing black start procedures and operating manuals for power plants. This action followed a nationwide blackout on January 9, 2021, prompting an inquiry that revealed non-compliance with the submission of required operating procedure manuals. [BR]
• Federal Cabinet Ends IPP Contracts: The federal cabinet's summary confirms the voluntary termination of contracts with 5 independent power producers (IPPs), with the government ensuring fair treatment and requesting the State Bank to repatriate dividends to foreign shareholders. The government aims to make timely payments of Rs 72 billion to the IPPs within 90 days to maintain its credibility. [The News]
• Fertilizer Sales Decline in September: Fertilizer sales in September 2024 fell 25.7% to 499,000 tonnes, with urea sales down 35.3% to 365,000 tonnes, while DAP sales increased by 24.1% to 134,000 tonnes. Overall urea offtake from April to September was 2.746 million tonnes, 21% below projected demand, attributed to low wheat prices and reduced cotton acreage in Punjab and Sindh. [MG]
• KP Governor Calls for Water Meeting: Khyber Pakhtunkhwa Governor Faisal Karim Kundi has urged for a Council of Common Interests meeting to resolve issues regarding water distribution, highlighting that his province has not received its share since the 1991 Water Accord and has never been compensated for water usage. He noted that while other provinces receive their allocations, Khyber Pakhtunkhwa continues to be neglected. [Dawn]
• Oil Industry Warns of Losses: The oil industry is concerned about restrictive fuel pricing, with the Oil Companies Advisory Council (OCAC) warning of potential losses due to changes in the pricing formula from October 16, 2024. Reduced customs duties and cuts to the inland freight equalization margin (IFEM) could lead to a Rs 700 million loss for high-speed diesel. [ET]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• Fazlur Rehman on 26th Amendment: Maulana Fazlur Rehman has refused to support the controversial 26th constitutional amendment, threatening to withdraw from negotiations if the government persists with heavy-handed tactics to secure a two-thirds majority in parliament. His stance, following a meeting with JUI-F and PTI leaders, led to late-night visits from Prime Minister Shehbaz Sharif and PPP chief Bilawal Bhutto, seeking to win him over. [Dawn] [Dawn] [ET]
• Punjab Bans Public Gatherings: The Punjab government has imposed a ban on public gatherings and closed educational institutions due to expected protests by the PTI against constitutional amendments and Imran Khan's imprisonment, as well as ongoing student protests over an alleged rape case in Lahore. Section 144 will be in effect for two days, from Friday to Saturday. [Dawn]
• Finance Ministry Reviews IMF Commitments: The Finance Ministry is reviewing progress on commitments made under the IMF's Extended Fund Facility (EFF) for 2024-27, focusing on structural benchmarks and other actions. A Pakistani delegation led by Finance Minister Muhammad Aurangzeb will participate in the IMF-World Bank annual meetings from October 21-26, 2024, in Washington DC, where they will update IMF officials on these commitments. [BR]
• Finance Minister Commits to Reforms: Federal Minister for Finance Muhammad Aurangzeb reaffirmed the government's commitment to broad-based reforms in taxation, energy, and state-owned enterprises (SOEs) during a meeting with US Ambassador Donald Blome. The minister emphasized efforts to increase Pakistan's tax-to-GDP ratio to 13.5% by addressing leakages and incorporating untaxed sectors into the tax net. [BR]
• SBP Report Highlights Economic Challenges: The State Bank of Pakistan projects economic growth of 2.5% to 3.5% for fiscal year 2025, following the IMF's revised forecast of 3.2%, down from 3.5%, due to underperformance in the agriculture sector, particularly in cotton and wheat. The SBP's annual report highlights that increased development spending in the FY25 budget is expected to further stimulate economic activity. [BR] [The News]
• Pakistan's Internet Freedom Declines: Pakistan has been labeled "not free" in internet freedom for the 14th year in a row, scoring 27 out of 100 in the Freedom on the Net 2024 report by Freedom House. The report highlights severe government censorship and control, placing Pakistan among nearly two dozen countries, including China, Saudi Arabia, and Iran. [Dawn]
• Pakistani Startups Shine in Dubai: Pakistani startups made a significant impact at the GITEX Extend North Star startup show in Dubai, drawing interest from international investors. Showcasing innovations in fintech, health tech, e-commerce, and sustainability, the event highlighted Pakistan's tech growth potential. [ET]
• FPCCI Calls for Rate Reductions: FPCCI officials urged the government to cut electricity rates by 9% and reduce interest rates to single digits, citing high costs leading to industrial shutdowns and job losses. They rejected the proposed mini-budget, arguing that it is unjustified given the shrinking trade deficit and warned against unsustainable reliance on businesses for tax revenue. [The News]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• Israeli Genocide: Israel has claimed to have killed Hamas chief Yahya Sinwar in a military operation in Gaza, raising concerns about the potential impact on ceasefire efforts and the ongoing conflict. While Israeli officials reported that Sinwar was confirmed dead through dental records and DNA testing, Hamas has yet to verify this information. [Dawn]
• Triple COP Year: There are actually three big U.N. environmental gatherings coming up: The biodiversity COP, one on desertification in December, and, of course, the main event: the 29th U.N. Climate Change Conference, or COP 29, in November. COP 29 has been billed as the finance COP, where negotiators will hammer out how wealthier governments can financially support climate-vulnerable countries. [WEF] [Environment]
• UN Calls for Climate Funding Increase: The UN's climate chief stressed that funding from wealthy nations is essential for a new agreement to support developing countries in combating climate change. With trillions needed for clean energy and climate preparedness, the upcoming COP29 summit aims to address disputes over financial commitments and responsibilities, as rich nations are urged to increase their current $100 billion annual target. [BR]
• Dollar Hits 11-Week High: The dollar reached an 11-week high on Thursday, boosted by stronger-than-expected US retail sales data for September, which increased by 0.4%, exceeding the forecast of 0.3%. This rise in confidence about the US economy followed a muted response to the European Central Bank's anticipated rate cut of 25 basis points. [BR]
• UN Report: Poverty Crisis Worsens - A UN Development Program report revealed that over one billion people live in acute poverty worldwide, with children representing more than half of those affected. The report, published in collaboration with the Oxford Poverty and Human Development Initiative, noted that poverty rates are three times higher in war-torn countries, as 2023 marked the highest number of global conflicts since World War II. [BR] [ET]
• Chinese Economy: China’s economy slowed in the third quarter, growing at the slowest pace in a year and a half, according to government figures. The world’s second-largest economy grew 4.6 percent year on year in the July-September period, compared to 4.7 last quarter. Optimism around the stimulus package seems to be fading.  [AlJazeera]

OPINION(S) & REMAINDERS

• Massive Warehouse Fire in Baldia Town: A fire at a warehouse near Baldia Town destroyed goods worth millions and spread to an adjacent warehouse. Firefighters from KMC and Rescue 1122 faced access challenges but managed to control the blaze after two hours. Fortunately, there were no casualties. The warehouses contained cardboard, hosiery, and polyester, which fueled the fire's rapid spread. [ET]
• Mega Motor Partners with BYD: Mega Motor Company, a subsidiary of HUBCO, has partnered with BYD Auto Industry Company to produce and distribute BYD brand passenger vehicles in Pakistan. This collaboration, announced in a notice to the Pakistan Stock Exchange, includes a master supply and manufacturing agreement and technical license agreements for related products. [PT]
• Lucky Motor Partners with Meezan Bank: Lucky Motor Corporation Limited has signed a strategic MOU with Meezan Bank for financing Kia and Peugeot vehicles. Customers can now access an attractive financing offer, allowing them to purchase models like the Kia Sportage or Sorento at a low rental rate of 7.99%. [MG]
• Opinion: Elitism, cultist Autocratic Populism & Threats to Democracy - “Such a situation is reflected in the currently held partisan conviction that the present political crises originated from an imagined foreign led regime change rather than a legal VONC, followed by protracted political protests and turmoil initiated thereafter, accentuated by the unconstitutional Article 63-A Supreme Court judgment. A crisis was created on dubious facts and evidence and riling up of popular passions on a cyber document after abject economic, diplomatic and governance failure, to force an earlier than anticipated election. A crisis of agitation, provocation and attack on the state persists for the last two and a half years.” - By Sahibzada Riaz Noor [ET]