Crop Burning Penalty, Oil Facility Request, RLNG price & System Losses, PIA Restructuring, Agri Goods Customs Valuation, BD Cyclone Hamoon.

TOPLINE

• The Punjab Agriculture Department has initiated legal action against farmers for burning crop residue with a PKR 15,000 per acre penalty.

• Pakistan has requested a $1 billion oil facility from Saudi Arabia, with deferred payment starting from January 2024. The request is part of the IMF's financing plan to support Pakistan's oil economy until the conclusion of the $3 billion SBA. The IMF team will visit Pakistan on November 2 to carry out a review of the SBA.

• OGRA reported a 3.8% increase in the average sale price of regasified liquefied natural gas (RLNG) for October compared to the previous month for Sui companies. The Energy Ministry reported a Rs 78 billion loss to the gas system due to a four-month delay in approving a 45% increase for SSGC consumers and 50% for SNGPL, proposed by OGRA to be effective from July 1, 2023.

• The government and commercial banks are in discussions to devise a debt restructuring plan for Pakistan International Airlines (PIA) to sustain operations for 6 months with reduced flights. A 12-member committee, aims to finalize the plan within 2 weeks after holding initial meetings. PIA recently cancelled over 300 flights in 10 days due to financial constraints and fuel unavailability.

• Customs has established new values for 26 categories of spices, herbs, and edible or natural gums, issuing a fresh valuation ruling, making the one from last year null and void.

• Bangladesh began evacuating 1.5 million people from its 10 coastal districts as Cyclone Hamoon intensified, with the storm expected to cross the southeastern coast by Wednesday noon.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

• UVAS Survey Reveals Alarming State of Loose Milk Quality: According to a nationwide survey by the University of Veterinary and Animal Sciences (UVAS), 54% of loose milk samples were deemed unsuitable for human consumption, with 92% not meeting quality and safety standards. The survey covered 1,206 samples from 11 cities in Pakistan, evaluating 5 key parameters related to composition, adulteration, antibiotic residues, aflatoxin M1, and heavy metals, during both winter and summer seasons. [Dawn]

• Agriculture Department Takes Action Against Crop Burning: The Agriculture Department has initiated legal action against farmers for burning crop residue, resulting in 5 cases registered in various police stations. In line with the Smog Control Act under Punjab government directives, burning crop residue now carries a penalty of Rs 15,000 per acre, leading to the filing of FIRs against offenders. Farmers are advised against this practice. [Dawn]

• Rabi Crop Fertiliser Assurance: Caretaker PM Kakar instructed relevant ministries to develop a comprehensive plan for an uninterrupted supply of fertilizer for the Rabi crop following the Economic Coordination Committee's approval of the immediate import of 200,000 metric tons of urea fertilizer and the assurance of sustained gas supply for the fertilizer industry during a review meeting. [BR]

• Customs Karachi Sets New Valuation for Spices and Herbs: The Directorate General of Customs Valuation Karachi has established new Customs values for 26 categories of spices, herbs, and edible or natural gums, issuing a fresh valuation ruling. The previous valuation ruling, dated 18-11-2022 (No 1695/2022), was over a year old and did not accurately reflect the current international market, prompting the need for this reevaluation. [BR]

• Towel Manufacturers Voice Concerns Over FBR Delayed Refunds: Syed Usman Ali, the Senior Vice Chairman of the Towel Manufacturers Association of Pakistan, has raised concerns about the significant amount of money stuck in the Federal Board of Revenue (FBR) affecting exporters. Delays in sales tax refunds and duty drawback claims have forced exporters to seek high-interest loans, increasing the cost of doing business. The pending duty drawback refunds since August 2023 have also negatively impacted exports. [BR]

• KCA Raises Spot Rate Amid Bullish Market: The KCA's Spot Rate Committee increased the spot rate by Rs 300 per maund, closing it at Rs 16,600 per maund. The local cotton market remains bullish, with trading volumes satisfactory. In Sindh, cotton prices range from Rs 15,000-17,500/maund, while in Punjab, prices range from Rs 15,500-18,000/maund. In Balochistan, cotton is priced between Rs 15,500-16,000/maund. [BR]

AGRI-INPUTS, WEATHER, WATER & POWER

• Pakistan Seeks $1 Billion Saudi Oil Support: Pakistan has formally requested a $1 billion oil facility from Saudi Arabia, with deferred payment starting from January 2024. The request is part of the IMF's financing plan, intended to support Pakistan's oil economy until the conclusion of the $3 billion Standby Arrangement (SBA) program by March 2024. The existing Saudi Oil Facility is set to expire in December 2023, with disbursements totaling $700 million from March to September 2023, and an additional $300 million expected to be disbursed by the end of December 2023. [The News]

• NEPRA Concerned Over Power Distribution Companies' Alignment: NEPRA was confounded by the lack of alignment of the Power Distribution Companies' (Discos) five-year Power Acquisition Program (PAP) 2022-23 to 2026-27 with the Integrated Generation Capacity Expansion Plan (IGCEP) and the Transmission System Expansion Plan (TSEP) of NTDC. During the hearing chaired by Nepra Waseem Mukhtar, it was revealed that the Discos had no forecast or tools to analyze the potential impact of the proposed PAP on end-consumer tariffs or the overall basket price. [BR]

• DISCOs Scrap 8,000 MW Renewable Projects: DISCOs have abandoned 8,000 MW of renewable energy projects due to serious flaws in their electricity acquisition plan, as pointed out by Nepra and stakeholders at a recent hearing. The plan lacks details on the impact of electricity tariffs on consumers, causing concerns among regulators. [ET]

• LNG Price Surge Amid Domestic Gas Price Hike: OGRA reported a 3.8% increase in the average sale price of regasified liquefied natural gas (RLNG) for October compared to the previous month for Sui companies, with SNGPL and SSGC consumers experiencing respective price hikes of 3.87% and 3.8%. This surge follows the government's recent announcement of a significant increase in natural gas prices for domestic users. [Dawn]

• Delayed Approval Costs Gas System Rs 78 Billion: The Energy Ministry reported a Rs 78 billion loss to the gas system due to a four-month delay in approving a 45% increase for SSGC consumers and 50% for SNGPL, proposed by OGRA to be effective from July 1, 2023. The government's delayed decision-making, including the caretaker government's approval from November 1, 2023, instead of October 1, 2023, exacerbated the situation. [The News]

• Fertilizer Manufacturers Urge Axle Load Regime: The Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC) have requested the government to implement the Axle Load Regime gradually to prevent transport shortages in the supply of fertilizers to farmers. They raised concerns about the abrupt enforcement of the regime in a letter to the Federal Secretary of Food Security, focusing on the supply of DAP (Diammonium Phosphate) fertilizer. [ET]

• Opinion: Is the Shiny New $1.6 Billion Corporation the Answer to Karachi’s Eater Woes? “Through loans and taxpayer money, millions of dollars are being poured into the water utility to make it ‘better’. Only time will tell whether Karachiites will reap the benefits. According to the Karachi Water and Sewerage Corporation (KWSC) — previously KWSB — the entity responsible for the supply and distribution of water in Karachi, the city needs 1,200 million gallons per day (MGD), however, it only receives 550MGD. What’s worse is that over 10 percent of the 550MGD is lost before it even reaches the end user.” By Hawwa Fazal [Dawn] [Dawn]

AGRI UPDATES & PAKISTAN POLICY

• IMF Mission to Review Pakistan's Economic Recovery Plan: An IMF mission led by Nathan Porter will visit Pakistan on November 2 for the first review of the $3 billion standby arrangement approved in July, aiding the country in avoiding a sovereign debt default. The visit comes as Pakistan navigates an economic recovery path under a caretaker government, having already received $1.2 billion as the first tranche in July. IMF's resident representative, Esther Perez Ruiz, confirmed the mission's details to Reuters. [BR]

• PIA Debt Restructuring Amid Crisis: The government and commercial banks are in discussions to devise a debt restructuring plan for Pakistan International Airlines (PIA) to sustain operations for 6 months with reduced flights. A 12-member committee, aims to finalize the plan within 2 weeks after holding initial meetings. PIA recently cancelled over 300 flights in 10 days due to financial constraints and fuel unavailability. [ET]

• Nawaz Sharif Receives Bail Extension, Toshakhana Case Progress: PML-N supreme leader Nawaz Sharif obtained an extension in his protective bail from the Islamabad High Court in the Al-Azizia and Avenfield Apartments references until Thursday. Additionally, the accountability court judge Mohammad Bashir revoked Mr. Sharif's perpetual arrest warrants in the Toshakhana case after his surrender and granted him bail against surety bonds of Rs 1 million, with the further hearing adjourned until November 20. [Dawn] [ET] [The News]

• SBP's Push for Currency Reduction & SME Digitization: The State Bank of Pakistan (SBP) is focused on reducing the Rs 8.79 trillion currency in circulation and promoting financial services to Small and Medium Enterprises (SMEs) through digitization. Deputy Governor SBP Saleem Ullah praised Haball's efforts in facilitating supply chain digitization during an event, emphasizing its alignment with the SBP's strategic goals. [BR]

• MoITT Facilitating PayPal & Stripe Integration in Pakistan: The Ministry of Information Technology and Telecommunication (MoITT) is actively facilitating the introduction of PayPal and Stripe payment gateways in Pakistan to strengthen the country's IT industry's payment ecosystem. Muhammad Zohaib Khan, Chairman of P@SHA, acknowledged the efforts of Umar Saif, in promoting Pakistan at GITEX Dubai 2023 event. [ET]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

• Ongoing Gaza Conflict's Global Economic Impact: Regional and international leaders such as the Qatari Emir, Jordanian Queen and others have been calling out Israel’s war crimes as the crisis intensifies and the carpet bombing of Gaza continues. At a Saudi Arabian investment forum, financial leaders warned that the ongoing Gaza war between Israel and Hamas could significantly harm the global economy, particularly affecting the world's major oil exporter's attempts to diversify away from fossil fuels. Israel is spending $246 million daily on their invasion of Gaza.  [BR] [Dawn] [ET] [Dawn]

• Bangladesh Evacuates 1.5 Million Ahead of Intensifying Cyclone Hamoon: Bangladesh began evacuating 1.5 million people from its 10 coastal districts as Cyclone Hamoon intensified, with the storm expected to cross the southeastern coast by Wednesday noon, according to State Minister Enamur Rahman. The Bangladesh Meteorological Department alerted maritime ports and forecasted the cyclone's path over the west-central Bay of Bengal. [ET] [DT] [FE] [Somoy] [Dhaka Tribune]

• China's Role in Global Energy Transition: IEA's Projections - IEA's Executive Director highlighted China's pivotal role in the shift towards cleaner energy, with a projection that global oil demand will peak before 2030, driven by advancements in clean energy technologies, particularly in transportation. China's significant economic changes have made it the key driver of global oil consumption growth over the past decade. [BR] [Reuters] [Reuters] [IEA] [SP Global]

• Chinese Delegation Inks Agricultural Deals in Iowa: A Chinese delegation signed agreements to purchase billions of dollars' worth of agricultural goods, primarily soybeans, during a ceremony in Iowa. These agreements, including corn, sorghum, and wheat, were the first significant bulk signings between China and the US since 2017, with China's crop imports from the US lower than usual this year due to Brazil's ample harvests. [BR] [USDA] [USTR] [SF] [ITA] [Iastate]

• China's Top Leadership Reshuffle: Defence Minister, Foreign Minister Removed - China made significant changes in its top leadership, removing Defence Minister Li Shangfu and former Foreign Minister Qin Gang from the cabinet. These moves came after months of speculation and confusion surrounding their positions. The government did not provide specific reasons for their removal. [Dawn] [Reuters] [VOA] [CFR] [NPR] [MEPC] [The Guardian]

• Oil Prices Dip on Economic Concerns in Euro Zone: Oil prices declined for the third consecutive session due to sluggish economic data from Germany, the euro zone, and Britain, signaling a potential slide into recession. Brent crude futures dropped 1.8% to $88.20 a barrel, while US West Texas Intermediate crude futures fell 2% to $83.78 a barrel at 1:03 p.m. EDT (1703 GMT). [BR]

PAKISTAN - REMAINDERS

• CM Baqar Assesses Anti-Dacoit Preparations: Caretaker Chief Minister Justice Maqbool Baqar visited a frontline town to inspect preparations for action against dacoit gangs in the riverine area. Assuring full support, he pledged to meet the Sindh police's requirements for funds, weapons, and equipment. He also instructed the Sindh Police Chief to coordinate with counterparts in Punjab and Balochistan for the operation. [Dawn]

• High Unemployment Among Female Engineers in Pakistan: A joint analysis of the Labour Force Survey 2020-21 by Gallup Pakistan and PRIDE revealed that 70% of female engineering graduates in Pakistan are either unemployed or not actively participating in the labor force. Only about 28% of the total graduates are currently employed, with 20.9% facing unemployment and 50.9% not in the labor force. [ET] [PO] [PT] [Samaa]

• Opinion: Pakistan Needs a Different Leadership - “The world has changed dramatically over the last forty years. The exponential spread of social media and the exposure to television and news about events and developments reaching people instantly has raised the consciousness and understanding of the general public to a high level. Even those who have remained unfortunate due to the neglect of the state and are practically illiterate have a good understanding of what is good for them and which leaders and what policies need to be adopted and preferred when it comes to exercising their choice during elections.” - By Talat Masood [ET]