LNG spot market cold-shoulders in the country
In a major setback to gas-starved consumers, Pakistan could not get even a single bid for three LNG (liquefied natural gas) cargoes meant for the first half of January and attracted the highest price for the second half of the month mainly because of delayed tenders amid rising international prices.
Pakistan LNG Limited (PLL) had issued tenders for six cargoes for delivery between Jan 8 and Feb 1. In response, no supplier or trader bid for the first three slots between Jan 8 and Jan 18. This is the first time that the country did not get a bid since it entered the spot market five years ago.
For the fourth January 20-21 window, only two bids were received with potentially unviable prices. The lowest bid of 17.32 percent of Brent price for this slot came from a surprise first-time bidder, Qatar Gas, which is not in the spot market.
Qatar Gas also happened to be the only bidder for the fifth cargo for Jan 26-27 window and at the same price— 17.32 percent of Brent. This is also for the first time that a lowest bid is more than 17 percent, except the very first cargo that was purchased in 2015 for terminal testing.
Roshan Digital account may attract $1.5bn
The Roshan Digital Account (RDA) initiative, which provides overseas Pakistanis with investment opportunities in areas like saving certificates, stock market and property, is expected to attract $1-1.5 billion over the next six months and build the country
’s foreign currency reserves. The State Bank of Pakistan (SBP) reported that non-resident citizens deposited the largest amount of $7.7 million in a day on Wednesday in their RDA at banks operating in Pakistan. With this, their total deposits grew to $139.4 million in the past three months. Prime Minister Imran Khan had launched the initiative in September 2020. Over 50,000 overseas Pakistanis have so far opened the accounts in eight Shariah-compliant and conventional banks.
Pakistan: ADB sees economic recovery
The Asian Development Bank has said that Pakistan’s economy was on the path of recovery but shied away from giving a growth projection.
Some official estimates suggested 2.8 percent growth rate during the current fiscal year.
“Pakistan’s economy is recovering, particularly in the manufacturing and construction sectors, supported by the government emergency relief,” stated the ADB in its brief Asian Development Outlook Supplement report released on Thursday.
In the previous ADO Updated Outlook report of September, the ADB had said that Pakistan’s economy may grow at a pace of 2 percent in the current fiscal year, which was the 5th lowest pace among South Asian countries.
However, the ADB in its latest report did not mention the growth number for Pakistan – the second largest economy in South Asia after India.
Tech, digitisation can tackle illicit trade
The challenge of illicit trade is real which can be tackled through technology and digitisation, remarked Adviser to Prime Minister on Institutional Reforms Ishrat Husain.
Speaking at a webinar titled“Combating illicit trade in Pakistan” on Thursday, the adviser talked about various researches on the size of illicit sector.
“The government has separated tax policy and administration to ensure that honest taxpayers and legitimate industries are not burdened further and tax policy does not hurt the economy,” he said.
He highlighted that the government was utilising services of National Database and Registration Authority (NADRA) and taking advantage of broadband penetration to chase tax evaders.
“Previously, 75 percent of mobile phones in the market were smuggled, however, with the help of technology-based solutions, we have completely eliminated them,” he said.
SBP reserves rise $188mn to $13.29bn
The foreign exchange reserves held by the central bank rose 1.43 percent on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.
On December 4, the foreign currency reserves held by the SBP were recorded at $13,298.5 million, up $188 million compared with $13,110.9 million in the previous week.
The central bank said that during the week ended December 4, 2020, the SBP received $359 million from multilateral/ bilateral sources including $307 million from the Asian Development Bank (ADB).
“After accounting for external debt repayments, the SBP reserves increased by $188 million to $13,298.5 million,” it added.
Overall, liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $20,402.4 million. Net reserves held by banks amounted to $7,103.9 million. Pakistan received the first loan tranche of $991.4 million from the IMF on July 9 last year, which helped bolster the reserves. In late December, the IMF released the second loan tranche of around $454 million.
Riding the cane bandwagon: Rahim Yar Khan
Located on the extreme southern edge of Punjab, Rahim Yar Khan is a geographically diverse district. It is spread across a vast desert and enormous riverine area with three canals that water its farmlands. This natural endowment gives it enormous tapped and untapped potential for agricultural and livestock production.
The district has benefitted a great deal from this natural gift. It is known for the finest quality cotton. It has helped Pakistan meet its milk and meat requirement. It is now sustaining the sugar industry by producing high-yield sugar cane.
The success, however, has its flipside. The district morphed from being a cotton champion to the sugar industry’s sustainer. It is now persistently blamed for failing cotton crop and hurting textiles at a most critical juncture of our economic journey.
Steel mills transaction structure for privatisation accepted
The Privatisation Commission (PC) on Thursday approved transaction structure for the privatisation of the Pakistan Steel Mills (PSM) and decided to present it to the Cabinet Committee on Privatisation (CCoP) for approval.
The meeting discussed the PSM’s privatisation structure in a holistic manner and was chaired by Privatisation Minister Mohammadmian Soomro.
The meeting was also attended by industries minister, board of investment chairman, privatisation and finance secretaries, financial advisers, adviser to PM on institutional reforms and special assistants to prime minister.
Earlier, the Islamabad High Court had ruled that advisers and special assistants cannot head government’s committees. Subsequently, the government will now re-constitute the CCoP to include elected representatives as members of the committee as well as its chairman.
Pakistan problems India’s bid for Basmati GI tag
The Intellectual Property Organisation (IPO) Pakistan has filed an application against India’s bid to obtain exclusive Geographical Indication (GI) tag for basmati rice in the European Union (EU).
IPO Pakistan has filed the opposition under Article 51 of the Regulation (EU) No 1151/2012 through a Brussels-based international law firm.
Commerce adviser Abdul Razak Dawood confirmed the development in a tweet late on Wednesday night. He assured rice exporters that the government would defend the case with due diligence and commitment.
“I wish to inform that Pakistan has filed its opposition against the Indian application to European Commission for granting exclusive rights on the use of Basmati for its rice exports to European Union (EU). We assure the rice community that we will, defend our case with due diligence and commitment,” Mr Dawood said.
While India accounts for 65 percent of the international trade in basmati, Pakistan produces for the remaining 35 percent, which fetches around $800 million to $1billion in exports annually for the country.
An official of the IPO said under the European Commission’s rule, opposition to any application — once published in its official journal — needs to be filed within a period of three months. Pakistan has filed the application two days ahead of the deadline of December 11, the official explained.
Vital medicine for heart patients short in Punjab
A vital medicine used for heart-related chest pain (angina) is short in the market across Punjab. Manufactured by a multinational pharmaceutical company, the life-saving medicine, Angised (0.5mg), was the only available remedy in an emergency. A patient feeling chest pain/heart pain (angina) is suggested to keep it under the tongue to prevent risk to life. Senior cardiologists and surgeons said the shortage was all over the country and its main reason might be the low price. They held the retailers and distributors responsible for the shortage.
However, there was another opinion that the globally recognised pharmaceutical company had either halted its production or limited it because of some other reasons.
ADB: manufacturing, construction recovery underway
In its supplement to the Asian Development Outlook, the Asian Development Bank (ADB) said on Thursday that economic activity in South Asia has started to normalise from the third quarter, and Pakistan’s economy is recovering, particularly in manufacturing and construction.
The earlier South Asia forecast for 6.8 percent contraction is upgraded to 6.1 percent in line with an improved projection for India, as recovery accelerates, from 9 percent contraction to 8 percent. Growth will return in 2021, at 7.2 percent in South Asia and 8 percent in India, according to the supplement.
In Afghanistan, agriculture is robust, but the outlook is adversely affected by a new Covid-19 wave and intensified conflict even as peace talks continue. Economic activity in Bangladesh has recovered more strongly than expected with both exports and remittances growing in recent months but threatened by external risks as Covid-19 outbreaks renew in major export destinations.