PKR: LITTLE CHANGES
The rupee moved slightly in relation to the dollar on Friday in the process of trading, Kamal Hayder, Research Analyst-PAGE said. The rupee gave up overnight gains in relation to the dollar for buying and selling at Rs 104.85 and Rs 104.86 respectively. Inter-Bank Market Rates: In the final Asian trade, the dollar lost momentum as US Federal Reserve Chair Janet Yellen spoke of a gradual pace of rate hikes and sounded less hawkish than some had expected, while investors braced for US President-elect Donald Trump to be sworn in. The dollar index, which tracks the greenback against six major currencies, fell 0.2 percent to 100.97. It was on track to shed 0.2 percent for the week, he added.
ACCORD TO VERIFY FTA CERTIFICATES BEING FINALIZED
Following receiving a number of complaints vis-à-vis submission of forged and bogus Free Trade Agreement (FTA) certificates by some `unscrupulous elements’ for availing inadmissible tax exemptions, the Pakistan Customs is finalising an agreement with Chinese authorities to verify FTA certificates through online EDI system. This was stated by Director (Reforms and Automation) Wajid Ali at a meeting held with a delegation of All Pakistan Customs Agents Association (APCAA) at Customs House, the other day. He said that the condition of submitting FTA certificates would also be eliminated as the Customs department would be in a position to verify the same through online EDI system once the agreement is signed with China in this regard. He said that government was signing an agreement with China and, thereafter, the assessing officer could verify the origin of certificate through online EDI system. Such an arrangement would not only eliminate the condition of submitting FTA certificates at the FTA Cell, but would also help in releasing consignments without any delay, he added. In response to an issue raised by the APCAA’s senior vice chairman, Arshad Jamal, he assured that suitable amendments would be made to the system so as to enable the goods declarant to monitor the valid valuation rulings, database prices, 90 days data and other relevant information at his computer screen. Besides, the issue would also be discussed with D-G (Valuation), he said.
LEAN BUSINESS ACTIVITY SEEN ON COTTON MARKET: KAMAL
Prices maintained firm posture on the cotton market on Friday in the process of slow business activity, Kamal Hayder, Research Analyst-PAGE said. The official spot rate was unchanged at Rs 6450. In Sindh, seed cotton prices were higher at Rs 3100-3350. In Punjab, phutti rates were at Rs 3100 and Rs 3575, as per 40 kg. In the ready session, over 2,000 bales of cotton changed hands between Rs 6100 and Rs 6700. Some brokers observed that volume of business remained thin as ginners were not interest in selling stock at current rates. It was noted that strong demand for fine quality may help rates to retain present levels.
Some other experts said that the arrivals of seed cotton from cotton fields into the ginneries have slowed down which indicating that very little unsold stock left with the ginners. Now, it appeared that as prospects of importing cotton from India has faded, so the spinners would have to explore other markets such as the US markets to import quality lint for meeting their demand, they said.
FBR SUPPORTS BOI’S RELOCATION PACKAGE
The Federal Board of Revenue (FBR) has supported the special package of the Board of Investment (BoI) for relocation of industry in Pakistan from China and other countries for which threshold level for tax breaks/exemptions would be worked out in consultation with stakeholders. Source told to Research Analyst-PAGE on Friday that the second inter-ministerial meeting was convened in Board of Investment to deliberate on the formulation pf policy package for relocation of industry into Pakistan. In this second follow-up meeting, the FBR officials showed their willingness to provide incentives/exemptions/tax holidays under the package for relocation of industries and transfer of technology to Pakistan. Representative of the FBR stated that the government of Pakistan has already announced various incentives and exemptions with regard to customs and sales tax. He pointed out that as per policy measures, fresh exemptions are being discouraged. Rather, the existing exemptions are being phased out. However, the FBR can consider a special package as and when finalised in the light of its merit and contribution towards the economic development of Pakistan, source said. The BoI is working on devising a policy package for relocation of industry in Pakistan from China and other parts of the world with specific reference to Special Economic Zones and industrial parks being established in different parts of the country in the context of CPEC. The BoI also highlighted the importance of industrial growth through value addition and export orientation in the overall growth and socio-economic development of a country. The BoI appreciated the participants for their participation and contribution in this important national cause. The director policy BoI gave an introductory presentation and highlighted the decisions taken in the last meeting and comprehensively convened the current situation of manufacturing sector, distribution of existing private sector investment, rising trade deficit and case studies with regard to strategies opted by Vietnam and Korea and lessons learnt for Pakistan.
H1 TEXTILE EXPORTS DOWN 1.65 PERCENT TO $6.156 BN
Textile exports declined by 1.65 percent to $6.156 billion during the first six months of the current fiscal year as compared to $6.2589 billion for the same period a year ago, Kamal Hayder, Research Analyst-PAGE said. Provisional exports data of select commodities updated by the PBS on its website noted a 49.87 percent decrease in export of raw cotton during July-December 2016 when compared to the same period of last fiscal year. Raw cotton exports decreased to $35.88 million in July-December 2016 from $71.58 million in July-December 2015. A decline of 7.17 percent was noted in exports of cotton yarn during the period after exports in absolute terms decreased to $650.881 million in July-December 2016 from $701.191 million in July-December 2015 while cotton cloth exports decreased to $1.048 billion from $1.11 billion and in percentage term by 5.57 percent. Exports of yarn other than cotton yarn decreased 30.86 per cent to $12.587 million during July-December 2016 from $18.206 million in July-December 2015 while exports of towels decreased to $373.505 million from $405.077 million, reflecting a decrease of 7.79 per cent. He further said that export of art, silk & synthetic textile also declined 30.74 per cent to $102.486 million during the period under review from $147.979 million and exports other textile materials decreased 11.98 per cent to $200.215 million in July-December 2016 from $227.463 in July-December 2015. However, exports of cotton carded or combed increased 167.95 per cent to $209 in July-December 2016 from $78 in July-December 2015, knitwear increased 0.17 per cent to $1.193 billion from $1.191 billion and bed wear exports increased 4.66 per cent to $1.043 billion from $997.062 million, he added.
WHEAT SOWING GOALS NOT ACHIEVED BECAUSE OF DROUGHT, HIGH INPUT COSTS
The country has missed wheat sowing target by 1.7 percent due to drought conditions and high input costs. According to PAGE-source, wheat, a major staple crop of the season which fulfills the domestic food requirements, had been cultivated over an area of 8.8 million hectares against the set targets of 9.1 million hectares. Khyber Pakhtunkhwa (KPK) and Balochistan provinces have missed wheat sowing target by 22.66 percent and 5.48 percent respectively. In KPK the wheat crop was sown over an area of 0.6 million hectares against the set target of 0.76 million hectors fixed by the government. Balochistan the crop was sown over an area of 0.36 million hectares against the target of 0.4 million hectares. Sowing in Sindh, the second largest wheat producer after Punjab remained satisfactory as government targeted 1.2 million hectares for wheat sowing and the crop was sown over an area of 1.157 million hectares. Punjab achieved 100 percent wheat sowing target for the current season as the crop has been cultivated on over 6.677 million hectares. The government has set wheat production target at 26.01 million tons for Rabi sowing season 2016-17 from an area of 9.1 million hectares. Out of 26.01 million tons, Punjab is projected to produce 19.51 million tons, Sindh 4.2 million tons, Khyber Pakhtunkhwa 1.4 million tons and Balochistan 0.9 million tons. According to Pakistan Metrological Department (PMD) a strong weather system (westerly wave) is expected to produce more rains/snowfall over the hills in the country during the coming week.
PARLIAMENTARY PANEL URGES GOVT TO APPROACH WORLD BANK FOR SETTING UP ARBITRATION COURT OVER INDUS TREATY
A joint parliamentary panel on Friday unanimously called upon the government to ask the World Bank to immediately constitute a court of arbitration to adjudicate on India’s ongoing construction of Kishanganga and Ratle hydroelectric plants, and bring construction of Ratle dam to a halt till the issue is resolved. A clubbed meeting of National Assembly Standing Committee on Foreign Affairs and Standing Committee on Water and Power, jointly presided over by the committee’s chairmen – Sardar Awais Khan Leghari and Arshad Khan Leghari -, respectively, adopted a unanimous resolution after threadbare discussion on Indian threat to Indus Waters Treaty (IWT) and to chalk out future course of action for Pakistan. Both the standing committees in the joint resolution, drafted by former finance minister Shah Mehmood Qureshi, urged the government to ask the World Bank that “it must be in accordance with its responsibilities, under the IWT, to constitute a court of arbitration without further delay to adjudicate on the issues raised by Pakistan against India’s ongoing construction of Kishanganga and Ratle hydroelectric plants. Till the World Bank constitutes the court of arbitration, it must demand of India an immediate halt to ongoing construction of Ratle dam till the issue is resolved”. Briefing the meeting, Foreign Secretary Aizaz Ahmad Chaudhry said that the WB has called for further pause on the arbitration, but Pakistan has refused to accept the advice till construction of the Ratle dam is stopped. “This is a matter of life and death for us and we will protect our rights under the Treaty at any cost”, Chaudhry said, and hoped that the WB would play its role not only to resolve the current controversy, but also for the preservation of the Treaty. “India wants to appoint neutral experts, while Pakistan desires setting up of court of arbitration to resolve the matter,” he said, and added that experts can only look into the designs of the projects while the court gives its judgement based on legal aspects.
KE DEMAND FOR 40 PAISA PER KWH HIKE EVOKES OBJECTION FROM CONSUMERS
Consumers representatives and business community on Thursday voiced their serious concern over K-Electric’s demand for 40 paisa/kWh hike in power tariff under Fuel Charges Adjustment (FCA) for December 2016 on provisional basis. They said the FCA was part of KE’s Multi Year Tariff (MYT) which expired on June 30 last year. A KE petition for determination of its new MYT has been pending with the National Electric Power Regulatory Authority (NEPRA) for the last few months. NEPRS is yet to make decision in this regard. Since June 2015, the power utility had been demanding FCA from NEPRA to balance the fuel-cost variations on provisional basis. While the regulator was considering the company’s proposed adjustment through public hearings. On the other hand, consumers and stakeholders point accusing figures on both the KE and NEPRA for the continued FCA exercise throughout the MYT suspension period. In a fresh move, K-Electric has requested NEPRA to allow 40 paisa per unit tariff hike on account of FCA on provisional basis for December 2016. In order to consider the proposed adjustment, the regulator has decided to hold public hearing on January 26, 2017 at the NEPRA Tower Islamabad. In its plea, K-Electric has shown an increase of Rs 458.3 million under total fuel-cost variation for the same period of which Rs 270.6 million hike was claimed from own generation whereas Rs 187.3 million from the external power sources.