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Nov 29, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
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  6. Gulf

Textile sector's stock market capitalisation up

Pakistan textile sector's stock market capitalisation increased to Rs 2.328 billion or by 12 per cent during the past three weeks, analyst said.

The market euphoria is based on improved margins of spinners as cotton prices have fallen by 54 percent since July 1,1999, they said.

"However we have certain reservations regarding an across the board recovery because international yarn prices, especially in low count varieties (most common in Pakistan) have come under pressure," an analyst with ABN AMRO, Adnan Kundi, said.

International yarn prices have fallen from 68-73 cents per pound last year to the current 4649 cents per pound. The best quality of yarn is 40 counts and in the low quality is 20 counts, which is commonly used in Pakistan.

Cabinet asks TCP to lift cotton

Chief Executive General Pervez Musharraf underlined the need for developing a strong mechanism for checking the quality of exports.

Presiding over a cabinet meeting, which lasted eight hours, Gen Musharraf directed the commerce ministry to make efforts not only to find niche markets for Pakistani export goods but also to ensure that products which were exported were value-added.

The chief executive also emphasized the need for developing indicators to monitor the performance of the country's trade offices abroad.

The cabinet meeting also decided an increase in support price for wheat for the coming Rabi crop up to Rs300 per kilogram, registering an increase of 25 per cent over the last year's support price.

The meeting also directed the Agricultural Development Bank of Pakistan to defer the principal repayments for Kharif production loans for six months. These loans were up to Rs 50,000 in each case and would benefit small farmers directly.

It directed ADBP to ensure that its loans disbursements in regard to purchase of tractors were made current.

The cabinet also directed the Trading Corporation of Pakistan to move fast in the next few days to lift cotton so that the benefit could trickle down to the farmers.

It decided to set up two committees to look into the issues of agriculture prices and measures to check smuggling.

The meeting constituted a ministerial committee, headed by the minister for petroleum, to study the problem faced by petroleum exploration companies in Balochistan and to make recommendations to the cabinet for decision.

The committee will also review the issue of re-starting the Saindak project.

Chashma power plant goes nuclear

Pakistan's second 300 megawatt electric (MWe) power plant went nuclear on Tuesday.

Dr Ishfaq Ahmad, chairman of the Pakistan Atomic Energy Commission, pressed the button to load the first fuel assembly of "121 assembly core" required to run the plant to produce 300 Mwe. The rest are in the process of loading.

The Chashma Nuclear Power Plant (CHASHNUPP) has been completed with the help of China and will become operational in the next few months. This is the first ever undertaking between China and Pakistan in the arena of high technology.

Karachi Nuclear Power Plant, the first nuclear plant, started supplying electricity in 1971.

The contract for the Chashma plant was signed on Dec 31, 1991, and work on it started in 1992. It will start providing electricity early next year at very reasonable rates.

No sugar surplus

There would be no surplus sugar in 1999-2000 for export due to decline in sugarcane crop production.

Sources said that the ministry of food has estimated sugar production at 2.9 million tons while crop production would not exceed 43.5 million tons.

Sources said that dry weather and 14 per cent reduction in cultivation are the main reasons for low production.

The local consumption is also around 2.9 million tons and there would be no surplus sugar this year.

In 1998-99, the country produced 3.5 million tons of sugar and industry fetched $ 145m through export of 505,736.75 tons of surplus sugar.

Cotton crisis may spread to rice, wheat

Farmers, already suffering from low cotton prices, are facing another blow as poor rice prices threaten to delay the sowing of wheat, a farmers' group said on Tuesday.

Crisis in the agriculture sector would damage prospects of a broader economic recovery, said Shah Mahmood Qureshi, chairman of Farmers' Associates Pakistan.

"There cannot be an economic revival unless there is revival of the agriculture sector, which is in trouble right now," Qureshi said.

"There is no lifting of rice crops. The rice paddies are still in the fields and the fields are needed for sowing wheat," he said.

Qureshi, a former deputy minister in the 1993-96 government of Benazir Bhutto, told Reuters by telephone from Multan that a serious crisis was emerging due to a lack of buyers for some major rice varieties.

POL, wheat stocks being maintain

The Economic Coordination Committee of the Cabinet (ECC) was informed on Monday that safe level of stocks including the POL, fertilizer and wheat were being maintained in the country.

The meeting, which was presided over by minister for finance Shaukat Aziz, was told that there existed sufficient supplies for the local market.

The ECC advised the provincial governments to take effective measures to keep the prices at reasonable level during the forthcoming holy month of Ramazan.

Bumper cotton crop expected

If phutti arrivals from fields to ginneries means anything, the country is poised to have a bumper cotton crop of over 10m bales.

According to Pakistan Cotton Ginners' Association (PCGA), the phutti arrivals up to Nov 15, stood higher by 43.4% at 4.422m bales compared to a corresponding period of last when the arrival was 3.092m bales.

After suffering a setback last season when only 7.3m bales were produced, the country is poised to produce over 10m bales of cotton which may leave an exportable surplus of around 1 to 1.5m bales after meeting local consumption of about 8.5m bales.