Pakistan Economy - News & Updates - Archive

[Neo]

‘Skyrocketing oil prices may derail economy’​

* ‘Oil is the lubricant of economic expansion. A high oil price makes it more expensive for companies to operate and consumers to buy’

KARACHI: Skyrocketing crude oil prices in the global market that touched an all-time high of $92 per barrel in the New York market on Friday due to rising US-Iran tension, pose a great concern to the economy of oil-dependent countries like Pakistan in near future.

Economists, while expressing their opinion to Daily Times, were in unison to say that the direction of a country’s economy depends on the movement of oil prices whether they go up or down. If oil prices move up persistently, then it will have a negative on the country’s progress as it has been forecast that the oil prices may jump above $100 a barrel if the market continues its jittery over the US move. And, all government’s efforts to stabilise the economy would result in naught.

“Oil is the lubricant of economic expansion. A high oil price just makes it more expensive for companies to operate,” said an economist requesting anonymity.

A high price for oil makes it more expensive for companies to transport goods from one place to another, and makes it more expensive for consumers to fill up their cars, and therefore they’ve got less money in terms of disposable income, he added. This importance makes the commodity one of the key aspects that economists look towards when judging consumer behaviour that in turn shapes business’ plans.

Crude oil has always been one of Pakistan’s major imports. During the first two months of the current fiscal year, the import bill for crude oil by 6.53 percent to reach $1.344 billion on a year-on-year basis but analysts believe that it will increase by 20-22 percent further if the current high oil price scenario continues. Economists predict that if the government had to increase prices of petroleum products i.e. high-speed diesel and motor sprit (MS) or gasoline/petrol in the retail market, it would also result in high inflationary pressures. Inflation, which is currently stands at 8.4 percent, is expected to reach eight percent by the end of the year against government’s target of 6.5 percent, said economist Samiullah Tariq.

Although petrol has a higher weightage of 0.98 percent than diesel’s 0.2 percent in general CPI, the actual impact on the economy would come from increasing the prices of diesel, as majority of the transportation (public and cargo both) depends on diesel. This is also evident from the consumption of 1.15 million tons of gasoline /petrol against 7.3 million tons of diesel.

Although, the government had subsidised diesel prices since March 2005 to control retail prices, it’s subsidy amount has increased from Rs 7.33 per liter to Rs 11.53 per liter with the oil prices hovering around $90 per barrel in global market during the last two months.

The government’s payables to the Oil Marketing Companies (OMCs) as price differential claims, an oil subsidy, will further rise to Rs 25 billion by the end of October.

This is not just it; high oil prices will show their harmful impact in a number of ways. Power production will become far more costly as furnace oil prices may shoot up. Industrial production will cost more. The prices of furnace oil stood at Rs 29,799 per tonne following a sharp surge of more than Rs 2,000 during the current month.

There are many industries, which still utilise furnace oil to run their machinery and are facing the burden of high cost of production due to increased prices in the international market. It is prudent to mention here that gas companies stop providing gas during four months during the winters to industries therefore they have to run their boilers on furnace oil

Definitely, costs of running all means of transportation will high substantially. Railway fares will go up and airlines will raise their fares substantially. Agriculture sector will also hurt owing to the power rate for tube wells will go up making farm output far more costly. Higher power rates will affect the service sector including hotels, restaurants and shops. Power for schools, colleges and universities will cost far more.

All in all cost of living will be higher as the all the food items and essential necessities will become dearer due to the hike in oil prices.

The government’s policy of not passing this hike to the consumers is pressurising its fiscal abilities. This might derail all macroeconomic indicators. If the government does not pass on inflationary pressures to the consumer, then the current deficit account will widen further, interest rates will jump up and the government will face budget deficit at the end of the year finally, said renowned economist Asad Saeed.

As a consequence of being an election year, foreign inflows and privatisation receipts are also expected to slow down, he added. Pakistan has to explore its own oil reserve and promote alternate source of energy like natural gas and natural coal.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Horticulture exports may fetch $1bn by 2012​

LAHORE: Linking finance to horticulture competitiveness will achieve $1 billion export by 2012, said Javed Malik, Additional Secretary Ministry of Finance on Saturday.

Chairing the 3rd meeting of the Sub-Committee for Horti-business Finance, Malik said that finance is considered as an essential but underemphasized issue in the horticulture. There is a need to develop effective policy tools to link finance to innovation and competitiveness and identify innovative projects in the horticulture sector, he added

He said at a meeting last month, the task force was informed that a few crucial steps needed to improve the financial situation of the sector.

The Task Force has been established under the auspices of the Ministry of Finance headed by Dr. Salman Shah, Advisor to the Prime Minister on Finance, Economic Affairs, Revenue and Statistics. The world horticulture market is valued at $80 billion to which Pakistan contributes $170 million annually. In Pakistan only 16% of fruits are being processed, although, this activity offers great opportunities to augment volume of value added products using modern technology.

Pakistan’s horticulture export industry share in the world market has risen steadily from about 5% in 1991 to 12% in 2004. The potential markets for Pakistan’s exports have been identified in Europe and the Middle East.

The Competitiveness Support Fund (CSF) was tasked by the Ministry of Finance to undertake a comprehensive study entitled “The Competitive Advantage of the Food Processing Industry: Focus on Quality, Safety and Standards.” Following this study, CSF undertook more specific work on horticulture, a sub-sector of agriculture accorded national priority by the Government of Pakistan. Support for CSF is part of the $1.5 billion in aid that the US government is providing to Pakistan over five years to improve economic growth, education, health, and governance. Stakeholders including representatives of horticulture exports, senior officers of the commercial banks and the State Bank of Pakistan also attended the meeting.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Privatisation of Sindh unutilised assets can fetch over $37 billion: Prime Minister​

KARACHI (October 28 2007): Prime Minister Shaukat Aziz has said that Sindh has the potential to generate through privatisation of unutilised assets more than 37 billion dollars, enough to pay off entire foreign debt.

Aziz was speaking at the distribution ceremony of "Achievement awards to leading industrialists and renowned personalities, 2007" held at the Sindh Governor House on Saturday evening.

Referring to a comment from Sindh Minister for Labour, Transport, Industries, Commerce and Co-operation Adil Siddiqui, the Prime Minister said that there were enough idle assets in Sindh that might be privatised and the sale proceeds utilised for retirement of debts.

He said that the national economy was in good hands. It was growing. "If looking back 1999, we had inherited problems of complex nature and to find out solutions was not easy." He added. He said "we were living tranche to tranche," and hastened to add that they believed in finding out solution of their problems as no one would come to them to find out a solution.

He said that the series of reforms in all the departments were carried out paid dividends. There were liberalisation, privatisation and corporatisation in all the sectors with a view to systematising management practices and business principles.

He said things were changed with a little bit of vision, and sense of direction. "Banking sector was suffering from bad debts, politicised administration and banking practices, poor customer services, inaccessibility to services and several other factors that contributed to services had brought financial institutions at the verge of disasters," he said, adding Rs 20 billion to Rs 25 billion were pumped in, and revolutionary measures were taken to make the sector healthy. It had now improved. He said that Pakistan had a robust banking sector today.

He said still there was room for improvement in the consumer lending services, agricultural finances and housing finances. "These areas are weak and in need of concerted efforts to make them effective."

He said that telephone industry and telecommunication sectors were progressing. "Teledensity has reached 60 percent, tariff rates have come down, employment opportunities in the sector have increased manifold, investment - domestic and foreign - has increased and there is overall an atmosphere of investment friendliness."

He said: "Investment comes when the investor sees and finds a stable government, continuation of its policies and continuation of reforms, good governance and support to good business practices. All these ingredients of a prudent investment and business-friendly policy are there and investors can take advantage of this situation."

He said that inflation was a challenge and food prices were going up, but this was a natural phenomenon. "When many people chase few things this phenomenon takes place. It is good sign and shows that our people have money and their purchasing power has improved. This is a sign of improved economic health."

He said: "We do not appreciate people who contribute toward making quality of life better. We do not recognise their work and fail to appreciate people who need encouragement."

He said that recognition of good work and words of appreciation gave energy to work better and improve upon previous performances. "People need encouragement." He said Pakistan was an exciting country with potential to grow and prosper. "This is an exciting country to be in."

He said that today's programme was to acknowledge good work done by the members of the business community toward the growth of economic activity in Pakistan. The Prime Minister also unveiled the plaque to inaugurate construction of a labour complex of 3,008 flats in the low-income area of Karachi.

He gave away awards and letters of appreciation to 34 industrialists, including two stockbrokers Arif Habib and Abdul Karim Dhedi and two builders - Rufi builders and Saima builders. Sindh Governor Dr Ishrat-ul-Ibad Khan, Sindh Chief Minister Dr Arbab Ghulam Rahim, Federal Minister Babur Ghauri, Sindh Industries Minister Adil Siddiqui and Pakistan Muslim League (Q) chief Chaudhry Shujaat Hussain were also present.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

20.36 percent rise in first quarter agriculture loans disbursement ​

KARACHI (October 28 2007): Agriculture-related loans disbursement by commercial and specialised banks surged to Rs 36.369 billion during July-September period of 2007-08 fiscal year against Rs 30.217 billion of FY2006-07, marking an increase of Rs 6.151 billion, or 20.36 percent, according to State Bank of Pakistan's statistics.

With 28.97 percent increase, five leading commercial banks, Allied Bank Limited (ABL), Habib Bank Limited (HBL), MCB Bank Limited, National Bank of Pakistan (NBP) and United Bank Limited (UBL), disbursed Rs 19.494 billion during the said period against Rs 15.115 billion of July-September 2006-07 and the full-year target of Rs 96.5 billion.

The performance of Zarai Taraqiati Bank Limited (ZTBL), the largest specialised bank, was rather poor as its disbursement declined to Rs 7.222 billion, or by 21.29 percent, against Rs 9.175 billion of July-September 2006-07.

Punjab Provincial Co-operative Bank (PPCBL) disbursement also showed a decline of 10.58 percent, at Rs 1.265 billion, as compared to Rs 1.415 billion of last year. The SBP statistics makes no mention of agri loan disbursed by domestic private banks (DPBs).

NBP was on top by loaning Rs 6.234 billion. ABL disbursed Rs 3.005 billion; HBL Rs 5.532 billion; MCB Bank Rs 2.792 billion; and UBL 1.909 billion. The SPB has set a target of Rs 200 billion for the current fiscal year against last year's Rs 166 billion, showing an increase of Rs 34 billion.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

No rupee devaluation: Shamshad turns down proposals ​

ISLAMABAD (October 27 2007): State Bank of Pakistan Governor Dr Shamshad Akhtar has turned down the much-talked about proposals for devaluation of rupee, saying it was unjustifiable, official sources told Business Recorder here on Friday.

"The demand from certain quarters for devaluation was not favoured because the currency rate was market-driven and fluctuated in manageable limits," sources quoted SBP Governor as briefing the Economic Coordination Committee (ECC) of the Cabinet on October 10.

Sources said that Commerce Ministry was one of the stakeholders, which had proposed devaluation of the rupee on the demand of exporters who are suffering for long high value of the rupee. She also briefed the ECC about inflationary trend in the country, expressing hope that non-food items and non-energy inflation was likely to reduce following the monetary policy in vogue.

In response to an observation about neglecting the textile industry in provision of export refinance, it was explained that some individuals, with genuine problems, had already been accommodated by SBP.

The SBP Governor did not like the comments of Minister for Textile Industry, Mushtaq Ali Cheema, saying that the textile sector had so far received cumulative support totalling Rs 1 trillion.

At the same time, she said, it was noted that the reasons for stress on the textile sector needed to be analysed more closely and a balanced policy be put in place to tackle the issues hurting the textile sector.

While reviewing the performance of stocks, it was reported that every day had been a record day at stock exchanges during the recent weeks. The buoyancy called for placement of discreet, yet robust, techniques and the tools of risk management, sources added.

The ECC also observed that sub-prime market, posing a serious threat to world economies, makes it imperative for Pakistan to remain vigilant. However, it was noted that the conservative approach of macro management, adopted by the government, had served the country well.

It was also pointed out that oil prices had impacted importing economies negatively, but Pakistan had successfully managed to tackle the crisis, sources said.

The ECC was also apprised that Pakistan's rating among investors had improved during the last three years, as reflected in credible transparency and business surveys published recently. It was observed that policies and political stability had contributed to investors' confidence.

"The Government has successfully managed the challenges of uncertainty and image-building, especially in the backdrop of developments in the tribal areas. Besides, Presidential elections had transpired to be a vote of confidence for the national economy," sources quoted the Prime Minister as saying in the meeting.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

TDAP and Deutsche officials meet to boost exports ​

KARACHI (October 28 2007): A two member delegation of Deutsche Forfeiting (DF) AG from Cologne, Germany met with Sajjad Malick, Executive Director, Export Finance Services of the Trade Development Authority of Pakistan (TDAP), says a press release.

DF as a financing company is looking to being facilitated in their entry into the Pakistani market with an array of export finance products to facilitate the country's exports under the rapid growth strategy.

DF offers benefits where risks are eliminated, liquidity is improved through disposal of accounts receivables of exporters, at a small discount and the net amount is placed at the disposal of the vendor immediately. The vendors of these receivables, in the form of promissory notes, bills of exchange, accounts receivables, L/C's, lease of receivables could be of exporters themselves or commercial banks who would like to manage their risk and exposure.

Forfeiting service immediately enables exporters to free up working capital and eliminates the need for additional lines of credit for their operations, consequent to improved cash flows while their exports are still in transit to their destination.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Nespak to build nine Tevta centres in Punjab ​

RAWALPINDI (October 28 2007): The National Engineering Service of Pakistan (Nespak) has been tasked to construct nine technical training centers for the Technical Education and Vocational Training Authority (Tevta) Punjab.

The institutions to be built in different parts of the province, including four polytechnic institutes, two polytechnic institutes for women, two surgical instrument institutes, and one textile institute, would help produce skilled manpower for the industrial sector of Pakistan, sources said while talking to Business Recorder.

Sources said that Tevta has signed an agreement with Nespak for the completion of 33 development schemes for Rs 1,713 million. The government has assigned the task of imparting technical and vocational training in the province to Tevta, which aimed at producing technically-sound workforce for public and private sector industries in the province, they said. Sources said the government efforts would help eliminate unemployment and poverty.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Growth setback due to unfavourable policies declares Springboard ​

KARACHI (October 28 2007): The Springboard Research, a leading innovator in the IT Market Research industry, today announced that the Pakistan PC/Server market witnessed a growth of 5.7% with 319,838 units shipped during 1H 2007 (January-June) as compared to the same period of the preceding year.

The lower than expected growth rate was mainly due to the government's unfavourable IT policies and continuation of the 15% GST, as well as from increased terrorist attacks and unstable political conditions. In addition to the GST, the government has shown little support for the IT sector, as it has not announced any new policy or allocations for the sector.

However the government has continued with its IT industry development plan, although its actions and policies do not seem to be in sync with desired growth for the sector. "Pakistan's IT market is in between a "growth" and "decline" stage, where the country's political stability will play a major role in overall market performance, commented Rehan Ghazi, Springboard Research Analyst.

"Also, before the imposition of the 15% GST in June 2006, Pakistan's PC/Server market was a "diamond in the rough", but since then, a downward trend has been noticed. The government's recent decision not to withdraw or reduce the GST has weakened the growing IT market in the country, as well as decreased the confidence of MNC's" Ghazi added.

Among MNC's, HP continued to lead the market with 6.3% share of total PC shipments in 1H 2007, followed by Dell and Acer. The x 86 server segments dominated the market during this period and experienced a growth of 7.7% year-on-year, followed by the desktop and notebook segments. However, for the rest of 2007 and 2008, the portable segment is expected to lead overall PC market growth. This expectation is fuelled by the introduction of the Intel PC Classmate Program in 1H 2007, which will drive procurement of notebooks from the education sector in upcoming quarters. Apart from this, the adoption of notebooks from the home segment is also on the rise in the country.

In the application segments, the large enterprises, especially in the telecom, banking and finance sectors continued to be the largest procurers of IT solutions in the market, registering an annual growth of 21% in 1H 2007, followed by the government and medium enterprises.

As noticed after the imposition of GST in 2006, the grey and refurbished markets have continued to flourish substantially affecting branded machine sales in Pakistan. According to channel partners, around 15-20% increase was seen in the grey market business in the past few quarters and this trend is expected to continue/gain momentum in the future.

The negative spiralling effect created by unfriendly government policies, is expected to continue in the upcoming few quarters. Springboard Research also expects the second half of 2007 and beginning of 2008 to be politically turbulent. Considering the current market scenario and political climate, Springboard forecasts a marginal growth for 2007. Nevertheless, from the fourth quarter of 2007 onwards (October-November), the market is expected to start picking up, as the Intel PC Classmate program will perk up the portable market in the country. Pakistan's government and large enterprises also expected to continue with their automation and IT up-gradation programs.

Business Recorder [Pakistan's First Financial Daily]

 

[PakForce Unlimited]

Pak cement reaches India​

NEW DELHI: For the first time in history, two wagons laden with Maple Leaf and Lucky Pakistan cement have reached India.

General Secretary of Cement Dealers Association Shaikh Asif Saeed stated this here. He said that Prime Minister Shaukat Aziz would inaugurate the custom and warehouse at Wahga border after which export of cement would be started through land route.

Initially, two bogies of Samjhota Express have been allotted which would be increase later, he added.

Link: Pak cement reaches India

 

[Neo]

Pakistan may hit 7.2 pct 07/08 growth target: SBP ​

KARACHI: October 29, 2007: Pakistan may achieve its economic growth target of 7.2 percent in fiscal year ending June 2008, the State Bank of Pakistan (SBP) governor said on Monday.

"The economy will probably grow in kind with real GDP (gross domestic product) projection of 7.2 percent," Shamshad Akhtar said at a news conference to unveil the SBP's annual report for fiscal year 2006/07.

Akhtar said the current account, which balloned to $7.2 billion or 4.9 percent of GDP in 2006/07, was manageable but remained a challenge due to a slowdown in exports.

"The external current account, though sustainable in the short-term, remains the single-largest challenge," she said.

Weak exports pushed the country's trade deficit in the fiscal year 2006/08 to $13.49 billion, an increase of 11.4 percent over the previous year.

Brecorder.com

 

[Neo]

Traders eying six million tons cement export to India ​

NEW DELHI (October 29 2007): After acquiring provisional certification from the Bureau of Indian Standards to sell their product in cement-hungry India by seven Pakistani companies, Pakistani traders are eying export of six million tones of cement per annum. "Times of India" reported India would replace Afghanistan as the largest export market for Pakistani cement by the end of 2007.

Cheaper than Indian cement, Pakistani cement which sells in India in the price band of Rs 235-250 per bag, will make it much more attractive with the Indian construction and real estate boom.

During the last Pak-India trade talks in New Delhi, some decisions were made to remove barriers by India for Pakistani exports. Pakistan is surplus in cement and India can become heaven for the Pakistani cement exporters as cost of transportation will be low as compared to other countries.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

The long wait for market access​

Pakistan, it seems, will have to patiently wait for another six months before its economic diplomacy bears fruits and a breakthrough in terms of greater market access for its exportable merchandise in the western markets is achieved.

This was the subtle message that our able trade managers got when they put up the case of Pakistan, the umpteenth time, in Brussels to be treated at par, if not preferentially, with its competitors in the region. Of the seven South Asian nations four (Bangladesh, Maldives, Nepal and Bhutan) have a freer access in the huge European market for being categorised as LDCs (least developed nations) that the union wants to support as its responsibility towards poor of the world.

Sri Lanka for reasons not very clear enjoys GSP+ (general system of preference plus) status. Nations covered under the scheme enjoy 15 per cent subsidy in tariffs on their exports. With India that like Pakistan does not get covered by these schemes, the European Union has initiated negotiations for a free trade agreement (FTA). That leaves Pakistan high and dry, all by itself in the sub-continent.

Trade experts consider the trade discrimination by the West against Pakistan a policy gesture of western governments to express their displeasure over the country’s political system. “It will require more than skills of persuasion and marketing to get increased market access in US and Europe. They want to have closer trade relations with stable democracies. Our brand of democracy with a military general at helm affairs does not sell there. We will have to learn to behave like a civilised nation to be able to develop closer, cordial commercial relations with the advanced nations of the world”, an old time trade negotiator told Dawn.

“This has nothing to do with politics”, Humayun Akhtar Federal Commerce Minister told Dawn over telephone from Islamabad. “Yes, we have not been given any commitment so far that the European Union will initiate negotiations for a free trade agreement with Pakistan as a result of the study that has been initiated by the most powerful regional grouping to analyse the discriminatory impact of its trade policy in South Asia on Pakistan’s economy”, the minister accepted.

“Over the years, we lobbied hard to qualify for GSP+ status to secure better terms of trade for Pakistan in EU but did not succeed. We, however, cannot afford to give up. Now we are engaged in bilateral trade talks with EU and succeeded in persuading them to form a sub- group to look into Pakistan’s trade related demands. In May this year the sub-group met in Islamabad and on October 16 the second round was held in Brussels. We try to sell Pakistan as a high growth country with a promising economic future”, the minister worried for dwindling textile export growth disclosed.

He was sounding disappointed with the stubbornness of the West that refused to oblige to, what he calls, “just and logical demands of Pakistan”, despite its role in West sponsored ‘war on terror’.

“Pakistan’s tariff regime is liberal. Those are actually non-tariff barriers that are coming in way of achieving better terms of trade for Pakistan”, Tanvir Ahmed Sheikh, President Federation of Chamber of Commerce and Industry said responding from abroad to a call by this scribe.

He viewed the political system in place in the country to be the cause that earned Pakistan ire of leaders of powerful western countries with attractive markets. “The private sector is suffering from the discrimination meted out to them in developed markets. The government should do all it takes to get us terms that offer the manufacturers even playing field in the preferred markets with our competitors”, he said articulating his concern for the difficulties that the textile exporters are facing in Europe.

The trading partners are demanding restoration of democracy that local business class and other privileged segments did not find so comfortable to work with in the past. “It is their dilemma, they are not enthusiastic about democracy but need markets abroad to sustain their business that is denied to them because of the lack of democracy”, an expert said.

How the private sector reconciles its two positions is hard to understand? It is, for the time being, leaving no stone unturned and is reaching out to all relevant quarters to get assurance that rules of the game that are tilted to suit its interests, will not be changed with possible political changes in Islamabad.

The economic diplomacy has become a key element of a country’s foreign policy targeting to protect and promote her commercial interests in an era of globalisation and to face the challenges and exploit opportunities thrown up by a fast integrating world. The question is how far is it succeeding?

The long wait for market access -DAWN - Business; October 29, 2007

 

[Neo]

Creating ‘edible oil zone’ in Potohar plateau​

ABOUT two-thirds of the domestic requirements of edible oil are met through imports. Its import increased from 1.197 million tones in 2001-02 to 1.695 million tones during 2005-06.

A huge amount in foreign exchange is spent every year on imports, which can be cut significantly by enhancing domestic production of edible oil seeds. And the Potohar area has great potential for growing edible oil crops.

Agriculture in Potohar area is totally dependent on rainwater. The insufficient and uneven distribution of rainfall increases the risk involved in crop production. Water scarcity coupled with land fragmentation has lowered farmers’ income from wheat to such an extent that they consider it a part time business only.

However, there is a large contingent of oilseed crops that have proven to be promising in the area, which include rapeseed, mustard, groundnut, sunflower, sesame and olive.

It is desirable to look at the Potohar agriculture from entirely a new perspective, just like rice zone and cotton zone, an ‘edible oil zone’ can be created in this area. The only need is to install oil expellers and processing units for brassica, groundnut, sesame, sunflower, and olive in Potohar.

Such a move would help boost oilseed production and help farmers make more money out of their lands, and reduce the import bill.

While some of the oilseed crops are grown in the area, these cannot compete with common cereal and cash crops for lack of market. All efforts to proliferate oilseed crops will go waste until farmers find better market of their produce, which can be provided by installation of oil expeller. The success stories can be seen in case of sugar mills. Where there is a sugar mill, farmers prefer to grow sugarcane, where corn-processing units have been set up, farmers have started growing more corn.

Factories themselves ensure production of the required crop by providing incentives to the growers so that they may not fall short of raw material.

Rapeseed and mustard have been grown for oil production in Potohar for years. However, the oil was not fit for human consumption because of its pungent smell and bitter taste due to presence of toxic compound called erucic acid.

Recently, cultivars named canola have been evolved whose oil is fit for cooking and human consumption. Rapeseed and mustard have direct competition with wheat, as both are grown in the same season.

Farmers prefer to grow wheat, as it is the staple food and subsistence crop. Rapeseed monoculture on large blocks of five to 10 acres is rare. It is now diverging mostly into intercrop with winter fodders and wheat and cash crop in ‘Zaid Kharif’ season.

Peanut is an important oilseed crop of the dry farming system. Its oil is edible and serves as excellent cooking oil. The nuts (un-shelled) have 33 per cent oil. It is free of toxic compounds and contains no linolenic acid, which causes oxidative rancidity (off-flavour) in other vegetable oils.

Groundnut requires light soils, which is necessary for the penetration of the flower pegs into the soil for pod formation. Light soils also offer easy digging and minimum harvest losses. Due to this specific requirement, its cultivation remained confined to sandy and light soils, which are abundant in Rawalpindi division.

Sunflower seed contains 25-32 per cent oil. It was introduced in early sixties as an oil crop. Its expansion remained restricted due to the absence of systematic follow up and adequate market mechanism.

Sunflower was grown on maximum area of 144,190 hectares, during 1998-99, with 194,540 tons production. During 2002-03, it was grown on an area of 107,720 hectares producing 128,530 tons seed.

Sunflower oil is comparable to olive oil. It is rich in linoleic acid, the essential fatty acid. Hence it is valuable cooking oil. It can be successfully grown in summer on fallow lands.

Safflower is a low moisture-loving crop and therefore, can do better in rain-fed areas and on residual moisture. It has deep roots and can meet its water requirements from zones as deep as two to three meters.

Because of the same reason, it can help reclaim soils with high water table. However, the spiny nature and long maturing period of the crop, subdue its promotion and acceptance even in the presence of such strong advantages. Mechanisation in the harvest or production of new spineless varieties can help to overcome this constraint.

Sesame is one of the most ancient oilseed crop grown in the sub-continent. It requires more heat and light but is sensitive to low temperature.

Its seed contain 45 to 55 per cent oil. The oil is of good quality, odourless and not liable to become rancid due to the presence of sesamolin in the oil, which on hydrolysis yields a powerful antioxidant sesamol.

The most attractive trait in sesame is its very short duration, besides its tolerance to marginal lands. Therefore, it has large scope for expansion in rain-fed areas.

Last but not the least, olive, a popular oil crop of the world, is well known for its cooking oil. The domesticated varieties of olive can be planted successfully in the Potohar area.

Creating ‘edible oil zone’ in Potohar plateau -DAWN - Business; October 29, 2007

 

[Neo]

Rural dairy farming and alleviation of poverty​

THERE are about 125 million livestock in the country, of which 50 per cent are large ruminants (cattle and buffaloes) and 50 per cent small ruminants (sheep and goats) which is growing at a rate of 3–5 per cent annually.

Punjab and Sindh are the major holders of the livestock i.e. 52 per cent and 26 per cent respectively with the best milch breeds of cattle and buffaloes. The area is suitable for dairy farming with a lot of potential for its growth. The sector is important both from food security point of view and job opportunities for around 10 million people of Sindh. The country is earning about Rs60 billion from dairy export every year.

About 75 per cent of the rural population is engaged in livestock rearing and its livelihood depends on this important sector.

Livestock contributes about 9.4 per cent to the GDP, and 40 per cent value addition to agriculture sector. More than 90 per cent farmers are small holders and possess about 1-4 animals. Hardly five per cent have more than 100 animals and are busy in their farming business at commercial level.

Production of livestock products per year is as under:

The per capita per annum availability of milk in the country is 80.5 litres, and meat 16.5 kg which is far below the minimum required level of 27.5 grams of protein daily. Because of the acute shortage of animal protein in diet, people are prone to various diseases particularly in the less developed areas where the poor live.

The rural areas of the country are suitable for livestock rearing and the people, both male and female, have the knowledge of rearing livestock. It is, therefore, necessary that they are provided with facilities to own livestock and rear them properly with the following objectives:

To increase milk and meat production; provide jobs to unemployed rural people, specially rural women; increase income of rural people; alleviate poverty in rural and less developed areas; help develop rural areas and eradicate social evils; provide food security; increase efficiency of agriculture sector; provide security against crop failure; reactivate closed milk plants; improve milk collection system and increase export earning.

Each farmer’s family should be provided with a credit facility from agriculture bank/or any other commercial bank on easy terms and condition like takawi loan for purchase of 10 milking animals i.e. six buffaloes and four cows as mixed dairy farming is more profitable. These dairy farms should be provided with required high protein diet so that the milk contains more than six per cent fat. The recovery of credit may be started after one month from the date of purchase of animals on weekly basis through a planned and well-established system.

In the first phase, in each district about 5,000 farmers should be provided with such credit for purchase of 10 milking animals (newly calved) i.e. about Rs0.5 million including money for the purchase of cans, ropes, chains, buckets and other relevant accessories with 15 days ration / fodder etc.

Each farmer would thus manage to produce about 40 to 50 litres of milk a time and 100 litres a day. This way each district will produce an extra 0.5 million litres of milk a day. Due to improved management and availability of feed in the area production of milk would increase by 30 to 40 per cent.

Districts for dairy farming and animal breeding should be carefully selected for the purpose i.e. Malir in Karachi, Hyderabad, Badin, T.M. Khan, Tando Allah Yar, Matiari, half of Sukkur and half of Mirpurkhas, half of Jamshoro, Dadu, Naushehro Feroze, Shikarpur, Larkana, Sukkur and Ghotki in Sindh. This way about 7.5 million litres of milk would be produced daily and about 350,000 male and 350,000 female cow and buffalo calves would be produced yearly with more manure for agricultural land.

To purchase milk from farmers and provide them technical facilities, a concept may be adopted based on the pattern exercised in India, where milk collection all required services are provided through one-window operation at a centre called dairy development and extension centre.

Every village with a population of about 500 farmers should be provided with a dairy development and extension centre. The centre should register the farmers of the area and provide them with facilities of milk collection; supply of processed feed; artificial insemination service; health services; parasite control; natural breeding services through high pedigreed bulls; supply of multi-cutting, fodder seeds; credit facilities; and arranging cattle shows to create a sense of competition among the farmers. The centre should also arrange training of farmers both male and female on modern farming system.

Animal health, parasite control, breeding and training services should be provided free of charge, where as other services should be provided on no-loss and no-profit basis.

These dairy development and extension centres should be linked with milk plants (at least 30 centers with one milk plant). These milk plants should arrange credit facilities through banks on easy terms and conditions and collect milk / from these centers, through tankers and arrange training of milk collectors and technical persons working at the centres. Modem techniques of livestock management and production, competitions should be arranged among these centres and awards ceremonies held for best workers, milk collectors, farmers and fodder growers.

The recovery of credit, feed and other service charges should be made from the income of milk on weekly basis with 1-2 per cent additional charge for development of the area like, roads, school buildings, furniture, medical and maternity facilities etc. in consultation with the farmers / members of the centre.

New systems of milk marketing on pattern of India may be introduced i.e. sale through milk booths, both in localities of the rich and the poor, with high and low fat contents along with other products like, yoghurt, ice cream, ghee, lassi etc.

The programme, if introduced, would upgrade the livestock of the country by introducing high yielding animals and specially breeding bulls in the farming system, and modernise the technology of keeping animals healthy and productive.

Through this project in addition to other benefits, about 75,000 unskilled and about 25,000 skilled workers may be engaged in dairy jobs.

Rural dairy farming and alleviation of poverty -DAWN - Business; October 29, 2007

 

[Spring Onion]

Pakistan cbank says may hit 7.2 pct 07/08 growth target

KARACHI, Oct 29 (Reuters) - Pakistan may achieve its economic growth target of 7.2 percent in fiscal year ending June 2008, the central bank governor said on Monday.

"The economy will probably grow in kind with real GDP (gross domestic product) projection of 7.2 percent," Shamshad Akhtar said at a news conference to unveil the central bank's annual report for fiscal year 2006/07.

Akhtar said the current account, which balloned to $7.2 billion or 4.9 percent of GDP in 2006/07, was manageable but remained a challenge due to a slowdown in exports.

"The external current account, though sustainable in the short-term, remains the single-largest challenge," she said.

Weak exports pushed the country's trade deficit in the fiscal year 2006/08 to $13.49 billion, an increase of 11.4 percent over the previous year.