Pakistan's Economy - News and Updates

[quang minh]

While reviewing the sector-wise trends of exports the TDAP disclosed that textiles and clothing, agro-food and metals and minerals have shown an upward trend over the previous year.

 

[Bilal9]

ISLAMABAD: Exports of surgical goods and medical instruments during first seven months of current financial year grew by 7.67 percent as compared to same period of last year.
During the period from July-January, 2013-14, surgical goods and medical instruments worth US$ 191.422 million exported as compared to US$ 177.785 million exports of corresponding period of last year.

Mashallah excellent news!

Slightly OT question: Is Sialkot the sole city/region driving this export of surgical goods and medical instruments ?

 

[Chak Bamu]

Mashallah excellent news!

Slightly OT question: Is Sialkot the sole city/region driving this export of surgical goods and medical instruments ?

Not really, but Sialkot is the major player because people of the area have a very strong work ethic and aggressive attitude to earning money.

 

[NaMaloom]

Err, to my knowledge Sialkot has a long way to go to meet international standards of manufacturing medical instruments and surgical goods. I cannot yet post a link here but everyone is welcome to search for news article titled,

"Why does so much of the NHS's surgical equipment start life in the sweatshops of Pakistan?"

by Louise Tickle in The Independent (UK newspaper) dated January 19th, 2015

 

[Zibago]

Pakistan to forward TTA draft to Turkmenistan soon

 

[Qalandari]

Any updates ?

 

[salman77]

Pakistan in deals to export 250,000 T sugar

Pakistan has signed deals to export 250,000 tonnes of sugar, after the government approved in December a subsidy of $100 a tonne for overseas sales of 650,000 tonnes of the sweetener lying with its mills, a top industry official said.

Rising shipments from Pakistan in an amply-supplied world sugar market could further depress the benchmark New York prices that sank to their lowest level since 2010 on Tuesday and are on track for their fifth consecutive annual drop.

Mills in Pakistan have sealed export deals at $370-$400 a tonne for prompt deliveries to the buyers in Africa, Central Asia and the Middle East, Iskander Khan, chairman of the Pakistan Sugar Mills Association, told Reuters.

Pakistan produces about 6 million tonnes of sugar but consumes only around 4.5 million tonnes a year. It has been struggling to export the sweetener to shore up the deteriorating financial health of its mills hit by two straight years of surplus output, which has hammered domestic prices.

Local sugar prices have dropped 13 percent over the past six months, falling below the cost of production and stoking worries about mills going bust.

"We are making sugar for 64 rupees ($0.63) a kg and selling at 45 rupees a kg. How will I pay farmers?" Khan asked.

The weak local prices could force about 20 sugar companies to shut shop, depriving cane growers of their dues, he said.

Neighbouring country India, the world's top sugar producer after Brazil, is also awash with the sweetener after five years of surplus output and recently decided to give mills a subsidy for exports to help cut stockpiles.

It has signed deals to ship out 50,000 tonnes of raw sugar in the first overseas sale of the season that began in October.

But traders believe that India will struggle to export, despite the government subsidy, as global prices remain weak in anticipation of large supplies from Brazil. (Editing by Mayank Bhardwaj and Himani Sarkar)

Pakistan in deals to export 250,000 T sugar, subsidy helps| Reuters

 

[salman77]

Ukraine eyes more than $1bn trade potential with Pakistan

ISLAMABAD: The Ambassador of Ukraine Volodymyr LAKOMOV said that Pakistan and Ukraine has the potential to increase current volume of less than US$ 200 million bilateral trade to beyond USD1 billion by enhancing collaboration between their private sectors.

He said this while interacting with business community during his visit to Islamabad Chamber of Commerce and Industry. He said that during the last couple of years, Pak-Ukraine trade has witnessed significant improvement, however, there was lot more scope to improve it. He said that Ukraine has signed an association agreement with European Union which would help it integrate into Europe. The agreement also includes a free trade zone deal with European Union and added that by enhancing cooperation with Ukraine, Pakistani businessmen could get easy access to $17 trillion Europe’s market.

He said that Ukrainian entrepreneurs were eager to promote trade with Pakistan and were looking for permanent partnerships with Pakistani counterparts. He said ICCI should sign MoU with Ukrainian Chamber of Commerce and Industry to promote private sectors connectivity so that businessmen of both countries could play positive role for enhancing trade relations. He assured that his Embassy would facilitate such initiatives to further strengthen and deepen commercial ties between Pakistan and Ukraine.

In his welcome address, Muzzamil Hussain Sabri, President, Islamabad Chamber of Commerce and Industry said that Pakistan and Ukraine enjoy good relations since long that should be transformed into growing trade and economic relations. He identified energy, agriculture, textile, food processing, fruits, steel, mining & minerals, machinery & equipment, transport and chemicals as potential areas of cooperation between the two countries.

He said there existed great potential for increasing bilateral trade and emphasized that both countries should consider signing a preferential trade agreement to tap all untapped areas of mutual cooperation. He said sector-specific efforts should be accelerated to start a new era of trade and economic relations between the two countries.

Muzzamil Sabri urged that both sides should enhance exchange of trade delegations, organize trade fairs and single country exhibitions, which could play a significant role to achieve the desired goals. He said both countries should explore establishment of direct communications links that would facilitate two-way trade. He said ICCI was ready to sign MoU with Ukrainian CCI and would consider taking a delegation to Ukraine in order to explore new avenues of mutual cooperation between the two countries.

Muhammad Shakeel Munir Senior Vice President, Muhammad Ashfaq Hussain Chatha Vice President, Islamabad Chamber of Commerce and Industry, Khalid Chaudhry, Tahir Abbasi and others were also present at the occasion.

Ukraine eyes more than $1bn trade potential with Pakistan

Pakistan secures Chinese order for 1,500 tons rice

A Chinese delegation of grain traders, which is on a visit to Pakistan, has signed an agreement for the import of 1,500 tons of rice from Pakistan.

According to a press release, the 10-member delegation of the Guangdong Grain Association met with representatives of the Rice Exporters Association of Pakistan (REAP) at the head office of the Trade Development Authority of Pakistan (TDAP) here on Wednesday.

The business-to-business meeting of the two associations was arranged by the TDAP, which was held in a friendly atmosphere. The participants discussed issues related to rice exports to China and their possible solutions.

Earlier on March 23, the Chinese delegation visited a rice processing factory in Karachi, which was arranged jointly by the TDAP and REAP.

The delegates showed satisfaction over the quality of rice and standard of the processing factory. They will also visit Lahore and Islamabad in order to continue negotiations with the relevant authorities.

Pakistan secures Chinese order for 1,500 tons rice | Pakistan Today

 

[Kurlang]

Sales of above 70cc bikes grow 22pc

KARACHI: Consumers are now more inclined towards high engine power bikes and sales of such bikes may remain strong in the coming months if low petrol price persists.

Industry sources said that sales of above 70cc bikes grew by 22 per cent in July-February 2014-15 as compared to the same period in last fiscal year.

The difference in urban and rural buying of motorcycles is no more a major factor. Besides, fuel efficient engines and comfort of riding above 70cc bikes also lure buyers for whom high price of 100-125cc bikes appears affordable. The tilt towards above 70cc bikes has been in vogue for the last five years.

“We expect sales of above 70cc bikes to grow in the current fiscal year due to a variety of factors including fuel economy,” a bike dealer at Akbar Road said.

Pak-Suzuki Motor Company Limited (PSMCL), which produced 15,326 bikes in 2008-09, sold out 24,358 units in 2013-14. In July-February 2014-15, its sales stood at 14,661 units.

Realising shifting trend in the last few years, some assemblers opted to introduce new products based on 100cc and 125cc engines. An international new player has entered the market with products based on 125cc bikes.

The size of motorcycle market in Pakistan was 1.3 million units in 2009-10. The size of three-wheelers during the period was around 45,469 units. These included two-wheelers used as prime movers for three-wheelers.

The number of 70cc motorcycles produced during the period was 1.17 million units. Those of 100cc were 47,549 units. Motorcycles of 125cc were 113,217 units. Thus in 2009-10, production of 70cc was 88pc of the total market. As of 2013-14, bike production was around 1.52 million and 83pc of these were 70cc.

On the other hand, during the same period, share of 125cc motorcycles in the two-wheeler market increased from 8pc (113,217 units) in 2009-10 to 13pc (200,983 units) in 2013-14.

Year-wise growth of 70cc engine capacity bikes had been 2010-11 (11pc), 2011-12 (2pc), 2012-13 (Nil) and 2013-14 (1pc).

This magnitude in drop in growth rate can be appreciated when seen in the backdrop of growth in production in 2009-10, which was 47pc. Total production of motorcycles in 2008-09 was 910,753 units and it grew to 1.33m in 2009-10.

The annual cumulative average growth rate (CAGR) for 2000 to 2010 was 35pc.

When analysed in this backdrop the ‘standalone’ growth in 125cc and 100cc category, each is reflected to be around 24pc in the five years period under study.

The 70cc had literally dominated the country’s roads due to low price and affordable maintenance cost. But it seems that its growth has eluded.

Some people facing difficulties in maintaining cars which they already have are seen switching towards above 70cc bikes which gives them social recognition as well as mobility they can afford, a bike dealer said.

Published in Dawn, March 29th, 2015

Export proceeds from non-textile products fall

Export proceeds from these products fell to $6.826bn in July-Feb 2014-15 from $7.704bn last year. -Reuters/File
ISLAMABAD: Pakistan’s export of non-textile products witnessed a negative growth of 11.39 per cent during the first eight months of this fiscal year from a year ago.

In absolute terms, export proceeds from these products fell to $6.826 billion in July-February 2014-15 from $7.704bn in the corresponding months of last year.

In the 2014-15 budget, the government announced to provide support on export of nine value-added non-textile products, but the decision is yet to be notified by the government despite a lapse of seven months.

The support scheme was announced for leather manufacturers, footwear, sports goods, surgical, engineering goods, furniture, meat and meat products, fish products and cutlery.

Exports from the non-textile sector are witnessing a declining trend since July 2014, but the Ministry of Commerce has yet to take corrective measures for arresting the fall.

Last year, export of non-textile products reached $11.40bn from $11.42bn in the previous year, showing a decline of 0.18pc.

Product-wise details show a decline of 12pc year-on-year in export of petroleum products. Petroleum naphtha led the decline in the petroleum sector’s export. However, exports of petroleum crude witnessed an increase of 100pc and petroleum products 7.50pc.

Export of carpets and rugs witnessed a negative growth of 5.18pc during July-February 2014-15 period of this fiscal year from a year ago.

Export of sports goods dipped by 3.08pc year-on-year during the months under review. Foreign sales of footballs were also down by 3.06pc.

Export of tanned leather witnessed a negative growth of 3.06pc in July-February 2015 from a year ago.

Leather products’ export declined by 4.22pc during the period under review. All value-added leather products witnessed decline in exports in July-February 2014-15. However, export of leather gloves witnessed a growth of 9.16pc during the period under review.

Export of footwear swelled by 18.73pc, mainly driven by 23.70pc increase in export of leather footwear. This is the only sector which witnessed an impressive growth during the first eight months of the current fiscal year from a year ago.

The growth in footwear was mainly because of preferential market access in the EU market because of GSP Plus scheme.

Export of surgical goods and medical instruments went down by 0.14pc and engineering goods dipped by 27.54pc during the period under review over last year.

Year-on-year export of gur was down by 7.50pc, cement 2.37pc, molasses 66.93pc, and jewellery 98.40pc during the first eight months of this fiscal year from a year ago. However, export of furniture was up by 1.65pc and handicraft 473.41pc.

In the food basket, export of rice witnessed a decline of 6.58pc in the first eight months of this fiscal year from a year ago.

The decline was witnessed in export of both basmati and non-basmati rice. Export of meat, sugar, oil, wheat, tobacco, leguminous vegetables, vegetables also witnessed a decline during the period under review.

However, export of spices witnessed an increase of 23.93pc during July-February 2014-15. Exports of fruits also witnessed an increase of 0.72pc during the period under review.

 

[A1Kaid]

Pakistan to attain seven pct GDP growth target, says Dar | ARY NEWS

 

[Kurlang]

Nepra announces cut in power tariff rates

The rate-cut would not apply on those users who consume less than 50 units of electricity per month.— DawnNews screengrab

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday notified a Rs1.23 per unit decrease in electricity rates for consumers of K-Electric and a Rs2.08 per unit slash in the rates for consumers of all other distribution companies (Discos).

The fuel adjustments worth Rs13 billion would be passed on to consumers during the billing month of April 2015 out of which Rs1 billion would be received by K-Electric users and Rs12 billion would be passed on to users of all other Discos.

The rate-cut would not apply on those users who consume less than 50 units of electricity per month.

Fuel worth Rs55.75 billion was spent for the generation of 6.8 billion units of electricity consumed by the users of all Discos apart from those of K-Electric.

The actual fuel cost for January 2015 was determined at Rs9.27 per unit against corresponding determined fuel charges of 11.36 per unit.

It was reported that the highest share of furnace oil-based plants at 45.4 per cent in total power supply was generated at Rs10.26 per unit while 9.42pc generation came from high speed diesel with an average cost of Rs15 per unit, followed by 23.3pc generation from natural gas amounted to Rs4.2 per unit. Only 13pc generation came from hydropower with zero fuel cost while fuel cost of 5.65pc generation from nuclear power cost came at Rs1.17 per unit.

K-Electric had sold 1.06 billion units of electricity to consumers during the month of December 2014.

Under the automatic fuel adjustment formula Nepra is required to determine the difference of fuel cost every month and directly pass it on to consumers.

Zero effect, say experts

Independent economists agree that the trickledown effect has had no effect on the lives of lesser mortals.

Former chief economist Dr Pervez Tahir says that while inflation is down, one sees no cheers on the faces of ordinary folks. “Other improvements that the ministers brag about — ratings, stock exchange, donor endorsements — do not make any sense to them. What does make sense to them is continued loadshedding, shortages even with historically low oil prices, fears of scarcity of flour amidst plenty of wheat, rising school and health costs and so on,” he says.

“In short, they see a government ineffectively busy in issues that do not concern them. The economic incompetence does not have a parallel in living memory. The people see the opposite of what was promised. Instead of breaking the begging bowl, they see the glorification of increasing debt. Energy is left to MOUs that do not have a timeline. For jobs, they have threats of privatisation. The poor seems to have been assigned permanently to mechanisms like the Benazir Income Support Programme (BISP). There is not much difference between the cricket team and the economic team!”

Former finance minister Dr Hafiz Pasha blames the government decision to exorbitantly increase procurement price for the “significant upward swing” of the prices of food items.

“The price of staple food items like sugar, wheat and vegetable ghee has not been brought down. To protect the interest of big farmers, wheat and sugar price was almost increased by Rs9 per kg. The prices of wheat byproducts have witnessed gradual increase. This is the outcome of the imposition of regulatory duty of 20pc on sugar import and 25pc on wheat. As a result, the prices of these staple food items which are mostly in use of common people are artificially raised. Contrary to this, the government has provided subsidies on export of these commodities to give benefit to the foreign consumers,” he says.

“The trickledown is not there though the government reduced petroleum prices. Still, it is not clear how much benefit in oil price was transferred to the local consumers. High speed diesel, the main fuel in the transport sector, was subject to 37pc sales tax. The trickledown effect will only be visible in case government’s policies focused on bringing the food prices down. The maximum benefit should be passed on to the end consumers. We should have used the fall in international price to reduce the price of food items so that the trickledown effect could reach the consumers,” he concludes.

Faisal Bari, a Lahore-based economist and academic, notes that while the inflation is down and the rupee is stable, there still is low level of economic growth. “We cannot achieve rapid poverty reduction or even reduce inequality with this level of growth. Now, to achieve those, we need a higher level of growth or much stronger re-distributive policy that takes assets and resources from the rich, and give them to the poor.

“Our taxation system and our social protection policy or even the expenditure on health and education are not strong means of re-distributing resources. Hence, with the current state of economy, it is almost impossible to achieve any poverty reduction targets. What we need is significant policy shift,” he asserts.

Former caretaker finance minister and a leading World Bank official Shahid Javed Burki is clear on the way things should move. “Much of the economic gains have been captured by the rich. The gains are going to the urban rich, and not to the rural well-to-do as was the case in the past. The only way to address this is via fiscal policy; by increasing taxes on the urban rich.”

Published in Dawn March 22nd , 2015

 

[salman77]

Russia shows its readiness to renovate Pakistan Steel Mills

ISLAMABAD: Russian Ambassador to Pakistan Alexey Y. Dedov said that his country was ready to renovate Pakistan Steel Mills, Karachi and in case of its privatization, Moscow would mull over whether to bid for it or not.

“We demonstrated our readiness in modernization of these Steel Mills. In general we are ready to participate in renovation of the PSM. But as for purchasing shares, first of all Pakistani government should finally decide what to do with these mills, whether to renovate or to privatize,” Alexey told APP in an interview here.

In case of its privatization the decision would be taken keeping in view its price or other aspects because then it would be a commercial deal, he added. Pakistan Steel Mills is largest industrial mega corporation with a production capacity of 1.1-5.0 million tonnes of steel and iron foundries.

When questioned on the construction of floating Liquefied Natural Gas (LNG) terminal at Port Qasim in Karachi and gas pipeline, he said “these projects are also in the sphere of our interest and we are already participating in it. So far there are some practical steps ahead in term of our negotiations and the process has already been launched.”

Our company Global Resources is already in negotiations with Pakistani side concerning this gas pipeline from Port Qasim Northward and he hoped there would some practical outcome of these talks.

When asked what hampered boosting trade between the two countries, he said there existed an old problem of “unsettled mutual debt obligation” of US $120 million pending resolution since 1990s”. The ministries of finance of the two sides were working to sort it out, he added.

In the existence of this issue, Russia cannot provide state guarantees on state loans until this issue is resolved. Actually some Pakistani companies had supplied goods to Russian firms but were not paid.

However, he said that ministries of the finances of the two countries had agreed to draft an agreement to resolve this issue, “so we are moving ahead in this direction,” though in slow pace, he said. Russian side has given its draft to Pakistani side and is waiting its response, he added.

The envoy said that the aggregate bilateral trade between Moscow and Islamabad was $460 million in last two years and the main reason for this was a drastic fall of Pakistani demand for importing Russian iron and steel as it used to be $ 60 million which slumped to $17 million per year. However there were some “positive trends” as Pakistan was exporting toys and sports goods to Russia.

He stressed bilateral exchange of business delegations for establishing direct links between Russian and Pakistani entrepreneurs. He said Russian honorary consul in Lahore Habib Ahmed had been engaged in organizing tourists and businessmen trips between the two countries.

On Free Trade Agreement between Russia and Pakistan, he said it is on the table but there is a lot of work to be done in this regard.

Russia shows its readiness to renovate Pakistan Steel Mills | Customs Today Newspaper

 

[Matrixx]

 

[Viper0011.]

Zero effect, say experts Independent economists agree that the trickledown effect has had no effect on the lives of lesser mortals.

Former chief economist Dr Pervez Tahir says that while inflation is down, one sees no cheers on the faces of ordinary folks. “Other improvements that the ministers brag about — ratings, stock exchange, donor endorsements — do not make any sense to them. What does make sense to them is continued loadshedding, shortages even with historically low oil prices, fears of scarcity of flour amidst plenty of wheat, rising school and health costs and so on,” he says.

Former chief economist in who's time? Mushy the bushy or Corrupt-Dari (Zardari's)??? Of course to him all these hundreds of projects producing jobs, building power plants, dams, schools, universities, canals, highways, link roads, buildings, advance police, fire and rescue, military products produce NOTHING.

These are the statements which show you someone's true colors, skills and education. If he had some experience as a real economist, he would know that Pakistan's economy is under "pressure" but not stopped or being destroyed to bankruptcy like it was in 2012, when the current government took over.

Currently, Pakistan's economy is advancing but in a slower mode. Its called "transition" period, when an economy is still slow, but there is job growth and upwards movement below 5%. But, there are significant projects in pipes that once they start to finish up, you'll gain significant advantage and much faster economic activity as the resulting products of these large projects, will be available, whether its the electricity, dams, water reservoirs, car manufacturing, hospitals, school, universities, etc. As every single project completes, more revenue, more jobs, taxes and ongoing expansion will start to come into the system, resulting in ongoing revenue and tax generation, helping growth in GDP.
By the end of 2017, the electric issue will have resolved by 80-90%, there should be plenty of different water reservoirs and dams to provide for additional land irrigation, producing more agriculture output, there should be hundreds of thousands of more jobs around the highway system, particularly, the economic corridor to support travel to and back from China, rest stops, shops, hotels, new hospitals, communities, new business, etc, etc. The birth of economic growth in Pakistan has happened in the past two years. Now projects need to complete so they can provide results. And EVERY project goes through its own challenges and cost runs. There is nothing perfect, even in the US, I've been involved with many large programs, and almost all of them go through some challenges, like additional cost, scope or time related issues. So be patient and support your system, the system will take care of its people like how it is in the US, UK and elsewhere. The system provides opportunity for everyone.

 

[Matrixx]