Commodity News Snapshot-Pakistan

  THE RUPEE: new low hit versus dollar

KARACHI (October 04, 2010): The rupee touched a new low level versus dollar at 86.26 during the week ended on October 1, 2010. On the interbank market, the rupee lost 24 paisa against dollar for buying at 86.21, and 25 paisa for selling at 86.26.

 DNA of agriculture sector shows Rs 300 billion loss: Gondal

ARTICLE (October 04, 2010): Minister for Food and Agriculture Nazar Muham-mad Gondal in an exclusive interview to Business Recorder's panel comprising Wasim Iqbal, Sohail Sarfraz, Mushtaq Ghumman and Abdul Rasheed Azad speaks a variety of issues. According to him, a preliminary Damage Needs Assessment (DNA) of agriculture sector reveals a loss of Rs 300 billion (3.4 billion dollars). He says he does not support importing raw sugar. 

Prices fell slightly on cotton market last week

KARACHI (October 04, 2010): Prices fell slightly on the cotton market last week despite the fact that supply was tight due to higher trend in the international market.

Problems at Kenyan ports: rice exporters leaving for Kenya on October 4

KARACHI (October 03, 2010): A seven member delegation of Rice Exporters Association of Pakistan (REAP) is leaving for Kenya on Monday to resolve the burning issues at Kenyan Ports being faced by Pakistani rice exporters during last couple of months. The delegation led by Rafique Suleman, former vice chairman REAP would hold meetings with Kenyan authorities to resolve this issue.

International News

Gold prices extend record-breaking run; crude oil leaps higher

LONDON (October 03, 2010): Gold rocketed to record peaks this week, boosted by the weak dollar, while crude oil raced higher as supportive economic data sparked hopes of improving world-wide energy demand. Many dollar-priced raw materials won support from the struggling greenback, which makes them cheaper for buyers using stronger currencies and so tends to stimulate demand.

 

India's soyabean output likely to rise

NEW DELHI (October 03, 2010): India's soyabean output in 2010 is expected to rise 4.1 percent to 10.1 million tonnes on normal monsoon rains, a leading trade body said on Thursday. Good rains over growing areas have raised yields even though the area planted with the main summer oilseed crop fell as the soil remained too hard due to the late arrival of the rains.

Commodity News Snapshot-Pakistan

Floods cause Rs 17 billion losses to Khyber Pakhtunkhwa livestock, agriculture sectors

PESHAWAR (September 01, 2010): Heavy torrential rains and devastating floods caused a loss of Rs 5.344 billion to livestock and Rs 12.139 billion to agricultural sectors of Khyber Pakhtunkhwa province, respectively. Briefing media here at Chief Minister's House on Tuesday, provincial minister for Information, Mian Iftikhar Hussain said that statistics gathered from various districts showed a total of 94,924 cows and bulls were affected and 29,081 died in the floods which worth Rs 1.769.billion.

Who to blame for sugar price hike?

ISLAMABAD (September 01, 2010): Sugar prices are hovering at around Rs 90 per kg and it is difficult to determine which of the key players is to blame: the government, including TCP, the sugar mill owners, the stockists, the wholesalers, or the retailers. Background interviews with officials and private sector stakeholders, however, do establish the fact that sugar price is at an artificially high level and someone is making windfall profits during Ramazan.

TCP opens two LCs for 0.32 million tons of sugar import

KARACHI (September 01, 2010): The Trading Corporation of Pakistan (TCP) has established two Letters of Credit (LCs) worth $243 million for import of 320,000 tons of white refined sugar. Sources told Business Recorder on Tuesday that with the opening of two LCs it is expected that first shipment of sugar would reach Pakistan in mid-September.

Sindh government lifts ban on inter-district wheat movement

KARACHI (September 01, 2010): The Sindh government has withdrawn Section 144 on the movement of wheat in the province to deal with the expected shortage of the commodity in the flood hit districts, Business Recorder has learnt. It may be mentioned here that the Sindh government, couple of month's back, had imposed Section 144 on the wheat movement at the joint borders of Sindh-Punjab-Balochistan and within the province to avoid smuggling of the commodity

Rice farmers, cotton millers: Zardari for special credit package

KARACHI (September 01, 2010): President Asif Ali Zardari has held a meeting with the representatives of rice growers and cotton ginning millers at Chief Minister's House here on Tuesday to discuss the extent of damages to rice and cotton crops due to recent floods and examine the ways and means to retrieve the losses and help recover the lost ground.

PSMA (Punjab) calls for import of raw sugar

LAHORE (August 31, 2010): Pakistan Sugar Mills Association (PSMA - Punjab) Chairman Javed Kayani has laid emphasis on the import of raw sugar to meet the demand in coming season. Kayani in a letter written to the Secretary Food Punjab said shortage of food is likely to aggravate as about twelve districts in Punjab have been inundated by the flash floods, damaging crops badly.

71% rice crop destroyed in Khyber-Pakhtunkhwa

For a province battered by one of the most devastating natural calamities in recent memory, the ordeal is not over yet.


The Food and Agriculture Organisation of the United Nations has released a damage assessment report of the agriculture sector in Khyber-Pakhtunkhwa.


The report reveals that up to 71 per cent of the rice crop has been lost to the floods. Out of the total of 76,564 acres of land used for rice cultivation, 54,665 acres were simply washed away. Furthermore, the flood wreaked havoc on maize plantations as well, with 45 per cent of the total crop lost in the province and 226,902 acres of farmland damaged.


In all 3.2 million hectares of agricultural land has been damaged or destroyed. In a province where 80 per cent of the population depends on agriculture as their only means of livelihood, economic hardships are getting worse by the day. Fifty-nine per cent of the vegetable produce has been lost and 19,144 acres of farmland used for vegetable cultivation affected.


Also 26 per cent of the sugarcane crop and 57,098 acres of plantation land, 14 per cent of fruit orchards and 11,419 acres of orchard land, and 4 per cent of the tobacco crop and 967 acres of land were also destroyed.
Right now, the most critical matter at hand is how to plant wheat and vegetables in the coming Rabi season. If the crops are not planted by September/October, the country will face massive shortages of wheat and seasonal vegetables next year, and plantation will not be possible for another twelve months.


However the situation is further complicated, as the cultivation cannot begin until seed is made available and flood debris cleared from the fields. Seed from last years crop was washed away by the flood, as were farm implements. Wheat accounts for almost 60 per cent of the national cereal production, and if the coming season is missed, there will be widespread economic repercussions at the micro and macro levels.The Express Tribune

Commodity News Snapshot-Pakistan

Sugar price may rise further

ISLAMABAD (August 26, 2010): Sugar price is expected to skyrocket to about Rs 90 per kg in the coming weeks as stocks with sugar mills are inadequate, said a market player on Wednesday. Currently, sugar price in Pakistan is higher than in India, Sri Lanka and Bangladesh but lower than Afghanistan. A ministerial committee, headed by the Minister for Industries and Production, Hazar Khan Bijarani, which met last week, did not reach any agreement on a plan to deal with the rising sugar prices.

Sindh's major crops badly hit by floods

KARACHI (August 26, 2010): Three major crops-sugarcane, cotton and rice-have been badly hit by the recent floods as the standing crops on some 1.4 million acres have been badly damaged in Sindh, it is learnt. The field staff of Agriculture Department has submitted a district-wise crop damage report after conducting survey of all 23 districts of the province to find out the agricultural loss to the standing Kharif crops in the province by flash floods, sources told Business Recorder on Wednesday.

Prices at cotton market firm amid strong demand

KARACHI: The Karachi cotton market witnessed a firm trading session while quality lint remained an issue on the trading floor amid strong physical prices, traders at the Karachi Cotton Association (KCA) said Wednesday.

Lint prices remain range-bound, spot rate stays put on cotton market

KARACHI (August 26, 2010): Steady trend was seen on the cotton market on Wednesday as buyers showed no reluctance in new deals on short crop news after historical floods in the country, dealers said. The Karachi Cotton Association (KCA) official spot rate was inert at Rs 6,450, they said. In the ready business nearly 9000 bales of cotton changed hands between Rs 6400-7000, they said.

Dollar slumps versus rupee

KARACHI: The dollar lost strength against the rupee in the interbank market, dealers said on Wednesday. The dollar commenced the day’s trading at Rs 85.66 for buying, lost three paisas and closed at 85.63 for buying and Rs 85.68 for selling. The euro regained its strength versus the rupee, as it started the day’s trading at Rs 108.19 for buying, gained 48 paisas and closed at Rs 108.67 for buying and Rs 108.87 for selling. The British currency appreciated against the rupee, as it started the day’s trading at Rs 131.97 for buying, rose 14 paisas and closed at Rs 132.11 for buying and Rs 132.31 for selling.

Bullion Rates

KARACHI (August 26, 2010): Gold and silver rates in rupees per 10 grams prevailing in major cities on Wednesday (August 25, 2010).

  

'Floods inflicted Rs 250 billion loss to agriculture sector'

MULTAN (August 26, 2010): Former Federal Minister Alhaj Sikandar Hayat Bosan has said that recent devastating floods across the country have caused damage worth Rs 250 billion to the agriculture sector with maximum losses suffered by the small farmers of around Rs 100 billion, while some facing total annihilation of their crops.

Damage to wheat stock: clarification

KARACHI (August 26, 2010): The Food Department is not in agreement with the contents of a news item carried by Business Recorder on Wednesday regarding damage of over 0.3 million tonnes of wheat stock by the recent flood and torrential rains. It is categorically stated that after taking into consideration of the monsoon rains and the damage probably caused by it in consequent thereupon.

Global Commodities Recap – 25th August, 2010

Precious metals rose for a second day as the dollar fell against the euro and raised concern over economic growth that hit equities, stimulating interest in the metal as a safe haven.

Gold is benefitted from renewed investor demand for safe-haven assets as evidence of a slowing economy mounts, which in turn has dragged global equities to their lowest since early July, when a recovery in risk appetite led prices to retreat from June's record highs.

Floods cause Rs 244.6bn loss to agri sector: MinFA

* Small farmers suffer loss of Rs 98bn, while some face total annihilation of their crops
ISLAMABAD: The devastating floods across the country have caused damage worth Rs 244.6 billion to the agriculture sector with maximum losses suffered by the small farmers of around Rs 98 billion, while some facing total annihilation of their crops.

This was revealed in the initial estimate prepared by the Ministry of Food and Agriculture (MinFA) on Monday in coordination with the provincial governments and Azad Jammu and Kashmir (AJ&K) government. However, the estimate prepared by the MinFA has also said that the agriculture loss could be higher in Southern Punjab and some parts of Sindh as clear pictures from many areas have yet not been received. The ministry has said that maximum damage by the floods has been made to the minor crops of Kharif season, which includes jawar, maize, moong and mash pulses and some citrus fruit varieties. “The most upsetting thing is that the minor crops are mainly cultivated by small farmers and in areas where growers have small land holdings,” said a senior official of the MinFA. “This loss is the most serious setback for the farming community because most of the small farmers have lost considerable number of livestock too as they had limited facility for their animals.” Among the major cash crops the ministry’s report highlighted that the largest loss of Rs 71.4 billion has been faced by the cotton crop.

Cotton was sown over 3.1 hectares in the current Kharif season out of which the floods have destroyed crops at 0.51 million hectares, as a result the production is expected to decline by almost 15 percent to 11.7 million bales as against the targeted cotton production of 14 million bales in 2010.

The Minister for Food and Agriculture Nazar Muhammad Gondal has said that Pakistan will face serious cotton shortage in coming days as more than 15 percent of the crop has already been hit by the floods.

“Two million bales have been destroyed in the floods in Punjab alone and we have yet to receive the complete details,” the minister added. The cotton crop has been seriously damaged in Bakkhar, Layyah and Mianwali districts apart from many other areas in southern districts of Punjab, while the left bank of River Indus in Sindh is the cotton belt and the cotton crops have suffered in Sukkur, Khairpur, Ghotki, Naushero Feroze and Benazirabad districts. The paddy crops in the country have faced a loss of Rs 56.3 billion and the worst hit areas are right bank districts of Sindh.

The countrywide paddy production is expected to decline by around 27 percent to 4.35 million tonnes as against the original estimated production of 5.95 million tonnes. Among the major crops, sugarcane farmers have suffered a loss of Rs 19.3 billion and its production is expected to decline to 47.23 million tonnes as against the estimated production of 54.83 million tonnes.

Pakistan Sugar Mills Association (PSMA) Chairman Iskander khan said that the initial reports suggest that the sugar cane crops in Charsadda, DI Khan and some parts of Southern Punjab have suffered damages. He said that 4 million tonnes of sugar production was expected in the coming season but now 3.8 million tonnes is likely to be obtained. The MinFA has estimated that the other serious issue faced by the country in the near future would be shortage of vegetables.[DailyTimes]

The economic losses of annihilating floods

 The economic losses caused by the deadly flood-the worst in Pakistan's history in almost all four provinces is yet to nail down. Significant losses are there for both people and the trembling Government.


Dr Salman Shah, Former federal Finance Minister, estimates that costs of rehabilitation of the flood-affected population and reconstruction of damaged infrastructure in different parts of the country could be in the range of $ 4 - 5 billion. Another economist put the figure between $ 3.5 and 4 billion. These losses are enormous when seen in the context of cumulative damages of about $ 6.5 billion in 14 floods since 1956.
According to Shahid Javid Burki, another former Finance Minister and ex senior Vice President of the World Bank, “we should get ready for another poor year for the economy, in the terms of the rate of the growth in the national product, pace of job creation and inter-personal and inter-regional income distribution. The government’s prediction that GDP in 2010-11 would increase by 4.1% now seems extremely optimistic. Given some of the shocks the economy has received in last few days, it appears that the national product will not increase by more than 2.5 to 2.8% this year. This will be about the same as the revised rate of growth in 2009-10. If that came about, Pakistan’s current economic expansion will be less than one half that of Bangladesh and one third that of India. Pakistan today is South Asia’s “sickest” economy and will remain that way unless the policy makers move decisively”. 

Agriculture knockout 
According to the spokesman of the World Food Programme, Amjad Jamal, “At least 1.4 million acres of crops were destroyed in Punjab. Many more crops were destroyed in North West and Sindh. The flooding has caused massive damage to crops and also to the reserves that people had in their houses. Khyber Pakhtoonkhwa was a ‘food insecure’ province even before the floods, and now in a lot of areas, people can’t afford even one meal a day”.

Damages, on the one hand, are likely to affect raw material supplies to the downstream industry that contributes to the export sector and, on the other hand, reduce the demand for industrial products like fertilizers, tractors, pesticides and other agriculture implements. And all this comes at a time when agricultural productivity has been falling over the years.

 If we include the figures of Sindh and Khyber province, the total goes up to more than 2 million acres. This is massive damage. Sugar cane, rice and cotton crops have been badly damaged. Agriculture experts are saying that farm production in Pakistan, Asia’s third-largest grower of wheat and the fourth biggest producer of cotton, may decline by 20 to 30% because of this damage. The losses to agriculture and livestock would have a spill over effect on industry and commercial activities to a great extent. This is because agriculture continues to play a central role in the national economy. Accounting for over 21% of GDP, agriculture remains by far the largest employer, engaging 45% of the country’s labour force.

As the flooding has been widespread, the damages to cotton crops may not be verifiable at this stage. Cotton, being a non-food cash crop, contributes significantly to foreign exchange earnings. It accounts for 8.6% of the value of agriculture and about 1.8% of GDP.

Sugar cane is a major crop, which is an essential item for industries like sugar mills, chipboard and paper. Its share in the value of agriculture and GDP is 3.6% and 0.8% respectively. Another cash crop, rice, is one of the main export items. It accounts for 6.4% of agriculture and 1.4% of GDP. High quality rice serves domestic demand and earns $2billion in exports every year.

Mostly small cities and towns surrounded by the villages have been affected. The big chunk of the economies of these cities and towns depend on the rural population. The rural population depends on agriculture for its economic survival. There are hardly any big industries in the affected areas. There are small industries which are also agricultural based and depend on agriculture for raw material. The economy of South Punjab largely depends on Cotton and wheat crops and mango orchards. The rural economy of Khyber Pakhtoonkhwa depends mostly on wheat and maize crops and also produces a large quantity of high quality fruits and vegetables. The vegetables have completely been wiped out and big damage done to the fruit orchards. The standing waters in the orchards are causing further damage to them.

The canal irrigation system has also been affected and water for irrigation might not be available to the farmers in many areas for the next crop.  

Small farmers suffer the most
The affected areas of South Punjab and Sindh are dominated by the feudal lords, who own more than 80% of the irrigated land. Small farmers and peasants make up the majority in the population. Some work as daily wage labourers in the nearby cities and towns. A majority of the workers either work as public sector workers or are employed in the agriculture-related small industries.

The small farmers and peasants will suffer the most from this disaster as feudal lords and big farmers will transfer the burden of disaster onto the shoulders of peasants and poor farmers. Feudal lords and big farmers have shifted their families to safe places in the cities but peasants and small farmers are suffering and facing the miseries of life because they have no means to move out of the affected areas. They have no place to go and are forced to live under the open skies. Poor people have been left with nothing and at the mercy of the state machinery for rescue and relief. They have lost their livelihoods and shelter. Now, the real problem will start for them when authorities start to the pay compensation and reconstruction money. They will be asked to provide ownership documents to get compensation for their destroyed homes and livelihoods which they can not provide because these lands belong to the feudal lords. These peasants have been working and living on those lands for generations but they do not own the lands. The destruction of crops means that they will be left without any food reserves or money for months to come. The government will offer cheap loans and other facilities to the feudal lords and big farmers, but nothing will be offered to poor peasants and small farmers. They will be left at the mercy of private money lenders and feudal lords to be fully exploited. These private money lenders and feudal lords will offer loans to these peasants and small farmers at very high interest rates. These peasants will be forced to work like slaves for feudal lords just for few thousand rupees. This disaster will further impoverish the hundreds of thousands of already extremely poor peasants and farmers.[DAWN]