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Pakistan’s exports surges strong recovery notwithstanding a continued rise...

December 4, 2020 (MLN): Despite rise in Covid-19 cases across the globe, Pakistan’s exports have shown a strong recovery.

Taking to its official Twitter handle, State Bank of Pakistan (SBP) on Friday said, “Pakistan's exports have surged a strong recovery notwithstanding a continued rise in global Covid-19 cases.”

The latest provisional exports figures for the month of November 2020, shared by Advisor to Prime Minister for Commerce and Investment earier this week, also indicate a rising trend of country’s exports as it clocked in at USD2.156 billion, which has been the highest monthly figure in November during last 10 years.

As per provisional figures for the month, significant growth has been witnessed in exports of Home Textile (20%) Pharmaceutical products (20%), Rice (14%), Surgical goods (11%), Stockings and Socks (41%, Jerseys & Pullovers (21%), Women’s Garments (4.3%) as compared to November 2019.

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Export of animal casings to Japan resumes after 4-...

December 04, 2020 (MLN): The export of animal casings from Pakistan to Japan has resumed after a ban of four years.

Taking to his Twitter handle, Advisor to PM for Commerce and Industries, Abdul Razak Dawood has commended the efforts made by Trade Section at Tokyo.

I advise our trade missions to actively engage the importers for promotion of Pakistan’s exports. I urge the exporters to take benefit of this opportunity and move full speed ahead’, he concluded.

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OMO Result: SBP Injects Rs.715.60 Billion for 7 Days

December 04, 2020 (MLN): The State Bank of Pakistan (SBP) conducted an Open Market Operation on Friday in which it injected Rs.715.60 Billion into the market for 7 Days.

Summary of OMO Result

TenorTypeOfferedAcceptedHigh - LowAcceptedOfferedAccepted
7DReverse Repo (Injection)715.600715.6007.08 - 7.037.032020
OMO Settlement: same day December 04, 2020
*Amount in Billions


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Pakistan is all set to benefit from COVID-19 vaccines

Dec 04, 2020: Pakistan has completed all prerequisites to submit the vaccine request to GAVI, through the COVAX facility, a coalition for equitable access to COVID-19 vaccines by all countries.

According to official sources, Pakistan and other GAVI eligible countries are likely to receive free of cost vaccines for a proportion of the population as well as additional quantities on special subsidized rates.

Releasing the application template on 17th November, GAVI had fixed 7th December as the deadline to receive application.

The Expanded Programme on Immunization under the guidance of the Ministry of National Health Services Regulations and Coordination established a technical working group that worked round the clock to complete the consultation process having all stakeholders on board.

The proposal drafted therein was endorsed by the National Technical Advisory Group (NITAG) on Immunizations on 1st December and approved by the National Interagency Coordination Committee (NICC) Friday in a meeting chaired by Dr. Faisal Sultan, Special Assistant to Prime Minister on National Health Services.

Participants of the meeting convened through video link included Director General Health, representative of the Ministry of Finance, National and Provincial EPI Managers, Representatives of WHO and UNICEF, GAVI as well as the other development partners and international donors.

Speaking on the occasion Dr Faisal Sultan highlighted the efforts of the government to curtail the impact of COVID-19 using all potential measures and available options.

“Ensuring availability of safe and effective vaccine to the most vulnerable population groups, the soonest possible, is yet another tool that the Government is looking to benefit from”, stated Dr Faisal Sultan.

“Protecting the healthcare workforce at the forefront of the response against the COVID-19, shall ensure our strength to tackle the challenge head on while protecting elderly with co-morbidities will help in reducing the associated morbidity and mortality”, he added.

Dr Safi Malik, Director General Health congratulated EPI team on developing a concise proposal taking into account the operational realities.

The representative of partner organizations also appreciated the government’s commitment and proactive approach to benefit from every opportunity as it arises to mitigate the impact of devastating pandemic of recent times.

“COVAX facility would best benefit countries at advance level of preparedness. Endorsement from all stakeholders of a proposal developed through national consensus enhances Pakistan’s chances to be among first countries benefiting from the initiative” said Dr Rana Muhammad Safdar, National Coordinator for EPI and Polio Eradication.

The dedicated NICC meeting of high significance was convened by the Ministry of National Health Services today to deliberate on Pakistan’s application for submission to GAVI.

Depending upon the availability of resources, COVAX initiative aims to ensure equitable supply of COVID-19 vaccine to all countries, irrespective of economic status.


Government procures 41 spot LNG cargoes on average of...

December 3, 2020 (MLN): The Petroleum Division on Thursday, termed media reports being circulated, alleging mismanagement of spot buying of LNG resulting in "alleged" burden of billions of rupees on national exchequer, as incorrect and based on false assumptions & incomplete facts.

In a Press release issued yesterday, the Petroleum Division responded to the questions being asked for clarity of facts and general understanding of LNG Procurement.

First question pertains to LNG procurement to run both terminals in full capacity & import of six cargoes in December. Responding to this, Petroleum Division said it must be understood that the two terminals together have operated on 65% or less capacity in 9 months out of last 27 months. Another factor which must not be ignored is that the previous government signed long term contracts for 800mmcfd for supply of LNG. Unless this is sold first, buying more is not possible, even if it is available cheap. It also signed 1200mmcfd of terminal capacity on a Take or Pay basis which results in $527,000 per day payment, regardless of the level of use of these terminals. Whereas current government purchased 41 spot LNG cargoes on much less average for the whole year than term slope of 13.37% Brent, which enabled us to save USD 237millions in last 27 months. Also, once you award a cargo, which has a fixed delivery date, it is near impossible to move it, especially in winter peak. Hence, if you do partial ordering of spot cargoes, you may not be able to slot more cargoes later, because that results in change of delivery date of all cargoes.

Secondly, it is being asked why GoP invited tenders for December in November. This is factually incorrect. Pakistan LNG Ltd. placed tender notice for 6 LNG Spot cargoes for use of December on October 2, 2020, Division said.

Third question related to forward purchasing in summer for winter delivery when global market prices were down due to less demand in summer. On this,  the Division said that it must be understood that spot cargoes are generally for ready delivery (ie within 30-60 days). While you can do forward buying (ie order today for delivery many months later), the pricing for such purchases is done on a forward curve for Brent and Swap Spreads for slope. So, if spot cargoes were available in July for 10% of Brent, resulting in say $4/mmbtu delivered price, an order placed in July for delivery in December does not get priced at $4/mmbtu. The sellers will use forward projections of Brent in December and Swaps Spreads for slope in December, resulting in a much higher price for delivery in December. An expectation that we can get ready price of summer for delayed delivery in winter, assumes that the sellers are so naïve, and we as buyers are so smart, that we can take advantage of them. This simply shows lack of understanding of how forward market works. As an example, the JKM swaps on Oct 2, 2020 for December delivery were usd 5.5/mmbtu. The same JKM swaps for December delivery in mid-August were $5.4/mmbtu, a bare 10 cent difference. So even if the December tender were issued in mid-August, the price would have been effectively the same.

Fourth question was based on comparison between India and Pakistan on spot purchasing of LNG claiming that India saved billions of rupees by placing orders for November three weeks before Pakistan. Again, this is factually incorrect, Petroleum Division said. Pakistan placed tender for November delivery on Sep 9 and Sep 15 with the PPRA compliant mandatory 30 days. India placed a one-day tender on Sep 29 and awarded on Sep 30. The price of this one cargo was $ 0.98/mmbtu less, as reported by Bloomberg than the November average of Pakistan. Many major suppliers like Vitol and Trafigura have bought December cargoes at prices higher than Pakistan as reported by Bloomberg. Are they all incompetent? Single cargoes cannot be compared because they depend on the day of award and conditions of tender. For example, PLL requires 21 days credit period & 10% of performance guarantee on LNG supplies. Also, our port cargoes are 400 percent higher. India does not have these conditions. An example of the reverse situation was PLL spot cargo of July 27, 2020 at price of USD 2.2 but Reliance, India awarded a cargo only 3 days later July 30, at 2.7 usd, a full 20 percent higher, Division added.

Finally, it is being claimed by some media persons that the spot buying this year has caused 122billion loss to the exchequer. Division responded to this claim by stating that the total of all cargos bought in 2020 on spot was usd 353 million, or Rs 57 billion, with an average just below 12 percent. So, it is illogical to say that when money spent is Rs 57 billion, somehow a loss of 122 billion has been created. This is nothing more than cheap sensationalization. Compared to contract deliveries, the spot purchases, including higher December numbers, is still cheaper. The public discourse needs to move to planning and implementation on legal reforms to declare LNG as gas, from the deliberate distortion created in the last govt by declaring it petrol, Division said.

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