Tag: pakistan news
May 18, 2022: Due to climate changes, shortage of electricity and diesel, increase in cost of packaging processing and high freight charges, exporters as well mango growers have to face a crisis during the current mango season. Pakistan is facing a 50% drop in mango production this year due to the effects of climate changes and high temperatures.
All Pakistan Fruit and Vegetable Exporters Association (PFVA) has curtailed its export target by 25,000 tons as compared to last year in view of declining mango production during this season and has set an export target of 125,000 tonnes for the current mango season. Meeting this new target, Pakistan will fetch valuable foreign exchange of $106 million.
According to Waheed Ahmed, Patron-in-Chief of PFVA, due to climatic effects and high temperature, mango production has been severely affected during this mango season. The average production of mango in Pakistan is 1.8 million tons and with 50% reduction, it is likely to be limited to 0.9 million tons.
During the current mango season, the mid of March witnessed average temperature between 37-42 ? while the average temperature during the previous season was recorded as 34 ?. The sudden rise in temperature has severely damaged mango production while irrigation problems, water shortage due to blockage of canals, power load shedding and shortage of diesel during the season have further deepened the climatic effects – Waheed Ahmed disclosed.
Expressing serious concern, Waheed Ahmed further shared that, the mango production and export during the current season are facing stiff challenges in the history of mango seasons. Depreciation of rupees, rising labour costs along with high tariff of electricity and gas have significantly multiplied the cost of processing mangoes. Packaging material has also gone up by 30% since last season, making it quite difficult for mango exporters to compete in the international market.
Exorbitant increase in sea freight has played a significant role in making competition stiff for Pakistani mangoes. Last year, sea freight for the Gulf and Dubai were USD 1,900 per container, but this year the cost of sea freight has risen USD 2,800 to 3000 dollars it is feared that with simultaneous increase in air freight charges, the transportation cost of mangoes would also be substantially enhanced.
In case of rain, storms and strong winds along with climatic effects, losses of mango crop may further increase in the coming months, leading to severe negative impact on exports. Waheed Ahmed urged the Government to extend financial assistance to the mango growers and exporters so that their losses could be compensated.
Waheed Ahmed voiced that the Govt. shall extend 20% subsidy in sea and air freight, reduction in PIA freight charges to curtail the cost of export and facilitate competition in the international market for Pakistani mangoes.
According to Waheed Ahmed, in order to attain the export target of this most difficult season of mango, it is imperative that the concerned government departments and authorities including airport and seaport authorities, customs, plant production department and other concerned organizations shall render all possible assistance and cooperation to ensure that maximum foreign exchange can be earned during the current critical economic situation of Pakistan.
May 18, 2022: Global equity markets rallied and Treasury yields rose on Tuesday, as solid U.S. retail sales in April suggested economic growth might strengthen, as did an easing of China's lockdowns to contain the COVID-19 pandemic.
U.S. retail sales rose 0.9% last month while data for March was revised higher to show sales advancing 1.4% instead of 0.7% as previously reported, the Commerce Department said.
The data show U.S. consumers weathering inflationary headwinds as sales gained for the fourth consecutive month, said Jeffrey Roach, chief economist for LPL Financial. Sales are nominal, so much of the increase is from higher prices, he said.
"We expect a rebound in economic growth in Q2," Roach said in an email if prices moderate enough to relieve some of the pressure on consumers.
U.S. and European stocks rallied following gains overnight in Asia. MSCI's gauge of stocks across the globe closed up 2.0%. The pan-European STOXX 600 index rose 1.22%.
On Wall Street, the Dow Jones Industrial Average rose 1.28%, the S&P 500 gained 1.89% and the Nasdaq Composite advanced 2.57%. Growth stocks rose 2.48% while value shares gained 1.60%. [.N/C]
The gains were a rebound from overselling last week, said Anthony Saglimbeni, global market strategist at Ameriprise Financial, citing the sixth straight weekly loss for the Nasdaq and S&P 500.
"There's this battle in the stock market between what breaks first: inflation or the consumer. The stock market is betting that the consumer is going to break and credit markets are betting that inflation is going to break first," he said.
"The stock market is getting close to overcorrecting and pricing in the probability of a recession that I think is just too high," Saglimbene said.
Data also showed industrial production rose 1.1% in April, with the manufacturing capacity utilization rate at its highest since 2007. The sector is running too hot and needs to slow for inflation to get under control, said Bill Adams, chief economist for Comerica Bank.
The Federal Reserve will raise the federal funds rate half a percentage point at each of its next two policy meetings to throw some sand in the economy's gears, Adams said in an email.
The U.S. central bank will "keep pushing" to tighten U.S. monetary policy until it is clear inflation is declining, Fed chair Jerome Powell said at a Wall Street Journal event.
"What we need to see is inflation coming down in a clear and convincing way," he said. "If we don't see that, we will have to consider moving more aggressively" to tighten financial conditions.
The Fed is behind the curve and trying to play catch up, said Brian Ward, chief executive of Broadmark Realty Capital Inc.
"We are trying to address a very complex set of facts with a very blunt instrument via monetary policy and I think that it's not going to turn out well," Ward said.
The yield on 10-year Treasury notes rose 10.7 basis points to 2.986%.
The dollar eased for a third straight day, pulling back from a two-decade high against a basket of major peers, as an uptick in risk appetite cut the greenback's safe-haven appeal.
The dollar index fell 0.787%, with the euro up 1.07% to $1.0543. Japan's yen weakened 0.14% to 129.36 per dollar.
Fears remain about the strength of the world's two largest economies after weak retail and factory figures in China and some disappointing U.S. manufacturing data.
An index compiled by U.S. bank Citi that monitors whether economic data comes in better or worse than economists had been expecting is back in negative territory.
May 18, 2022: Asia's stockmarkets struggled to carry recent gains into a fourth straight session on Wednesday and the U.S. dollar steadied, as nagging doubts about inflation and the drag from rate rises crept back in to the global growth outlook.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gave up earlier gains to trade around flat by mid-morning. Japan's Nikkei .N225 rose 0.3% although miners did help Australian shares .AXJO up about 0.7%.
Overnight Wall Street indexes had jumped and the dollar recoiled from near two-decade highs as investors pushed worry about inflation and recession to the back of their minds.
But analysts doubted it could last and by the time Asian traders had woken up U.S. stocks had run out of steam. S&P 500 futures ESc1 were down 0.2% early in the Asia session and Nasdaq futures NQc1 were down 0.4%.
"After plunging into last week, shares could have a further near-term bounce," said Shane Oliver, chief economist and head of investment strategy at Australia's AMP Capital.
"But risks around inflation, monetary tightening, the war in Ukraine and Chinese growth remain high and still point to more downside in share markets," he said.
The dollar also steadied after an overnight kicking, helped by Australian wages data missing forecasts, which pulled down the Aussie dollar AUD=D3.
The greenback steadied on the euro EUR=EBS at $1.0536 and paused a strong bounce for sterling GBP=D3 at $1.2480. The dollar index =USD hovered at 103.370.
"It's still far too early to call a long term peak in the dollar and retracements should be shallow," said analysts at Westpac. "But some two-way consolidation between 102-104 is likely near-term," they added, referring to the dollar index.
Positive data had helped the short-term mood, with U.S. retail sales meeting forecasts for a solid increase in April and industrial production beating expectations.
Data on Wednesday showed Japan's quarterly was smaller than traders had feared.
Shanghai is also edging toward an end to its lockdown and China's vice-premier made soothing comments to tech executives in the latest sign of a let-up in pressure.
However, any good news was offset by the reminder from Federal Reserve Chair Jerome Powell that controlling inflation would demand rate rises and possibly some pain.
Investors have priced in 50 basis point U.S. rate hikes in June and July and see the benchmark Fed funds rate nudging 3% by early next year.
Treasuries of all tenors were sold overnight in anticipation of rising rates, but the gap in yield between short-dated and long-dated bonds is narrowing as markets price in the risk that the rate hikes this year will drag on longer-run growth.
Benchmark 10-year Treasuries were steady in Asia and the yield US10YT=RR sat just below 3% at 2.9805.
European yields are also rising as the likelihood of the European Central Bank hiking rates by 25 basis points around July is firming. Dutch central bank chief Klaas Knot said overnight a bigger rise shouldn't be ruled out.
Commodities have rallied with stocks this week as markets have found reasons to hold outgrowth hopes, but oil dipped overnight and there were signs of waning momentum on Wednesday.
Brent crude LCOc1 futures were up 0.3% at $112.29 a barrel and U.S. crude futures CLc1 rose 0.8% to $113.35 a barrel.
S&P Global Ratings cut growth forecasts for China, the United States and the eurozone.
"The global economy continues to face an unusually large number of negative shocks," said chief economist Paul F. Gruenwald.
"Two developments have altered the macro picture," he said, being Russia's invasion of Ukraine which sent commodity prices spiking and inflation, which has turned out to be higher, broader and more persistent than first thought.
May 18, 2022: Oil prices rose more than $1 a barrel in early Asian trade on Wednesday on hopes of demand recovery in China as the country gradually eases some of its strict COVID-19 containment measures.
Brent crude futures were up $1.15, or 1.0%, at $113.08 a barrel at 0042 GMT, while U.S. West Texas Intermediate (WTI) crude futures climbed $1.62, or 1.4%, to $114.02 a barrel, paring some losses after oil prices fell by around 2% in the previous session.
Shanghai achieved its long-awaited milestone of three consecutive days with no new COVID-19 cases outside quarantine zones on Tuesday and set out plans on Monday for ending a lockdown that has lasted more than six weeks.
"Beyond the near term, less awful news on China offers a nip in the tail in the form of much higher oil demand and prices, which is positive for producers, but harmful for consumer sentiment," SPI Asset Management managing director Stephen Innes said in a client note.
U.S. crude and gasoline stocks fell last week, market sources said citing American Petroleum Institute figures on Tuesday. U.S. government data is due on Wednesday. [API/S][EIA/S]
Russia's production fell by nearly 9% in April, and the country, part of the OPEC+ group of oil-producing nations, produced oil far below levels required under a deal to ease record output cuts made during the worst of the coronavirus pandemic in 2020.
However, there is still pressure on prices following reports that the United States is allowing Chevron Corp to negotiate oil licences with Venezuela's national producer, temporarily lifting a U.S. ban on such discussions, analysts from ANZ Research said in a client note on Wednesday.
"The proposed changes could ultimately lead to more crude oil hitting the market."
Further weighing on the market was the European Union's failure on Monday to persuade Hungary to lift its veto on a proposed embargo of Russian oil. But some diplomats now point to a May 30-31 summit as the moment for agreement on a phased ban.
In the United States, Federal Reserve Chairman Jerome Powell on Tuesday pledged that the central bank would ratchet up interest rates as high as needed to stifle a surge in inflation that he said threatened the foundation of the economy.