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Author: Mrs. Anjum Shahnawaz

  • CCP discovers monopoly behind massive increase in poultry prices

    CCP discovers monopoly behind massive increase in poultry prices

    ISLAMABAD: The Competition Commission of Pakistan (CCP) has discovered that monopoly of feed mills resulted massive increase in poultry rates at retail state.

    A statement on Friday said that the nineteen poultry feed companies have been involved in price coordination and their alleged anti-competitive conduct has caused poultry feed price rise.

    Poultry feed comprises approximately 75-80  percent of the cost of broiler meat and eggs. Therefore, the hike in feed prices has affected the prices of chicken and eggs, which are the most commonly consumed high protein foods. The CCP’s enquiry revealed that from December 2018 to December 2020, the feed mills colluded to raise the poultry feed prices by Rs. 825 per 50kg bag, thus making the feed 32 percent costlier for the poultry farmers.

    Moreover, data from the Pakistan Bureau of Statistics (PBS) for September 2020 shows that chicken prices rose by 18.31 percent and eggs by 5.2 percent. The rise in these prices coincided with an increase in feed prices by almost Rs. 100 per bag.

    In October 2020, after another price increase by poultry feed mills (by Rs.125 on layer and 175 on broiler feed), the chicken prices rose by 26.62 percent and eggs by 23.81 percent as compared to the previous month. In November 2020, poultry feed prices rose again by Rs. 150 per bag, and in this month, the prices of chicken and eggs rose by 20.76 percent and 5.23 percent. In December 2020, another price increase in poultry feed by Rs.250 per bag caused prices of chicken and eggs to rise by 3.21 percent and 14.08 percent, respectively.

    The CCP took a suo motu notice of the concerns and complaints received, through the PM Citizens Portal and the CCP’s own online complaint management system, alleging that some of the leading mills in the country collusively raised poultry feed prices. The complainants also included poultry farmers whose business were hit by the costlier feed prices.

    In February 2021, the CCP raided two major poultry feed producers and impounded crucial evidence pointing towards price change coordination among the feed companies. The impounded record revealed that officials of 19 feed mills were using an active WhatsApp group where one feed producer would announce its intended price increase and the rest expressing and sharing their willingness to follow suit. Price discussions included the effective date and amount of the rise. These discussions and decisions were implemented on the ground, as evidenced by the official price lists of these companies.

    In a conversation thread from 07 December 2020, feed mills, while discussing price increases on the group, an official of a feed mill states: “Everyone would increase, for sure, but what’s about the exact effective date, please”. In response official of another feed mill says: “Dear all owners want immediately but seems from tomorrow”. Another feed mill representative replies: “surely w.e.f 07-12-2020”. Price lists show that on 7/8 December 2020, mills increased prices by Rs. 250 per 50 kg bag.

    The enquiry also found that mills carried out price changes between December 2018 and December 2020 in a coordinated manner in short intervals at least 11 times. In addition, the data revealed that not only were price revisions made on the exact dates, but the amounts of price change were also similar.

    To illustrate this pattern, on 10 October 2020, the feed mills participating in the WhatsApp group increased prices by Rs. 125 per 50 kg bag for layer and Rs. 175 per 50 kg bag for broiler feeds, on 14th/16 November 2020, by Rs. 150 per 50 kg bag on all feed rations and on 7th/8 December 2020, these mills increased prices by Rs. 250 per 50 kg bag on all rations.

    An analysis of poultry input costs shows that maize, which is the primary component of feed, constitutes 55-60 percent in terms of physical usage in feed, approximately 40 percent of the cost. Maize witnessed a bumper crop in 2020 and was abundantly available.

    Moreover, in FY-2019-20, maize prices fell by 7 percent compared to the previous year and in the first quarter of FY21, were 22  percent lower than 2019-20. On the other hand, soybean meal, another critical raw material, saw higher prices. However, a rise in input prices it has been witnessed cannot be used as a justification to increase feed prices uniformly as each mill has a different cost structure and business model.

    Poultry feed mills are each other’s competitors, and any discussion and coordination on prices is prohibited under Section 4 of the Competition Act, 2010. Accordingly, following the findings of the enquiry report, Show Cause Notices will be issued to poultry feed companies involved in the prima facie violation of Section 4 of the Act.

  • Business community welcomes Pakistan’s inclusion in Amazon list

    Business community welcomes Pakistan’s inclusion in Amazon list

    KARACHI: Business community has welcomed inclusion of Pakistan in the seller list by the online retail company Amazon.com, Inc. and said it will help the country to boost its exports.

    Faisal Moiz Khan, President North Karachi Association of Trade & Industry (NKATI), while welcoming the inclusion of Pakistan in the seller list by the world-renowned online retail company Amazon, termed the move of the present government as excellent, stated that the business community appreciates the efforts of Prime Minister Imran Khan and Abdul Razak Dawood,  Adviser for Commerce & Investment, as the move will result in billions in investment and vast employment opportunities, also boost the country’s exports.

    In a statement, NKATI president said that Amazon is a huge global distribution network, which is successfully providing services all over the world including Europe and USA. Earlier, Pakistan was not included in Amazon’s seller list due to which shipments from Pakistan were not directly on Amazon.

    “Due to the efforts of the government, direct shipments will now be possible on Amazon and Pakistan’s exporters will reap significant benefits and will be able to easily sell their products to consumers through Amazon, which will boost Pakistan’s trade and exports”, he hoped.

    Faisal Moiz Khan further said that Amazon’s business platform can significantly increase Pakistan’s business activities as not only textiles but all kinds of goods are sold on Amazon. He proposed, if the government really wants to boost and double the exports, the government should provide professional, technical services to people working at Amazon through TDAP and a significant fund from the EDF to be allocated so that it can be used to promote trade & exports.

    Moiz also suggested that efforts be made to include Pakistan in the selling list of other Amazon-style international companies so that Pakistan’s exports could be significantly boosted.

  • FBR deputes IR officers for budget preparation

    FBR deputes IR officers for budget preparation

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday assigned the services of following officers of Inland Revenue (IR) with Member (IR-Policy) with immediate effect and until further orders for ongoing Budget exercise and for preparation of Finance Bill, 2021-2022.

    Shabih-ul-Aijaz (IRS/BS-20) presently posted as Commissioner-IR (Audit-II), Large Taxpayers Office, Lahore.

    Taudeer Ahmad (IRS/BS-19) presently posted as Additional Commissioner-IS, Large Taxpayers Office, Islamabad.

    Munir Ahmed Chaudhry (IRS/BS-19) presently posted as Additional Commissioner-IR, Medium Taxpayers Office, Karachi.

    The officers are directed to report to Member (IR-Policy) on morning of 07.05.2021 for  preparation of presentation on budget proposals 2021-22 for the Honorable Minister for Finance and Revenue on 7th, 8th and 9th May, 2021.

  • Rupee appreciates by 32 paisas ahead of Eid holidays

    Rupee appreciates by 32 paisas ahead of Eid holidays

    KARACHI: The Pak Rupee gained 32 paisas against the dollar on Friday owing to inflows of home remittances and export receipts.

    The rupee ended Rs152.28 to the dollar from last day’s closing of Rs152.60 in the interbank foreign exchange market.

    Currency experts said that demand for dollar was remained in the market due to extended holidays for Eid ul Fitr announced by the government. The government announced Eid holidays from May 10 to May 15, 2021.

    However, they said that inflows of Eid related remittances and export receipts helped the rupee to make gain.

    They further said that the latest instructions of the central bank to open bank branches on May 10 and May 11, 2021 to facilitate general public during extended Eid holidays also improved market sentiments.

  • Pakistan’s foreign exchange reserves fall by $777 million

    Pakistan’s foreign exchange reserves fall by $777 million

    KARACHI: Pakistan’s foreign exchange reserves have fell by $777 million during a week owing to repayment of government’s external debt, State Bank of Pakistan (SBP) said on Thursday.

    The country’s foreign exchange reserves fell to $22.746 billion by week ended April 30, 2021 as compared with $23.52 billion a week ago ended April 23, 2021.

    The official reserves of the central bank fell by $830 million to $15.598 billion by week ended April 30, 2021 as compared with $16.428 billion a week ago. The SBP said that during the week government’ commercial loan of $ 1.0billion was paid, whose impact on SBP’s reserves was partially offset by official inflows.

    The foreign exchange reserves held by commercial banks however increased by $53 million to $7.145 billion as compared with $7.092 million a week ago.

  • Pakistan’s fiscal deficit narrows in nine months

    Pakistan’s fiscal deficit narrows in nine months

    ISLAMABAD: Pakistan’s fiscal deficit has narrowed to 3.6 percent of the GDP during first nine months (July – March) of the current fiscal year as compared with the deficit of 3.8 percent in the corresponding months of the last fiscal year, according to data released by the finance ministry on Thursday.

    According to commentary of Arif Habib Limited, Pakistan’s fiscal balance in the current fiscal year to date has strengthened over prior year, with the deficit arriving at Rs1.65 trillion in nine months of fiscal year 2020/2021 (3.6 percent of GDP) compared to Rs1.69 trillion in the corresponding months of the last fiscal year (3.8 percent of GDP), down by 2 percent YoY.

    Moreover, the primary surplus during the period at Rs452 billion (1.0 percent of GDP in nine months of fiscal year 2020/2021) fares better compared to a primary surplus of Rs194 billion witnessed last year (0.4 percent of GDP).

    Primarily, total revenue growth at 6 percent in nine months of fiscal year 2020/2021 to Rs5.0 trillion (nine months of the last fiscal year: Rs4.7 trillion) aided the fiscal balance, translating into 11.0 percent of GDP vs. 10.7 percent last year. The total tax revenue collection has gone up by 5 percent YoY to Rs3.8 trillion. Indirect taxes (+13 percent YoY to Rs2.15 trillion), sales tax (+14 percent YoY to Rs1.42 trillion), and direct taxes (+9 percent YoY to Rs1.25 trillion amid higher number of tax payers), contributed to the overall collection.

    In addition, the government collected Rs1.17 trillion in non-tax revenues, displaying a jump of 13 percent YoY. This was particularly owed to imposition of Petroleum Levy, which is now classified under non-tax revenue (+86 percent YoY | Rs369 billion). On the flipside, the surplus profit of State Bank of Pakistan and Pakistan Telecommunication Authority declined during nine months of fiscal year 2020/2021 to Rs498 billion (-22 percent YoY) and Rs20 billion (-82 percent YoY), respectively.

    In addition, total expenditures went up by 4 percent YoY to Rs6.6 trillion (14.6 percent of GDP vs. 14.5 percent of GDP in 9MFY20). Further breakup revealed that current expenditure underwent an uptick of 8 percent YoY of which markup payments rose by 12 percent YoY. On the contrary, the defence expenses went down by 2 percent YoY to Rs784 billion. Moreover, development expenditure and net lending undertaken by the government declined by 7.5 percent YoY to Rs723 billion.

    Total PSDP expenditure in nine months of fiscal year 2020/2021 arrived at Rs654 billion (-9 percent YoY) with provincial expenditure at Rs390 billion, outdoing federal disbursement of Rs264 billion.

    Decline of 26 percent YoY in deficit during 3QFY21

    The analysts highlighted that cumulatively all four provincial governments recorded an overall balance of Rs413 billion during nine months of fiscal year 2020/2021, compared to Rs344 billion recorded in the corresponding period last year, marking a 20 percent increase. However, Sindh and KPK recorded a decline of 10 percent YoY and 70 percent YoY, respectively.

    Pertinently, budget deficit during 3QFY21 settled at Rs514 billion (1.1 percent of GDP), depicting a decline of 26 percent YoY vis-à-vis Rs691 billion during 3QFY20.

    Total revenues of the government in 3QFY21 arrived at Rs1.64 trillion (3.6 percent of GDP), up by 13 percent YoY from Rs1.46 trillion during 3QFY20.

    FBR taxes increased by 25 percent YoY to Rs1.18 trillion due to 15 percent YoY rise in direct taxes to Rs416 billion in 3QFY21 whereas collection from sales tax and indirect taxes went up by 30 percent and 39 percent YoY to Rs498 billion and Rs769 billion, respectively.

    Total expenditure in 3QFY21 clocked in at Rs2,156 billion (4.7 percent of GDP), up 0.3 percent YoY over the same period of last year (Rs2,149 billion; 4.9 percent of GDP) with a 9 percent rise in defense expenditure to Rs297 billion and 9 percent uptick in current expenditure to Rs2.1 trillion.

  • Karachi Chamber rejects few-day extension for filing sales tax return

    Karachi Chamber rejects few-day extension for filing sales tax return

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Thursday rejected extension of few days for filing sales tax and federal excise returns and making payments.

    KCCI President Shariq Vohra, while referring to FBR’s Letter dated May 6, 2021, stated that the extension in dates of payment and submission of Sales Tax and Federal Excise Return for the Tax Period of April 2021 up to May 18, 2021 and May 21, 2021 respectively were not enough which have to extended to May 30, 2021 to facilitate taxpayers.

    In a letter sent to Chairman FBR Asim Ahmed, President KCCI pointed out that the nominal extension in such dates for filing Sales Tax and FED Return will create difficulties for taxpayers as it takes time to get back to routine after observing extended holidays of Eid-ul-Fitr which will be starting from 9th May 2021 to 16th May 2021.

    Hence, the business & industrial community may not be able to prepare and submit their Sales Tax and Federal Excise Return for the Month of April 2021 within the announced limited extension of just a few days.

    He opined that the overall situation was not favorable for trade and industries as everybody was facing severe liquidity crunch nowadays due to very limited business activities whereas it appears that the government has announced prolonged holidays with an intention to keep the entire population at homes so that the ongoing third spell of COVID-19 pandemic could be controlled.

    Keeping in view the overall situation, President KCCI requested FBR to extend the date of payment and submission of Sales Tax and Federal Excise Return for April 2021 up to May 30, 2021 in the larger interest of FBR and the Business Community while the relevant notification for extension may also be reissued which would be widely welcomed by the entire business and industrial community of the country.

  • Stock market gains 231 points ahead prolong Eid holidays

    Stock market gains 231 points ahead prolong Eid holidays

    KARACHI: The stock market gained 231 points on Thursday despite extended holidays announced for Eid ul Fitr. The stock market will reopen on May 17, 2021.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 45,175 points as against previous day’s closing of 44,944 points, showing an increase of 231 points.

    Analysts at Arif Habib Limited said that the market opened on a positive note and after sustaining a short dip of 54 points below LDCP, bounced back, closing the session on a strong note at 231 points.

    Cement, Fertilizer, Refinery and Technology stocks kept the interest alive and despite a long vacation investors took a long bet.

    Trading volumes remained tilted towards off main board in WTL, TELE, however regardless of the recent onslaught on TRG and NETSOL, buying interest brought the stocks prices of pertinent stocks up generating considerable interest. Among scrips, WTL topped the volumes with 80.3 million shares, followed by TRG (14.7 million) and TELE (12.7 million).

    Sectors contributing to the performance include Cement (+80 points), Banks (+55 points), Technology (+33 points), Tobacco (+25 points), Power (+14 points), E&P (-30 points) and Chemical (-11 points).

    Volumes declined from 259.8 million shares to 245.6 million shares (-6 percent DoD). Average traded value also declined by 36 percent to reach US$ 62.1 million as against US$ 96.7 million.

    Stocks that contributed significantly to the volumes include WTL, TRG, TELE, UNITY and GGL, which formed 53 percent of total volumes.

    Stocks that contributed positively to the index include LUCK (+61 points), TRG (+37 points), BAFL (+26 points), PAKT (+25 points) and KAPCO (+14 points). Stocks that contributed negatively include UBL (-20 points), EPCL (-13 points), POL (-12 points), MARI (-10 points) and PPL (-10 points).

  • Rupee strengthens 44 paisas against dollar

    Rupee strengthens 44 paisas against dollar

    KARACHI: The Pak Rupee gained 44 paisas against the dollar on Thursday despite demand for import payments ahead of extended Eid holidays.

    The rupee ended Rs152.60 to the dollar from last day’s closing of Rs153.04 in the interbank foreign exchange market.

    Currency experts said that demand for dollar was remained in the market due to extended holidays for Eid ul Fitr announced by the government. The government announced Eid holidays from May 10 to May 15, 2021.

    However, they said that inflows of Eid related remittances and export receipts helped the rupee to make gain.

  • Payment to 12 IPPs withheld for NAB cases

    Payment to 12 IPPs withheld for NAB cases

    ISLAMABAD: Economic Coordination Committee of the Cabinet (ECC) has approved payment of first installment to 35 Independent Power Producers (IPPs) out of total 47 whereas payment to the remaining 12 IPPs (under Power Policy 2002) may be withheld owing to the NAB investigation.

    Federal Minister for Finance and Revenue Shaukat Tarin chaired the meeting on Wednesday. Power Division presented a summary before the ECC regarding release of first installment of payment to IPPs.

    Secretary Power Division briefed the Committee about the recommendations of the sub-committee constituted during ECC last week.

    “The ECC approved payment of first installment to 35 IPPs out of total 47 whereas payment to the remaining 12 IPPs (under Power Policy 2002) may be withheld owing to the NAB investigation,” according to as statement.

    Federal Minister for Privatization Muhammad Mian Soomro, Federal Minister for Interior Shaikh Rashid Ahmad, Federal Minister for Economic Affairs Division Omar Ayub Khan, Federal Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Energy Muhammad Hammad Azhar, Federal Minister for Industries and Production Makhdum Khusro Bakhtyar, Federal for National Food Security & Research Syed Fakhar Imam, Federal Minister for Maritime Affairs Ali Haider Zaidi, Adviser to the PM on Commerce Abdul Razak Dawood, Adviser to the PM on Institutional Reforms and Austerity Dr. Ishrat Hussain, SAPM on Finance and Revenue Dr. Waqar Masood, SAPM on Power & Petroleum Tabish Gauhar, Federal Secretaries, Chairman BOI and other senior officers participated in the meeting.

    Governor State Bank of Pakistan Reza Baqir also joined through a video link.

    Secretary Power gave a detailed briefing to the Committee regarding a draft summary for approval of arrangement for providing additional power from NTDC to K-Electric since April 2020.

    The Secretary Power also raised the issue of non-payment for the additional power supply by K-Electric to Power Division.

    After Detailed discussion, the ECC constituted a Sub-Committee comprising Federal Minister for Planning, Federal Minister for Energy, Federal Minister for Maritime Affairs and SAPM on Power to be headed by the Finance Minister to negotiate with the Karachi Electric for settlement of payment dispute amicably.

    Power Division placed a summary before the ECC regarding tax on payments to the offshore supply contractors of Independent Power Producer(s) located in AJ&K.

    The ECC considered and approved the summary to facilitate swift processing of such projects due to its strategic importance.

    The ECC considered and approved a summary tabled by the Ministry of Industries and Production regarding exemption from duties and taxes for import of oxygen gas, oxygen gas cylinder and cryogenic tanks by oxygen concentrators / Generators / manufacturing Plants under respective Harmonized System (HS) codes for a period of 180 days to cope with the increased requirement of oxygen during the third wave of COVID-19 in the country.

    Ministry of Commerce presented a summary regarding implementation of United Nations Security Council Resolutions (UNSCRS) through export Policy Order, 2020 and Import policy Order, 2020.

    The ECC considered and approved the summary.

    Lastly, Power Division presented a summary before the Committee regarding retargeting of power sector subsidies for electricity consumers during phase-I in consultation with Ehsaas and Finance Division. The ECC approved the summary, in principle, with a direction to work out modalities for future course of action.