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Reduced demand forces Millat Tractors to cut production days

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  • MLT announces closure citing decline in demand for tractors.
  • Analysts say agricultural land of Sindh is still under water due to floods. 
  • Cite high inflation behind reduction in demand for tractors.

KARACHI: Millat Tractors Limited (MTL), in a statement sent to the Pakistan Stock Exchange (PSX), announced the closure of its production on Fridays citing a decline in demand for tractors in the country, The News reported Friday. 

“Due to reduced demand for tractors, the company will observe Fridays as non-production days from December 16, 2022, till further notice,” the company secretary of Millat Tractors said in a statement.

As per the analysts, the agricultural land of Sindh was still under water in many areas due to the cataclysmic floods in the country

They added that there was also an increase in inflation in the country which has led to a reduction in demand for tractors. 

In October, Millat Tractors recorded a decrease of 75% month-on-month and 72% year-on-year to reach a sales figure of 638 units due to the shutdown of plants for 23 days in September amid floods.

In a report published on December 13, sales of all other variants of cars, trucks, buses, tractors, jeeps, pick-ups, and three-wheelers as well as two-wheelers saw a decline in November 2022 compared with November 2021.

Decline in motorcycle production

Meanwhile, motorcycle manufacturing has also witnessed a decline in 2022 which may be due to the steep increase in the price of two-wheelers.

Since bikes are purchased and used by low-income buyers, the sales might have slowed a bit if the prices remained stable, however, at current rates and almost stagnant incomes, people are struggling to make ends meet.

Another reason for the drop, the report added, might be declining agricultural productivity, as most motorbike sales in the country are accounted for in rural areas. Recent floods that affected over 34 million people are a reason for slumping sales.

Motorcycle production data is from the Pakistan Automotive Manufacturers Association (PAMA), however, many motorbike manufacturers are not registered with it, and the Pakistan Bureau of Statistics (PBS) records their production data.

However, the statistics for last year are available that put the total motorbike production at 2.6 million.

The PAMA statistics for the first five months of the current fiscal year give a true picture of the state of the bike industry in the country.

In the July-November 2022 period, the bike industry (registered with PAMA) produced 521,643 bikes against 797,346 produced during the same period of last year. 

This is a massive decline of 34% in the first five months of the current fiscal year.

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Significant surge in the price of gold in Pakistan

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On Friday, the price of gold in Pakistan continued to increase.

According to the All-Pakistan Gems and Jewellers Sarafa Association, the price of 24-karat gold per tola has risen by Rs2,200, reaching Rs249,000.

The price of 10-gram 24-karat gold increased by Rs1,886, reaching a total of Rs213,477. On Thursday, the cost of 10 grammes of 22-karat gold was Rs195,687.

The global gold market likewise had a rising trajectory. As per APGJSA, the worldwide rate was $2,404 per ounce, showing a decline of $24 during the course of the trading day.

The local market witnessed constant silver prices at Rs2,900 per tola.

Market observers attribute the increase in gold prices to other variables, such as volatility in the global market, currency exchange rates, and economic conditions. The ongoing surge in gold prices is likely to impact investment choices and consumer behaviour in the near future.

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Gold prices in Pakistan have risen by Rs 1,200 per tola.

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The price of one tola of 24 carat gold rose by Rs1,200 and reached Rs246,800 on Thursday, compared to its previous sale price of Rs245,600 on the last trading day.

According to the All Sindh Sarafa Jewellers Association, the cost of 10 grammes of 24 karat gold rose by Rs1,029 to reach Rs211,591, compared to the previous price of Rs210,562. Similarly, the price of 10 grammes of 22 carat gold jumped from Rs193,016 to Rs193,959.

The price of silver remained unchanged at Rs2,900 per tola and Rs2,486.28 per ten grammes.

According to the association, the international market price of gold rose by $10, reaching $2,382 from $2,372.

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The federal government has declared wage and pension increments for its employees.

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The Ministry of Finance has formally declared a rise in the remuneration and retirement benefits of personnel working for the federal government, offering substantial economic alleviation.

According to the notification, personnel in grades 1 to 16 will experience a 25% increment in their salaries, while officials in grades 17 to 22 will be granted a 20% rise. The implementation of this modification will commence on July 1, 2024, and will be applicable to the employees’ fundamental remuneration.

In addition, retired federal government employees would receive a 15% rise in their pension payments. This increase is applicable to retirees from both the civilian and military sectors. It is important to mention that employees who retire on or after July 1, 2024, will also qualify for this pension rise.

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The 15% increase in pension will be computed based on the amount of pension received by retired employees after deductions. Nevertheless, the letter specifies that ad hoc aid will not be factored into the calculations for pension and gratuity.

Moreover, this increment will have no effect on the calculation of housing rent allowances for employees.

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