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Yellen warns of US default risk by early June, urges debt limit hike

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Yellen warns of US default risk by early June, urges debt limit hike

U.S. Treasury Secretary Janet Yellen said on Friday the United States will likely hit the $31.4 trillion statutory debt limit on Jan. 19, forcing the Treasury to launch extraordinary cash management measures that can likely prevent default until early June.

“Once the limit is reached, Treasury will need to start taking certain extraordinary measures to prevent the United States from defaulting on its obligations,” Yellen said in a letter to new Republican House of Representatives Speaker Kevin McCarthy and other congressional leaders.

She urged the lawmakers to act quickly to raise the debt ceiling to “protect the full faith and credit” of the United States.

“While Treasury is not currently able to provide an estimate of how long extraordinary measures will enable us to continue to pay the government s obligations, it is unlikely that cash and extraordinary measures will be exhausted before early June,” the letter said.

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Republicans now in control of the House have threatened to use the debt ceiling as leverage to demand spending cuts from Democrats and the Biden administration. This has raised concerns in Washington and on Wall Street about a bruising fight over the debt ceiling this year that could be at least as disruptive as the protracted battle of 2011, which prompted a brief downgrade of the U.S. credit rating and years of forced domestic and military spending cuts.

The White House said on Friday after Yellen s letter that it will not negotiate over raising the debt ceiling.

“This should be done without conditions,” White House spokesperson Karine Jean-Pierre told reporters. “There’s going to be no negotiation over it.”

House Republicans are planning to move a “debt prioritization” measure by the end of March that would call on the U.S. Treasury to continue making certain payments once it reaches the debt ceiling, but details have not been finalized, a person familiar with the plan told Reuters. The proposal was first reported by the Washington Post.

The Republican plan will call on the Treasury Department to keep making interest payments on the debt, the Post reported, citing sources. It may also stipulate the Treasury should continue making payments on Social Security, Medicare and veterans benefits, and fund the military, the newspaper said.

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The plan was part of a private deal reached this month to resolve the standoff between right-wing hardliners in the House and McCarthy over his election as House speaker, the Post said.

Yellen s estimate expressing confidence that the government could pay its bills only through early June without increasing the limit marks a deadline considerably sooner than forecasts by some outside budget analysts that the government would exhaust its cash and borrowing capacity – the so called “X Date” – sometime in the third quarter of calendar 2023.

Analysts have noted that some Treasury bills maturing in the second half of the year are sporting a premium in their yields that may be tied to elevated risk of a default in that window.

“You could read this partly as trying to get Congress to act sooner rather than later,” said Bipartisan Policy Center economics director Shai Akabas, adding that Treasury was being conservative in its approach.

Yellen said that there was “considerable uncertainty” around the length of time that extraordinary measures could stave off default, due to a variety of factors, including the challenges of forecasting the government s payments and revenues months into the future.

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PENSION INVESTMENTS SUSPENDED

As of Wednesday, Treasury data showed that US federal debt stood $78 billion below the limit, with a Treasury operating cash balance of $346.4 billion. The department on Thursday reported an $85 billion December deficit as revenues eased and outlays grew, particularly for debt interest costs.

Yellen said in her letter that the Treasury this month anticipates suspending new investments in two government retiree funds for pensions and healthcare, as well as suspending reinvestments in the Government Securities Investment Fund, or G Fund, part of a savings plan for federal employees. The retirement investments are restored once the debt ceiling is raised.

“The use of extraordinary measures enables the government to meet its obligations for only a limited amount of time,” Yellen wrote to McCarthy and other congressional leaders.

“It is therefore critical that Congress act in a timely manner to increase or suspend the debt limit. Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability,” Yellen wrote. 

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Over 70pc global workforce faces climate change risks: ILO

Over 70pc global workforce faces climate change risks: ILO

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Over 70pc global workforce faces climate change risks: ILO

More than 70 per cent of the global workforce is exposed to risks linked to climate change that cause hundreds of thousands of deaths each year, the International Labour Organisation (ILO) said on Monday, adding governments would need to act as the numbers rise.

Workers, especially the world’s poorest, are more vulnerable than the general population to the dangers of climate extremes [extreme weather events] such as heatwaves, droughts, wildfires, and hurricanes because they are often the first exposed, or exposed for longer periods and at greater intensity.

Read more: Heat, disease, air pollution: How climate change impacts health

As climate change accelerates, governments and employers are struggling to protect employees, the ILO said in a report.

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“A staggering number of workers are already being exposed to climate change-related hazards in the workplace, and these figures are only likely to get worse,” the report entitled “Ensuring safety and health at work in a changing climate” said in its conclusions.

“As (the hazards) evolve and intensify, it will be necessary to re-evaluate existing legislation or create new regulations and guidance.”

Some countries have improved heat protections for workers, such as Qatar, whose policies came under scrutiny ahead of the 2022 soccer World Cup.

However, rules to govern other dangers like growing pesticide use for agricultural workers are less common.

Read more more: Climate change affecting women, especially those working in agri sector, disproportionally in countries like Pakistan

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“We do have some (countries) that already limit exposure to high temperatures and also limit exposure to air pollution, but we rarely have occupational exposure limits set for the other hazards,” said Manal Azzi, ILO Senior Specialist on occupational safety and health.

Read more: Lahore and Chingchi effects: Noise at workplace has serious effects on your health

The share of global workers exposed to the most widespread hazard, rising temperatures, has risen by around 5 percentage points over the last two decades to 70.9 per cent, the report said,

Other climate dangers often co-exist, creating a “cocktail of hazards,” the report said, with UV radiation and air pollution each affecting 1.6 billion people.

Read more: Climate change hits Asia hardest, below-normal rains in Hindu Kush range of Pakistan: UN

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Because a worker is likely to be exposed to multiple dangers at once, an ILO spokesperson said it was impossible to calculate exactly what portion of the 3.4 billion global workforce was at risk.

Climate-related hazards are being linked to a cancer, kidney dysfunction, and respiratory illnesses, leading to deaths or debilitating chronic conditions or disabilities.

Air pollution is the most deadly risk, causing some 860,000 work-related deaths among outdoor workers annually, the ILO report said. Excessive heat causes 18,970 occupational deaths each year and UV radiation kills 18,960 through non melanoma skin cancer, it said.

Read more: Pakistan among six nations bearing the brunt of pollution health burden

“The greatest impacts will be felt by the working poor, those working in the informal economy, seasonal workers and workers in micro and small enterprises,” the report said.

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In some cases, the very technologies meant to slow climate change like solar panels and lithium-ion batteries for electric vehicles can end up producing new dangers since they contain toxic chemicals, it said.

The ILO plans a major meeting in 2025 of government, employer and worker representatives to provide policy guidance on climate hazards.

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India sugar demand surges in heatwave and election season

India sugar demand surges in heatwave and election season

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India sugar demand surges in heatwave and election season

 Indian sugar consumption this year is poised to hit a record high as demand during the peak summer season gets a boost from heatwaves and the mobilisation of millions for elections in the scorching temperatures.

Higher consumption would lift local prices and boost margins of sugar producers such as Balrampur Chini, Shree Renuka Sugars, Bajaj Hindusthan and Dwarikesh Sugar, and help them in making cane payments on time to farmers.

Consumption of cold drinks and ice cream, and as a result demand for sugar, rises in India during the summer months roughly from mid-March to mid-June.

But this year demand is above average as heatwaves and election rallies boost consumption of ice-cream and soft drinks, said Avantika Saraogi, executive director at Balrampur Chini Mills.

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Maximum temperatures in many parts of India have risen above 40 degrees Celsius, and the weather department has forecasted that the country is likely to experience more heatwave days than normal between April and June.

Read more: India braces for heatwaves with impact seen on inflation, election 

During the harsh summer, India is hosting the world’s largest election, in which nearly a billion people will be eligible to vote.

Political parties hold huge rallies, some attended by as many as 200,000 people, undeterred by the sweltering heat, which only intensifies as the campaign picks up pace.

Earlier this week, following an energetic election rally at Pune in the scorching afternoon sun, dedicated workers of a political party flocked to a nearby restaurant to quench their thirst with refreshing soft drinks.

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“It’s sweltering out there. We need something icy to keep us going in this heat,” said Mahesh Pawar, one of the workers.

“We’re grateful to our leader for providing us with these refreshing beverages to keep our spirits high.”

SWEET SUMMER

Indian sugar consumption in during April-June could rise to 7.5 million tons, up 5 per cent from a year ago, said a Mumbai-based dealer with a global trade house.

This year’s unusual rise in consumption is temporary, with demand growth returning to a normal pace next year, said Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Ltd.

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“But right now the industry is experiencing an unusual boost in demand. This is expected to lift total consumption this year to a record 29 million metric tons,” Naiknavare said.

India’s sugar consumption in the 2022-23 marketing year, which ended on Sept 30, stood at 27.85 million tons.

Higher demand has already begun lifting sugar prices, which have risen nearly 3pc in a fortnight.

The government has allocated a higher quota for April compared to last year, but prices are still rising due to robust demand from bulk consumers, said Ashok Jain, president of the Bombay Sugar Merchants Association.

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Refineries against fuel price deregulation which Ogra says will boost competition

Refineries against fuel price deregulation which Ogra says will boost competition

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Refineries against fuel price deregulation which Ogra says will boost competition

Pakistan’s plans to deregulate fuel prices could lead refiners to halt planned upgrades worth up to $6 billion and force some refineries to close, some of the country’s top refiners said in a letter to the country’s oil regulator.

Looking to drive down prices for consumers, the South Asian nation’s Oil & Gas Regulatory Authority (Ogra) has proposed that oil marketers and refineries be allowed to set fuel prices, instead of the government setting prices.

As part of the change, Ogra proposed scrapping or reviewing a rule that requires fuel buyers to purchase supply from local refineries, another issue the refiners said could result in “disastrous consequences”.

The refiners – state-run Pakistan Refinery and private domestic refiners Pak Arab Refinery, Attock Refinery, Cnergyico and National Refinery – said they were already struggling to operate near full capacity, and asked that they be consulted before the implementation of “irrational recommendations”.

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“The refining sector requires Ogra support through pragmatic and supportive measures, rather than suggesting ways that if implemented would result in their permanent closure,” the refiners told Ogra on Monday in a letter, which was reviewed by Reuters.

The deregulation was aimed at boosting competition and protecting the public interest, Ogra told Reuters in a statement on Tuesday, but did not respond to specific questions on the letter from the refiners. However, it said in an April 17 presentation reviewed by Reuters the potential impact of deregulation on refinery upgrades had to be assessed carefully, calling it a challenge.

“The refineries upgradation will bring in investment of $5-6 billion and not only result in cleaner environment-friendly fuels but also result in savings of precious foreign exchange of the country,” the refiners wrote in the letter to Ogra. 

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