August 26, 2002	Monday	Jamadi-us-Saani 16,1423

A price flare-up in guar highlighted the trading on the wholesale commodity markets during the previous week, giving a pleasant surprise to even the most well-informed commercial and brokerage houses.

Essential items also witnessed a general flare-up as speculative demand remained dominant amid reports of pressure on the ready supplies and the slow arrivals from the upcountry markets.

Pluses led the market advance under the lead of masoor dal, imported type, which rose by Rs300 per bag, while others followed it rising in unison.

The interesting feature was that sugar was the only item, which suffered a fractional fall, while others both essential and industrial raw materials rose.

Prices of guar have been rising for the last three weeks but modestly and there was no sign of speculative activity. But a price flare-up of about Rs600 per 100kg bag during the week caught unaware, all and sundry.

Most of the leading brokers failed to pinpoint any specific reason behind the unprecedented increase in prices, which virtually halted the physical trading in commodity.

But some others attributed the speculative rise to reports of a short crop in Sindh and Balochistan because of the lack of rain during the sowing time last season, and also during the current season.

Guar is billed as a ‘barani crop’ as unlike other major cash crops it needs a little water and single rain at the time of sowing in July or August, which is claimed to be sufficient for a healthy crop, they added.

“The guar trade is now in the tight grip of speculative forces”, says a leading brokers adding, “they may ease their squeeze after pushing prices further higher”, a local processor said.

Processors claim the crop is not short as Punjab has harvested a much better crop, which could compensate for the losses in Sindh if there were any, and then the prices may crash as they rose in a week.

Some 10 years back, prices have touched an all-time high mark of Rs2,800 per bag creating problems for both the local mills and on the export front.

Guar is a major export item and a foreign exchange earner as its by-products are used in a number of industries including textiles, and it remains in strong demand throughout the world the whole year, dealers said.

Other allied items, notably some other industrial raw materials also showed sympathetic increase and so did some of the essential items, notably pulses.

Among other raw materials, rapeseed also attracted active buying followed by the reports of strong oil and cakes markets and were firmly held at the previous week’s higher levels.

Sugar prices remained under pressure and suffered a fresh modest fall of Rs10 on stray selling by the mills and slow demand from the Punjab dealers.

Wheat, however, came in for active mill support and rose by Rs20 per bag followed by the reports that the TCP has sold 30,000 tons to a foreign buyer at $114 per ton.

Rice sector maintained a firm posture followed by the reports of active local demand and a reported slight pressure on the ready supplies.

The largest rise of Rs100 per bag was recorded in sela basmati followed by basmati and Irri broken, which rose by 25 to 35, with all other varieties remaining pegged at the last close.

Pulses rose in unison under the lead of masoor, moong, gram dal, beetle, which came in for active support and finished higher by Rs50 to 250, beetle being the largest gainer.

Cereals also followed the general upturn as the prices of Jowar, maize rose by Rs20 to 50, while bajra was traded at the last levels amid active trading.

Oilseed sector again showed quiet trend as the prices of rapeseed were held unchanged owing to slack demand from the mills and reports of fresh arrivals.

Castorseed and till also followed the major seed and were held unchanged amid reports of falling demand from the exporters.

Oilcakes showed firm trend amid reports of short supply and prices rose further by Rs5 for both rapeseed and cottonseed cakes.—M.A