Quieter conditions prevailed on the Karachi wholesale commodity markets last week as both the commercial houses and the leading brokers kept to the sidelines awaiting further developments on the Iraq war front.

There was, however, no panic buying from any of the quarters as dealers just marked time and did not indulge in hasty selling or buying as most of the essential items were available around the previous levels.

Brokers said prices of some export and import items, notably pulses and rice, could rise from the current levels if the Iraq war did not end in weeks.

There could be some shipping problems from the overseas markets, including higher freight rates, which in turn will make the imported stuff a bit expensive, they said, adding the pre-war trading in commodities was normal as prices remained stable around the previous levels.

However, interruption in supplies from the foreign markets owing to the Gulf war could push price of pulses higher as bulk of the commodity is imported to make up the local shortfall, they said.

Rice prices could also show sympathetic increase as foreign shipping lines have already announced increase in freight rates and to impose war risk surcharge after the US invasion of Iraq.

Reports that the government has allowed the Trading Corporation of Pakistan to export 0.1m tons of sugar, however, did not have a bullish impact on the local prices, which remained weak amid fears of glut.

But indications are that they are expected to rise during the next couple of weeks after the TCP floats another export tender for the foreign buyers. It has already sold through early week tender a consignment of 12,000 tons at $213 per ton.

The TCP procures sugar from the local mills at around Rs19,000 per ton to support the local industry, which is facing the production glut and is not in a position to export the surplus owing to higher overheads.

Sugar suffered a modest decline of Rs10, while desi sugar and gur were marked up by Rs50 to Rs100 amid active trading.

Price of other essential items remained stable under the lead of wheat followed by reports of new crop arrivals from the lower Sindh wheat belt where harvesting is done a bit earlier. In central and upper Sindh and Punjab, the harvesting of wheat starts in April. Major industrial raw materials, notably on the oilseed sector resisted fresh decline and mostly quoted at the previous levels amid modest activity, notably in the rapeseed sector.

Castorseed and till followed them as prices of the both were quoted at the previous levels despite reports of active foreign demand from the latter.

Guar on the other hand came in for fresh selling followed by reports that the local processors are not inclined to buy beyond their export parity levels. Prices fell by Rs25 per bag.

Wheat did not show much change despite some negative news from the export front and held on to its previous levels amid light buying by the millers.

Pulses on other hand showed mixed trend on revival of demand from the Punjab dealers and pressure on ready supplies. Tuver, gram, gram dal, beetle and masoor dal were quoted lower by Rs50 to Rs150, while gram dal and peas rose by Rs20.

Rice sector showed firm trend followed by reports of short supply and prices of Irri-6 and Irri broken rose by Rs5 to Rs25, kernal type of basmati suffered a decline of Rs100. Sela type was quoted unchanged.

Cereals on the other hand stayed firm under the lead of jowar, barley and bajra, but bulk of the business was done at the previous levels. Maize rose by Rs25.

Oilseed sector on the other hand came in for active support under the lead of rapeseed, which rose by Rs25 followed by reports of delayed new crop arrivals. Castorseed were held unchanged, while til suffered a fresh decline. Oilcakes depicted divergent trend while rapeseed cakes fell by Rs5, cottonseed cakes rose by Rs3 following the reports of short supply.—M.A