Mixed conditions prevailed on the wholesale Karachi commodity markets during the preceding week as prices of most of the essential items remained stable despite reports of steady new crop arrivals from the upcountry trading centres.
The higher crop ideas for wheat and sugar, however, did cause either-way flutters amid alternate bouts of buying and selling, but the final closing was broadly mixed, although future price outlook will largely depend on the export prospects of the both, dealers said.
A record increase in sugar production to 3.5 million tons during the current year, for instance, did not influence the bearish tendencies, though prices showed a modest decline at the fag-end of the week on selling from the commercial houses.
Floor brokers said successive local purchase and foreign sales tenders being floated by the Trading Corporation of Pakistan to dispose of the expected surplus of sugar has a positive impact on the local prices and fully absorbed the bearish impact of a record crop.
The TCP has already physically shipped a consignment of 13,000 tons of sugar sold to a Gulf-based buyer at $247 per ton early this month and invited offers for another 12,000 tons from the mills against which some of the mills have already indicated their selling prices.
“The maiden shipment of sugar during the current season is expected to reinforce the perception that Pakistan could make its strong presence on the world sugar market, notably in the deficient countries,” says a mill owner, adding “but not without official help.”
Market sources say the government has already waived 15 per cent sales tax on sugar, which in turn has made its export more competitive, leading to smooth sailing on the export front.
Wheat prices also remained stable followed by reports of export deals for half-a-million tons and active local mills demand, leading among them building up long stock positions at the prevailing levels.
The arrivals of new crop from the lower and central Sindh markets remained fairly steady, which in turn did not allow any major change in the prevailing prices, dealers said.
After early decline wheat rose by Rs5, while sugar prices suffered fall of Rs10 per bag on selling prompted by reports of steady new crop arrivals from the Sindh mills.
Among the pulses, peas and gram whole posted fall to the extent of Rs5 to Rs35, while urad rose further by Rs87.50, with all other varieties remaining unchanged from the previous levels amid falling ready demand.
Some of the industrial raw materials also showed upward movements on active support extended by the processors, notable among them being guar, which moved further higher by Rs10.
In the rice sector basmati kernal, basmati and Irri-6 rose further by Rs20 to Rs50 per bag, while sela new variety fell by Rs125 on selling prompted by larger arrivals from the Sindh markets.
Brokers said revival of export demand was said to be chief reason behind the increase in prices of kernal type of basmati. The other aiding factor was fall in stocks of the old crop.
Among the creals, jowar posted a fresh gain of Rs50 followed by reports of holding back of stock by some of the leading upcountry and upper Sindh traders, while bajra suffered fresh fall ranging from Rs10 to Rs20. Maize on the other hand was traded at the previous levels amid slow trading.
Major industrial raw materials, notably oilseeds sector stayed firm and were mostly quoted unchanged from the previous levels amid slack demand owing to steady new crop arrivals.
All types of rapeseed consolidated their previous gains followed by reports of firm oil and cakes markets and fall in arrivals from Sindh markets.
Castorseed again came in for active support from the exporters and local crushers and finished with fresh gains ranging from Rs10 to Rs20 amid active trading.
Til followed it on reports of active export demand and ended with a modest rise of Rs10. Reports of a short crop also aided the sentiment.
Oilcakes showed mixed trend as prices of rapeseed cakes rose by Rs10 to Rs20 in sympathy with firm rapeseed and firm oil market, cottonseed cakes remained pegged at the last close.—M.A
