Commodities pick up modestly in post-budget trading
Trading on the Karachi wholesale commodity markets picked up modestly last week after normal activity was resumed by commercial and brokerage houses. This was followed by the adjustments they had made to the post-budget scenario.
Arrival from the upcountry markets were normal which in turn depressed the prices of some essential items, while others rose amid increasing local demand.
Market sources said that the reports of holding back of stocks of some essential items were not wanting as was reflected by a price flare-up under the lead of wheat.
On the other hand, prices of some industrial raw material eased after trading was resumed on selling prompted by the reports of steady arrivals from the upcountry markets.
Guar was leading among them whose price fell modestly from the peak levels for second consecutive week followed by the reports of fresh rain in the Sindh guar belt. There were also reports of a good crop after two successive failures, brokers said.
However, local processors did not make fresh covering purchases on the plea that the prices were still high as compared to the export parity level. They expected further fall in prices during the next couple of weeks as the recent rain had brightened up the prospects of a good crop after two lean years.
On export front, physical shipment of rice from the old crop against the previously signed agreements remained high as a rice loader was in the port loading the consignment of 20,000 tons.
Most shipments were said to be made to Iran, Africa and some Gulf countries, although the share of basmati was modest owing to tough competition from India, including lower prices.
Reports coming from Sindh and Punjab show that the sowing of the new Irri and basmati crops was in progress. Where it was sown earlier, the growth was normal due to the ample irrigation water and recent rains, market sources said.
The new crop is likely to reach markets by September and the private sector exporters will sign new deals by early October. Few, however, have already made forward deals with their partners. Shipments against these will resume by early November.
At the fag-end of the week, profit-selling emerged on a number of essential counters and pushed the prices down under the lead of pulses. Urad posted a fresh increase of Rs75 followed by the reports of holding back of stocks by some importers and commercial houses.
Moong, on the other hand came in for active selling on reports of steady arrivals from the upcountry markets and fell by Rs60 per 100kg bag. Other varieties were traded at previous levels.
Wheat maintained its upward thrust after climbing up by Rs15 to 20 per bag on reports that the flour mill owners and some leading stockists have cornered the floating stock of the commodity direct from the growers and were selling at inflated rates.
Earlier, wheat rose by Rs60 to 65 per 100kg bag but fresh arrivals from the interior Sindh forced some to sell in part their long stocked commodities.
Barring Irri-broken which suffered a fresh fall of Rs20 per bag amid reports of fall in export demand other varieties, including Irri and basmati, were traded at their last levels.
However, there was slow physical activity in sela and kernal types of fine basmati in the absence of strong export demand resulting in firm prices.
Some claimed that the export of fine types of basmati were being made though on a modest scale because of the price factor as India was selling the same quality at much lower rates.
There was a relative quiet on the sugar front as prices remained stable around previous levels as supplies met demand despite reports of holding back of stocks by the mills.
Among industrial raw materials, guar came in for fresh selling and was marked down by Rs25 to 40 on renewed selling by the stockist followed by reports of a good crop owing to recent rain in the guar belt.
Cereals on the other hand showed easy trend as prices of both maize and bajra were marked down by Rs25 to 50 on selling. Barley on the other hand was traded at previous levels.
Oilseed sector showed steady trend as prices of major seeds including the cottonseed and rapeseed and castorseed remained unchanged, while til was quoted higher by Rs100 on the revival of export demand.
Oilcakes showed firm trend, while rapeseed rose by Rs13 to 15 followed by the reports of higher oil prices. Cottonseed cakes were firmly held at the last levels.—M.A.
Trading on the Karachi wholesale commodity markets picked up modestly last week after normal activity was resumed by commercial and brokerage houses. This was followed by the adjustments they had made to the post-budget scenario.
