MOST of the essential commodities showed rising trend in the last week due to a pressure on ready supplies and active short-covering purchases made by the wholesale dealers amid light physical activity.
All throughout, supply and demand remained in limelight after the Cabinet decision to import half a million tons of wheat and a substantial quantity of sugar to ease the situation.
“While a bumper crop of 21 million tons could not keep the prices normal, imports too, may not help in resolving the issue. It needs to be found somewhere else”, dealers said.
Sugar also, is in an identical situation despite the import of 0.3 million tons early this year and a release of considerable quantity by the TCP. Sugar mills still hold an unsold stock of 1.2 million tons but prices are on the rise, signalling that the import may not be the only solution. Things must be probed from other angles, as well, they said.
“Commodity trade is now dominated by the big business which has enormous fund to corner the floating stock at the time of harvesting for setting a price trend”, said a leading broker.
As a result, prices of most essential items, as well as of the industrial raw materials are double than of the last year, he added.
There are reports of holding back of stocks by some leading commercial houses to push the prices further up on some counters.
A sharp increase in pulses led the market advance. Pulses have been static for last couple of weeks but a sudden rise surprised even the well-informed brokers.
For instance, dal masoor imported from India was being sold at Rs3,300 per 100kg bag but was quoted higher by about Rs500 per bag during week for no apparent bullish reason.
Floor brokers said that those who imported the commodity from India raised their selling prices in line with the others, notably stuff from Iran and Australia. Although, Indian imports are cheaper.
In the absence of a monitoring agency, importers and wholesalers operate according to their whims fearing a little official checking, they said.
After remaining static during the post-budget weeks, pulses came in for strong buying from the wholesalers amid reports of pressure on supplies and holding back of stocks by some.
The biggest rise of Rs437 per bag was noted in tuver followed by the Indian masoor dal which rose by Rs150 after ruling at lower levels. Price flare-up was said to be sympathetic with other varieties.
Urad also rose by Rs100 per bag, while all other varieties were traded at last levels. Some brokers said that the demand from Punjab traders was another supporting factor fuelling the price flare-up.
With the exception of wheat which suffered a fresh fall of Rs15 per maund on talks of further imports and steady release of stocks by commercial dealers, all other essential items were held unchanged under the lead of sugar and rice.
There was a relative quiet on rice as the old crop stocks are falling to new lows owing to local demand. Some private sector exporters may be holding stray stocks against their forward sales. Unlike the previous weeks, no rice loader called on the Karachi port.
IRRI-6 broken was, however, an exception which came in for renewed selling for the second week in a row and fell by Rs10, while fine varieties were held unchanged.
Among major industrial raw materials, guar again came in for active support and rose by Rs50 to 75 per bag. Reports of holding back of stocks and slow arrivals from the Sindh markets were supporting factors fuelling the upturn.
Cereals also maintained a firm outlook amid reports of lower arrivals from the upcountry markets. As a result, prices of maize and bajra were quoted higher by Rs30 to 50.
Oilseed sector showed quietly steady trend as supplies matched local demand of the processors. Prices of cottonseed, rapeseed, and castorseed were firmly held at their last levels amid active mill buying.
Til did not show any change for the second week in a row followed by reports of fall in export demand despite lower local prices. Prices have fallen from recent highs of Rs2,000 per 40kg to 1,700 during the last couple of weeks.
Oilcakes again showed divergent trend while cottonseed cakes rose by Rs10 to 15 followed by the reports of pressure on ready supplies. Rapeseed cakes posted a fresh fall of Rs4 to 5 amid slow trading.—M.A.
MOST of the essential commodities showed rising trend in the last week due to a pressure on ready supplies and active short-covering purchases made by the wholesale dealers amid light physical activity.
