March 27, 2006	Monday	Safar 26, 1427

THE commodity markets last week maintained an upward trend under the lead of some essential items but physical business remained slow as commercial houses were not aggressive buyers at higher levels. However, it was satisfying to note that a further price increase was averted as retailers adhered to the sidelines most of the time awaiting an improvement in supply position and a consequent fall in prices, dealers said.

Owing to previous week’s run-up under the lead of pulses, prices of some other essential items also stayed on the higher side and in turn left a negative impact on the daily volume, they said.

There was a relative quiet on the sugar front amid counter claims of stable prices on the Utility Stores in the beginning of the week. But in open market, the situation remained unchanged as retailers were selling the commodity at around Rs40 per kilo as compared to Rs27 at the Utility Stores.

The official claim of 3.9 million tons in stock against an annual consumption of 3.8 million tons failed in stabilizing the prices at around official rates as millers were releasing the commodity according to their own market perceptions, said a leading broker.

He added that the consumer instead of chasing high prices has curtailed his daily intake in an effort to balance his monthly budget.

Wheat, on the other hand, did not show much change as supply position kept improving steadily after new crop arrivals from the lower Sindh belt.

According to market sources new crop arrivals from the central Sindh were expected to pick up on the resumption of harvesting in major crop areas by next month. The local consumer and mill demand both will remain low which in turn could pull the prices further down.

On export front, physical shipments of rice were maintained as a loader remained in the port in quick succession from various countries to load mostly IRRI types.

Private exporters claimed that they already have shipped about 2.5 million tons of IRRI varieties to a number of countries, including Iran, Gulf and Africa. Fresh forward orders were in hand for future deliveries, they added

In physical trading, the bulk of activity remained confined to the pulses sector followed by reports of short supply owing partly to slow import and to the reported holding back of stocks by leading commercial houses.

The biggest rise of Rs500 per bag was noted in urad followed by Rs100 to 250 per bag in masoor whole and masoor dal, the bulk of which was imported from various countries, including India. It was only the Indian variety which was quoted lower as compared to the Australian type - owing to freight differences.

Dealers said that the ready activity remained slow as retailers and wholesalers curtailed their ready offtake hoping a fall in the prices once the supply position improved, they said.

Gram whole and gram dal also rose in sympathy. This was followed by the reports of pressure on local supplies owing to larger export in the backdrop of a bumper crop last year.

Among other essential items, wheat showed a modest fall of Rs5 followed by reports of some problems on the export front but a larger fall was averted thanks to active mill demand.

But brokers feared further softening of prices in coming weeks after the new crop arrives from the Sindh market in a much bigger way by next month.

Physical shipments of rice were maintained at a steady pace as two loaders were in the port loading about 50,000 tons of the commodity to various destinations. The market sources expect the rice exports to touch a high mark of about one billion dollars during the current season.

Conflicting reports poured in later part of the week on sugar prices with no clear-cut idea as to, on which rates, this commodity was being sold at different outlets throughout the country. However, the Utility Stores were an exception where the commodity was available at the official rate of Rs27 per kilo.

Cereal sector lacked normal support as the prices of maize, bajra and some other varieties were traded at previous levels as supplies matched the local demand. Among major industrial raw materials, guar seeds were also traded at previous levels amid slow ready mill off-take.

Oilseeds were traded at previous levels owing to steady arrivals from the Sindh markets. Cottonseed, castorseed and rapeseed were traded at last levels barring rapeseed from Nawabshah which was quoted higher by Rs15 to 20 per 40kg.

Oilcakes, on other hand, remained unchanged from previous levels in sympathy with major seeds and as a result, both rapeseed and cottonseed cakes were held unchanged.—M.A.