May 15, 2006	Monday	Rabi-us-Sani 16, 1427

PRICES of some essential items on the Karachi wholesale commodity markets posted fresh modest fall on selling by local stockists and falling retailers’ demand.

Dealers said that the steady arrival of some pulses from the upcountry markets also prompted a good bit of selling by local stockists, fearing a further fall in the prices.

The major decline was noted in gram whole and gram dal which had soared to new levels amid reports of a short new crop and steady physical shipments against the forward deals with foreign importers, analysts said.

They said that the new gram crop was not short as was speculated by some brokers which had pushed the prices to new seasonal highs. However, the stock was reportedly held back by the upcountry traders to keep the prices high.

But as prices have stabilised around current levels and there was no fresh increase, some of them hastened to send their stocks to local markets at lower levels which in turn caused the fall.

According to market sources, the new gram crop was not short but a strong demand from the exporters and holding back of stocks by the dealers caused a price flare-up.

Prices of gram were expected to fall further during the next couple of weeks as arrivals from the upcountry markets were increasing each week. Retailers and traders had reduced their daily intake hoping further fall.

Although new crop arrivals remained fairly steady, wheat prices were held firm to modestly higher on reports of 10 per cent duty on the import of commodity from other countries. But brokers ruled out the possibility of major change in the prevailing price outlook at least for near-term as mills were buying directly from growers and agents.

There was a relative quiet on the sugar front and prices were said to be stable around previous levels as supplies showed further improvements because of larger imports and release of the committed quota by local mills.

Prices of some major industrial items also showed softening tendency on selling by local brokers followed by reports of steady arrivals from the upcountry market. Guar seeds were leading among them.

After mid-week, the price trend turned mixed as some essential items came in for active support as pent-up demand figured prominently amid market talk of pressure on the supplies.

Wheat was leading among them which had surged by Rs15 per bag in response to the levy of 10 per cent import duty on future imports. But arrivals from the upcountry markets were fairly steady and averted larger fall.

Owing to physical shipments against forward deals, reports of fresh agreements with some African countries triggered fresh buying by the locals fearing further increase in the prices.

Reports of fresh export agreement with Iran was another aiding factor which pushed the prices further up under the lead of IRRI-6 being quoted higher by Rs15 to 20, while basmati by Rs50 per bag. IRRI broken was an exception which attracted selling and fell by Rs20.

Fine varieties of basmati, including sela and kernel were traded at previous levels despite reports of active demand in European countries and some Gulf States. Higher crop filled the supply gaps caused by exports.

Pulses showed a mixed trend. While gram dal was quoted higher by Rs25 after initial fall, gram whole was quoted higher by Rs25 followed by the reports of fall in new crop arrivals from Sindh markets.

Among major industrial raw materials, guarseed, recovered earlier losses following the revival of mill demand and was marked up by Rs25 after having fallen by the same amount earlier in the week.

But on the other hand cereal ruled easy and fell by Rs10 to 25 for bajra and maize, while barely was traded at last level amid reports of steady arrivals followed by the selling by commercial dealers.

Major oilseeds did not show much change as prices of cottonseed and rapeseed were again quoted at previous levels amid slow trading and falling crushers’ demand.

Castorseed on the other hand attracted modest support followed by reports of export enquiries and active local demand. It rose by Rs25 to 50 per 40kg but til was held unchanged on the lack of export demand owing to higher local prices.

Oilcakes ruled unchanged for rapeseed cakes while cottonseed cakes came in for active support followed by the reports of short supply and holding back of stocks by leading speculators on forward counter. It rose by Rs10 to 15 per bag.—M.A.