June 19, 2006	Monday	Jumadi-ul-Awwal 22, 1427

TRADING on the Karachi wholesale commodity markets last week failed to pick up as buyers kept to the sidelines. They were waiting for a reduction in the prices as claimed by the official sources in the backdrop of freight subsidies allowed on some essential items.

As leading importers who had bought the commodities at high rates held on to their stocks, dealers bringing the same from the upcountry markets also remained glued to their positions. They were waiting for the market to settle down in the post-budget trading sessions.

Physical business was on the lower side of weekly average as retailers and some consumers did not resume their post-budget buying at the prevailing high levels. But reports coming from the government-designated outlets indicated a decline in the prices of some pulses by Rs6 to Rs8 per kilo.

However, the fall was not reflected on the wholesale markets. Buying and selling operations over there remained sluggish and prices generally to pre-budget levels. Some dealers predicted the current status quo to give away as importers and wholesalers will have to toe a general line.

Gram whole and gram dal were exceptions by suffering sharp fall as some local brokerage houses had to sell in panic on the fears of a further decline in prices. Both are locally-produced varieties from the new crop. Gram whole is also being exported to some countries, including India and Iran to dispose off the exportable surplus.

On the other hand imported varieties did not soften and stayed at their previous levels. The current standoff is expected to continue for another couple of weeks depending on the supply and demand factors, dealers said.

But some others said that the fresh import of pulses under freight subsidies ranging from Rs50 to 60 per ton were expected to be sold at lower rates once fresh consignments arrived.

Prices on other essential counters, including sugar and wheat remained stable but there were no signs of easing on any counters despite the reports of oversupply and partial selling by some brokerage houses.

On the export front, physical shipments of rice against forward deals were maintained to meet the deadline but prices were stable around previous levels amid active local activity. Import of sugar was also on the higher side as two ships loaded with the commodity called at the port during last week.

In the middle of the week trading activity picked up as commercial houses indulged in selling on fears of further fall in the prices of some essential items, notably the pulses followed by reports of arrivals of fresh consignments of the imported stuff at cheaper rates. Freight subsidy also enhanced competition among importers.

Prices of gram dal, gram whole and urad suffered fall ranging from Rs100 to 175 per bag on active selling by those who were holding previous stocks to sell at higher rates. Other varieties, however, were held unchanged under the lead of masoor whole and dal, moong and some other varieties in the absence of strong demand.

Among other essentials, wheat was traded around previous levels as supply position remained fairly stable - thanks to steady arrivals from the upcountry market and a routine mill demand. Some brokers also disposed it off at the prevailing rates.

After having ruled around previous echelons for last couple of weeks and active physical shipments against the forward deals with foreign buyers, rice varieties showed an increase thus reflecting the pressure on local supplies in the backdrop of a decline in arrivals from the upcountry, dealers said.

The biggest rise of Rs300 per bag was recorded in kernel type of basmati followed by the reports of fresh buying orders, both from the Gulf and some western countries. Other types, notably IRRI-6 and IRRI-9 also posted gains ranging from Rs25 to 50 per bag, while others were held unchanged.

Dealers said that owing to high exports, the commodity appears to be in a short supply. There are also fears that its prices could rise further before the arrival of new crop by late September.

There was a relative quiet on the sugar front despite steady arrival of the imported stuff.

Cereals remained under pressure on selling prompted by reports of larger arrivals from the upcountry market. Both maize and bajra were marked lower by Rs25, while others stayed unchanged at previous levels.—M.A.