PRICES of some essential items maintained an upward drive last week on the Karachi wholesale commodity markets due to a continued pressure on ready supplies for second consecutive week.

Therefore, the physical business remained light as many retailers and wholesalers did not make fresh covering purchases hoping a fall in the prices once the supply position improves.

But it was not clear whether or not the wholesalers or importers were behind the fresh price flare-up caused by the short supply, dealers said.

Most price changes were again noted in pulses where leading importers were reportedly holding back the stocks in an apparent effort to keep prices above the current levels, brokers said.

They said that the prices should have reflected the subsidy given to importers at the rate of Rs60 per ton in the form of freight charges. These should have eased the prices a bit but instead these rose further up owing to tight ready position.

The disturbing feature was that the prices of gram whole and gram dal also climbed in the backdrop of a bumper crop. Although, the surplus gram whole was exported to some countries including India but there was enough stock to meet the ready demand and check any price flare-up.

A bumper gram crop was harvested in the season ending in April. In view of a sizable exportable surplus, exports were allowed which caused the price increase in the local market.

Market sources said that the prices should have eased as a huge consignment of 36,000 tons gram was imported instead the prices went further up.

Among other essential items, wheat came in for fresh support and the increase was modest for the third week in a row. The reports of a go-ahead signal to export the surplus triggered short-covering by the commercial houses who sold it at the enhanced rates.

Rice prices remained stable around previous levels despite steady physical shipments against forward deals. Two ships called on the Karachi port during the last week and loaded the commodity for foreign destinations.

Most of the essential items finished sharply higher under the lead of masoor whole and masoor dal followed by reports of pressure on ready supplies and lower imports.

Masoor whole and masoor dal were quoted higher by Rs200 to 250 per bag despite the fact that it was being imported from half a dozen companies, including Indian.

It was followed by gram whole and gram dal on strong local demand and reports of holding back of stocks by leading stockists and commercial houses.

The net increase over the week was of the order of Rs175 per bag and dealers predicted that the prices could rise further as supplies were far below the local demand.

Wheat followed them in sympathy and was quoted higher by Rs20 per bag for the third week. Reports of export and fall in arrivals from the upcountry was said to be the chief reason behind the fresh price flare-up.

The rice sector which was dormant for the last couple of weeks despite higher exports, also posted gains ranging from Rs30 to 50 per bag for both IRRI broken and IIR-6 followed by reports of strong export demand and short stock. Basmati was an exception which fell by Rs50 on late selling.

Cereals on the other hand remained under pressure and were market down by Rs10 to 15 for maize and bajra, while barley was traded at previous levels.

Oilseed sector also came in for active support followed by the extended support of crushers and firm oil and cake markets. Prices of rapeseed were quoted higher by Rs20 to 50 per 40kg.

But on the other hand other major seeds, including cottonseed, castorseed and til were traded around previous levels amid modest local demand. Exporters remained conspicuous by their absence.

Oilcakes lacked normal support and comfortable ready position did not allow any changes in their price structure. Stray business was reported at previous levels.—M.A.