Prices of essential items earlier last week showed fresh increase on the Karachi wholesale commodity markets as consumers reported pressure on ready supplies owing to slow arrivals from the upcountry markets.

But the mid-week rain kept buyers out of the market which in turn depressed some of the essential items as stockists lowered their selling prices but physical activity remained slow in the absence of buyers.

Floor brokers said, there was no panic among the commercial traders and leading brokerage houses following the 0.5 per cent hike in the discount rate by the central bank to 10 per cent after the trading was resumed as supplies from various sources virtually dried up.

It may not be the case of holding back of stocks to recover last week’s losses followed by steep decline in prices but a fresh price flare-up was caused by short-supply, they added.

“Leading commodity traders seem to have digested the negative impact of interest rate hike as most among them were not inclined to sell at the falling prices and held on to their unsold stocks of essentials”, some others said while adding. ” they again raised prices to the pre-reaction levels”. The market advance was led by the rice and pulses sectors but dealers said physical activity remained slow as retailers and some wholesalers stayed away and did not opt for covering purchases at the rising prices.

Prices of IRRI and basmati types are rising for the last couple of weeks, notably after reports that that all the exportable surplus has been shipped against forward deals signed by the private sector. But recent reports regarding damage to new crop in some of the areas in the Sindh rice belt owing to flood and rain further accentuated the supply position and the consequent increase in prices.

The fresh price flare-up in some type of pulses was attributed to short supplies as importers continued to hold on their unsold stocks in an apparent effort to sell them at the higher prices. Some brokers said, the larger export of gram whole owing to a bumper crop early in the seasons, notably to India was the major contributor factor in price flare-up on the other counters, notably masoor and masoor dal and some others.

The interesting feature was that sugar prices were marked down by Rs50.00 per maund on mill selling followed by reports of larger unsold stock of 1.3 million held by the members of all Pakistan Sugar Mills Association seeking official help to set up buffer stock, market sources said.

After mid-week, there were more sellers than buyers and as a result, prices of some essential items fell from the early week higher levels under the lead of wheat which fell by Rs10.

In the pulses sector, masoor whole and dal came in for active selling at the fag-end of last week and were quoted lower by Rs200 per bag of 100 kg, while all other were held unchanged barring peas which fell by Rs325 on selling by a leading local importers and falling demand. Sugar after early fall, rose by Rs80 while gur and desi sugar were quoted lower by Rs200 each as demand was on the lower side of the weekly average.

Rice sector came in for strong support by some of the leading exporters. After a relative dullness for the last couple of weeks, fine basmati types including Kernal, which were quoted higher by Rs100 to 300 per bag. IRRI-6 was, however, an exception which came in for active selling at the higher levels and was marked down by Rs30,while IRRI-9 Sindh was traded higher by Rs100 per bag.

Cereal sector again lacked normal buying interest from the retailers because of delivery problems and were quoted unchanged under the lead of bajra, maize, jowar and barley.

Oilseeds followed them as major seed, notably cottonseed, rapeseed, castorseed and til were traded at the last levels as supply position was said to be fairly comfortable. Oilcakes followed them as prices of rapeseed and cottonseed cakes were firmly held unchanged at the previous levels amid slow activity.—M.A.