PRICES of some essential commodities last week showed fresh increase under the lead of major export items followed by reports of larger physical shipments against forward deals to meet the deadlines.

“The recent two per cent increase in the discount rate to 15 per cent from the previous 13 per cent is one of the factors behind the renewed price flare-up,” said a leading commodity dealer Haji Suleman.

Arrival of fresh harvested rice was maintained on higher side for the second week in a row but bulk of it was cornered by both the private sector exporters and local dealers on the perception that the prices could touch the previous season’s all-time peak levels.

Market sources said a big chunk of the bumper crop my again be bought by commodity traders to push prices further higher in coming months.

They anticipate that any future price flare-up on the rice sector could have sympathetic bullish impact on other essential items, mainly wheat and pulses in the coming months.

They said major price hike were noted in export commodities under the lead of IRRI-type rice, which was quoted higher under the lead of IRRI-9, which soared between Rs1,000-1,300 per bag of 100kg on strong covering purchases by private sector exporters. But later selling pushed them around previous levels.

IRRI-6 and broken basmati were next for identical reasons and market sources said prices could rise further owing to larger export orders.

Market sources said entry of China in the rice import trade appeared to be a decisive factor behind the current price flare-up, and pressure on local supplies as some of the leading upcountry dealers had slowed down their shipments to local market to share the price windfall with the exporters and local stockists.

However, there was a relative calm on the fine rice varieties apparently for want of fresh export orders. The activity is likely to pick up on this counter after importers from Saudi Arabia start their operations to buy a million ton of higher variety basmati, they added.

Among other essentials wheat was leading, which maintained its upward drive for the second week in a row despite imports of well over two million tons to keep prices lower, some others said.

But selling at the weekend again pushed it lower by Rs75 per bag of 100kg. A considerable fall in mill demand was another factor behind.

In the pulses sector both masoor whole and dal remained under pressure on selling by some importers and fell by Rs390 to Rs500 per bag but other types including gram, urad and moong were held unchanged. Beetle was an exception, which was quoted higher by Rs100.

Sugar came in for renewed selling as stockists remained active amid fears of fresh decline after new crop arrivals from Sindh mills. It fell by Rs50 per bag. But gur posted a fresh increase of Rs100-200 per bag.

The cereal sector showed an easy trend as prices of bajra fell further by Rs150-200 per bag, while maize, jowar and guar seeds were held unchanged amid slow trading.

The oilseed sector showed an easy trend under the lead of rapeseed which suffered fall between Rs150-200 per bag on selling triggered by reports of new crop arrivals and weak oil and cakes markets. Dadu type was, however, an exception, which rose by Rs25-50.

Cottonseed, on selling prompted by steady arrivals from ginneries, were quoted lower by Rs25-55 per 40 kg. Other major oilseeds, including castor seed and til lacked export demand and were marked down by Rs100-500 per maund.

Oilcakes followed the lead of oilseeds and fell by Rs15 for rapeseed cakes, while cottonseed cakes were held unchanged.

—M.A.