AVAILABILITY of surplus stocks and lower-than-expected pre-Ramazan demand are keeping wholesale sugar prices stable in local market.
But dealers say prices may increase in coming days as the state-run Trading Corporation of Pakistan (TCP) has announced to buy up to 200,000 tons of it from sugar mills.
“Prices are stable mainly because the pre-Ramazan demand this year is not that high,” says Chairman of Karachi Wholesale Association Mr Anis Majid. “Demand should pick up with the arrival of Ramazan but how strong it would be would depend (among other factors) on how soon the monsoon rains start. We’ve noticed in the past that if Ramazan coincides with not-so-hot summer, demands doe not rise rapidly.” Official forecast for rain this monsoon is 15 per cent higher than in the last season.
Wholesale prices in Karachi’s Jodia Bazaar were seen unchanged around Rs5,100 per 100kg during the week ending on July 13. But in Lahore’s Akbari Mandi the closing prices inched up to Rs5140 and Rs5220 per 100kg from Rs5140-Rs5200 last week. Jodia Bazaar and Akbari Mandi rates serve as benchmarks for all other wholesale markets across Pakistan.
But sugar millers and exporters normally prefer to use prices quoted at the Akbar Mandi which has a larger base of local traders in almost all domestic food commodities. In a sharp contrast since Jodia Bazaar is the centre of most of commercial importers, dealers operating there quickly factor in their prices the prevailing trends in global markets.
Globally, sugar prices fell 14 per cent to 20.1 cents in six months to June but recovered partly in first two weeks of July. World output of sugar is projected to show a 4.6 per cent increase during the current marketing year ending in September. But latest reports suggest that two key producers India and Brazil may not produce as much as was thought earlier. That’s why raw sugar has risen again to 22.66 cents per pound (as on July 12) but is still below the December 2011 level of 23.42 cents per pound.
The reason why this uppish trend has been rather ignored by local commodity dealers is that sugar supplies from mills are steady due to a bumper sugarcane crop. “Because of sizable surplus stocks news about TCP sugar buying has also not driven up local prices in a big way,” says a Jodia-Bazaar based wholesaler.
Local output of sugar is estimated to rise to 5.2 million tonnes during this season (October 2011-September 2012) from 4.4 million tonnes last year and encouraged by the rise in output Pakistan has already exported more than 30,000 tonnes of the sweetener and plans to export more.
TCP Chairman Mr. Tahir Raza Naqvi said on July 13 that his organisation would buy 200,000 tonnes of the sweetener from local mills to boost stocks to just below 700,000 tonnes. The purpose is to keep prices stable during Ramazan and to sell sugar at subsidised rates to state-run Utility Stores during the holy month.
A Hyderabad-based sugar miller informed Dawn that the millers hoped to offload part of their stocks after finalisation of the TCP tender floated for sugar procurement. “I know a couple of millers who have participated in the tender but TCP has not finalised any offer so far,” he said adding sugar mills still have hundreds of tonnes of unsold sugar at their mills mainly due to higher production this year but also because of delayed beginning of sugarcane. A TCP official confirmed floating of a tender for sugar purchase and said “the process for procurement is on and we hope to meet the target of 200,000 tonnes before Ramazan.”
Meanwhile, imports of pulses and gram have increased ahead of Ramazan but dealers at Jodia Bazaar say wholesale prices have so far recorded only a modest rise.
Prices of Mash (washed pulses) remained unchanged at Rs10000-Rs12500 per 100 kg in Lahore’s Akbari Mandi during the week ending on July 13 and traders at Jodia Bazaar say that prices there were also stable around the same levels.
Price of gram pulse (thick), however, ramped up to Rs9700-Rs10000 per 100kg from Rs9600-Rs9800 a week earlier in anticipation of increase in demand during Ramazan.
“We are importing mash whole from Australia and gram from Myanmar and splitting of mash and gram into pulses has brought in some activity in the precincts of Jodia Bazaar,” according to a leading importer who said hundreds of temporary workers are busy in splitting, washing and grading of mash and gram pulses that are used widely in preparation of food specialties during Ramazan.
In eleven months to May 2012 imports of pulses of around 584,000 tonnes was only 0.7 per cent below the import volume in the year-ago period. Data for June imports are not officially out but importers say it would be higher than the average monthly import recorded between July 2011 and May 2012.—Mohiuddin Aazim