THE price of pulses kept on increasing on the Karachi Wholesale commodity markets, last week. Brokers said that it would ease from the current all-time peak levels as a cut in the withholding tax (WT) has been announced.

The imported stuff has soared by Rs6 to 10 per kg owing to the pressure on ready supplies and the reported holding back of stocks by some leading importers.

However, the market sources expect a fall in the prices following a four per cent i.e., from 6pc to 2pc cut in the withholding tax by the government to restore sanity in one of the essential items.

But some others fear that the supply and demand factors seldom work in our typical market conditions. Prices once sharpened hardly fall owing to the holding capacity of our stockists.

For example sugar prices did not fall but rose further despite the import of about 0.350 million tons of the commodity and an identical amount released by the Trading Corporation of Pakistan (TCP), they said.

The next couple of weeks will tell how much the WT cut will affect the prices as the flare-up was confined to the imported stuff, notably masoor, including from India, they said.

Market sources said barring gram whole and gram dal which remained unchanged due to a bumper crop, others maintained higher levels for the second week in a row.

It will depend on the release of stocks by the importers during next week. But it is too early to expect a sharp decline despite a relief in taxes.

For the last couple of years, the import of pulses is duty-free as the government intends to ensure adequate and economical supplies to consumers, brokers said adding that the sudden price augmentations invite official intervention.

It was interesting that the upsurge in pulses did not go to other essential items which remained stable around previous levels, notably sugar, wheat and rice, they said.

The market was led by the pulses sector under the lead of imported type of masoor dal which rose by Rs350 to 400 per bag followed by tuver up Rs200 to 413 per bag as pressure on supplies caused this eruption, dealers said.

Among other types, urad rose by Rs50, while gram dal, gram whole and beetle were firmly held at last levels amid slow trading and steady arrivals from the upcountry markets.

Dealers however, predicted a modest fall during next week in response to the tax cut. But others said importers may not allow further fall and may hold back the stocks for higher rates.

After early fall, wheat escalated by Rs5 amid conflicting reports of supply and demand. Sugar, on the other hand, remained pegged at the last levels despite reports of the TCP to float an import tender for 0.1 million tons.

Silence prevailed on the rice sector where exports seemed to have dried up in the absence of fresh import orders and decreasing stock of the old crop. As a result, no rice loader arrived over the week to load the commodity.

Sowing of the new crop is almost complete in major growing areas and the new crop is expected to arrive sometimes late in September or early October, market sources said.

Cereals were firmly held at last levels as local supplies matched the demand and as a result prices of jowar, bajra and barley were held unchanged. But Maize came in for active selling followed by the reports of steady arrivals and fell by Rs50.

Guar among major industrial raw materials rose by Rs25 as the leading stockists held back stocks, while others were traded at previous rates.

Oilseed sector lacked normal trading interest as prices of major seeds including the cottonseed, rapeseed, castorseed were firmly held at last levels.

But til was an exception which fell by Rs75 on selling prompted by the reports of steady new crop arrivals and slack export business.

But on the other hand oilcakes stayed easy as prices of both rapeseed and cottonseed were traded lower by Re1 to Rs10 on renewed selling owing to a weak oil market.—M.A.