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Brisk trading pushes prices up

October 14, 2012


Commodities market became livelier during the week ending on October 12 with formal launching of sales of sacrificial animals as men, women and children watched with enthusiasm ‘cattle walk’ on decorated ramps at Mawaishi Mandi, a temporary market of sacrificial animals off Super Highway.

As 88-kg heavy he-goat and 1425kg magnificent bull lured the watchers, animal sellers readied themselves for securing the best price for their animals. But alongside, they also struck deals with commodities traders for ensuring supply of wheat, maize, gram, jowar (sorghum/milo) and gram flour. Retailer shopkeepers across the city also made additional pre-Baqra Eid buying of these and other food items including pulses and spices. The prices moved northwards.

Prices of Chakki atta (or wheat flour produced at small grinding mills and containing a higher percentage of bran) rose to Rs400 per 10kg registering a big increase of Rs3-4 per kg within a week. Chakki owners said they had to raise the price because Sindh Food Department was not releasing their quotas of subsidised wheat and they had to buy wheat from the open market at no less than Rs3050 per 100kg.

Ongoing exports of wheat and additional demand by Tandoorwalas ( bread makers) are believed to have been responsible for the recent price hike.

“Little do people realise that thousands of rural people including animal sellers along with working hands of all kinds, people engaged in allied businesses like fodder sellers, transporters, temporary daily-wage workers even large armies of beggars enter Karachi ahead of Baqra-Eid,” said a Karachi-based flour miller. “Roti (tandoor-baked bread) is their main food item. You can realise how much impact it has on wheat demand and on wheat prices.”

Quite expectedly, prices of vegetable oil and ghee also increased during the week under review in anticipation of an increase in their demand after Baqra Eid when people make meat-based dishes. Farooq Memon, advisor of Karachi’s Retailer Grocers Association said that the per kg retail price of vegetable oil and ghee rose by Rs4 and Rs2 respectively—from Rs154 to Rs158 and from Rs154 to Rs156.

In the wholesale market prices of 16-kg containers of vegetable oil and ghee also increased accordingly, by Rs95 per container—from Rs1690 to Rs1785. Increase in international prices of palmolein (which also reflected in daily quotes at Pakistan Mercantile Exchange Ltd during the week under review) has been at the heart of the higher cooking oil and vegetable ghee prices.

But traders said that in addition to increased demand from retailers, increase in transportation cost of cooking oil tankers carrying the cargo from mills to markets was also responsible for the price hike. Transportation charges of all kinds of food and non-food commodities move up in what can be termed as the boom effect in hauling business due to engagement of commercial vehicles in transportation of sacrificial animals from cattle breeding areas to cities and from the market to buyers’ places.

Whereas brisk activity was seen in trading of food commodities in Jodia Bazar and other markets in the city with prices of high-demand items moving up, thousands of meat sellers were readying themselves for a shift in business dynamics. “Meat selling remains suspended for at least ten days after the Baqra Eid is over,” said an official of Karachi’s Meat Merchants Association.

“For us these ten days provide perfect recess after slaughtering tens of thousands of sacrificial animals and after making big money in this process. But now, most of us, particularly wealthier ones are more busy in trading of sacrificial animals than in securing supplies of meat from wholesale market for retailing.”

Far from the maddening crowd involved in the trade of sacrificial animals in one way or the other, fishermen were also making moves to brave the lull in business immediately before and after the three-day Baqra Eid. “Fish selling almost stops a week before Baqra Eid and doesn’t recommence before two weeks after the Baqra Eid, Such is our trade,” said Rohan, a young fish seller at Moosa Colony, a big retail fish market in Karachi.

Poultry meat sellers also face a similar situation. They too face a big drop in sales as eateries either remain closed several days after Eid holidays or they see a big decline in the number of visitors.

If we piece together, these and similar activities, or lack of them, of different segments of commodities’ market, a bigger picture emerges of interconnectivity of local and seasonal trade and of interdependence of rural-urban markets.

If, arrival of sacrificial animals stirs activities in commodities market in Karachi, back in cattle farming areas in rural Sindh and Punjab, dispatch of the animals to Karachi also entails a lot of activities.

Those who rear sacrificial animals for at least up to two years in case of cows and their calves and for at least six months in case of sheep and goats, feel rewarded when trucks arrive in their areas to lift the animals for transporting them to Karachi where, according to conservative estimates, an estimated one million sacrificial animals are slaughtered on every Baqra-Eid. In-charge of Karachi’s Mawaishi Mandi Noman Ahmed says “These animals are seen off by village kids in their own simplistic and innocent ways. But for their elders, the departure of animals towards cities means income. The activity generates a variety of jobs ranging from caretakers of animals to those who get involved in transportation of animals and fodders from villages to cities.”

Changes in commodities market dynamics during and after Baqra-Eid bring about key changes in the income levels of various segments of the market.

Attaching some price tags to the sets of activities of one segment or the other is essential for documentation of Sindh economy and, perhaps, for analyzsng the benefits of seasonal interaction of the rural-urban market participants.—Mohiuddin Aazim