Prices of wheat rose further in January, keeping up months’ long trend, due to falling and mismanaged supplies. Consequently, wheat flour became costlier, pushing up prices of breads, buns and rusks.

Prices of wheat in international market declined gradually, from an average of $325 per tonne in October to $292 per tonne in December, but imports into Pakistan fell recently, aggravating the grain’s shortage and fuelling its prices. Imports in December declined to 11,000 tonnes from 61000 tonnes in November. Importers say imports in January also remained low but exact stats are yet to pour in.

In 2013, production of 24.3 million tonnes, down from about 25 million tonnes a year earlier, necessitated imports (377,000 tonnes were imported during July-December).

Wheat traders link the slowdown in imports in December to accelerated supplies of subsidised wheat from provincial food departments after these departments found that mismanagement was more to blame for short releases rather than shrinking stocks. Sindh Food department even took action against its officials.

“But open market inventories are depleting on usual higher demand in winter and on unchecked smuggling,” a Karachi-based trader told Dawn, citing it as a reason for price hike.

Prices of Basmati rice also increased in January even though harvesting of the new crop that began in November kept the supplies strong. A recent SUPARCO report says no less than seven million tonnes of rice (both Basmati and coarse variety) has been produced this year. But recovery in Basmati exports from December and higher domestic demand are keeping the prices up, dealers say. In December 2013, exports of Basmati almost doubled to 45,000 tonnes from 23,000 tonnes in November—and even exceeded the December 2012 shipments of 38,000 tonnes.

Besides, in continuation of the last year’s trend “packers of branded rice and chains of super stores pounced on the new year’s Basmati grains immediately after their arrival in late November and December. That also sent prices up,” says another Karachi-based dealer.

But some dealers say that prices of coarse rice varieties have showed no big rise in January, despite larger exports, for the market has enough carryover stocks and urban demand for non-Basmati grains remains subdued. Coarse rice exports also doubled to 308,000 tonnes in December 2013 from 154,000 tonnes in November, surpassing December 2012’s exports of 292,000 tonnes.

In January, prices of pulses also maintained an upward trend both because of insufficient local supplies and higher international prices on concerns of production in Canada, the largest producer of pulses. The biggest increase was seen in prices of Moong and Mash whereas Gram pulse recorded only a modest increase, and that too not on short supplies “but in sympathy with overall inflationary trends,” says a local wholesaler.

Huge gram harvest in the last cropping season reduced overall imports of pulses from 253,000 tonnes in July-December 2012 to 200,000 tonnes in July-December 2013.

But traders say imports of Moong, Masoor, Mash and some other pulses (except gram) are now rising. That explains an increase in imports to 35,000 tonnes in December 2013, from 21,000 tonnes, beating even December 2012’s imports of less than 28,000 tonnes.

Sugar prices remained flat in January as cane crushing continued throughout the country. Besides, international prices also kept falling on reports of larger outputs in some countries including Brazil and India.

Sugar dealers say, however, that as Trading Corporation of Pakistan has got the government’s approval to buy 75,000 tonnes sugar in February followed by 50,000 tonnes per month in coming months, a slight increase in prices could be seen next month. TCP purchased half a million tonnes of sugar in 2013 and under the new buying schedule it would end up buying another half a million tonnes or so, according to TCP sources.

Industry sources say that some millers in Sindh and Punjab, in connivance with big dealers have already resorted to slower release of sugar stocks from mills to move the prices upwards in coming months. But a leading sugar miller in Sindh clarified that in recent weeks, frequent CNG rationing was the main reason behind delayed lifting of already purchased sugar stocks from mills.

He said that declining trend in average international sugar prices (down 5.7 per cent and 7.5 per cent respectively in November and December ) along with higher estimated domestic output of the sweetener should keep local prices from rising. Pakistan is set to produce over five million tonnes of sugar this year, up from 4.7 million tonnes in the last year.

Prices of tea inched up further in January keeping up the trend that set in with the eve of chilly weather. Officials of Pakistan Tea Association say prices of loose tea are climbing up not only in line with rising prices in Bangladesh and Sri Lanka but also due to an overall increase in the cost of domestic trade. Packers of branded tea had hiked prices back in November-December.—Mohiuddin Aazim