Prices of some varieties of essential items showed modest decline on the Karachi wholesale markets last week on selling by the commercial houses followed by reports of steady arrivals from the upcountry centres.
Sugar was, however, an exception, which posted sharp rise of Rs50 to Rs120 per bag followed by reports that the government will buy 0.2m tons of the commodity to build a buffer stock to regulate prices at the consumers end. Ramazan buying and fears of delay in th new crushing season were other supporting positive factors.
But on the other hand industrial raw materials stayed firm amid active demand from the users and reports of pressure on supplies owing to fall in arrivals from the interior markets.
Dealers said with the exception of sugar, which turned bullish after holding on to the previous levels amid hopes that the government will soon purchase 0.2m tons of the commodity to build up a buffer stock.
The proposed sugar buffer stock will serve the twin purpose. On the one hand it will regulate open market prices to keep them stable at a reasonable level and will bail out the mills from the negative fallout of the production glut and larger unsold stocks on the other, they said.
Meanwhile, reports coming from the crushers tell that they have linked the new crushing season with the lifting of the agreed quantity of the commodity by the government.
However, indications are that they may not resume the new season crushing by Nov 1, as directed by the government.
Unlike the previous week, wheat prices fell by Rs10, while gur rose by Rs150 to Rs600 per 40 kg on strong demand from the local commercial exporters. Desi sugar remained pegged at the last levels.
They said it was interesting to note that the essential items did not show increase in sympathy with cotton, both phutti and lint whose prices have touched all-time peak level during the current season followed by reports of a short crop.
Never before in the Pakistan history, prices of phutti and lint cotton had touched the high mark of Rs1,650 per 40 kg and Rs3,600 for lint without 15 per cent sales tax.
The market decline was led by the pulses sector because of oversupply. Larger import of masoor and tuver may be one of the reasons but the chief reason is a bumper crop of gram, which dominate consumer consumption pattern and is widely used for more than one purposes. Its surplus and easy availability has negative impact on other type and the consequent fall.
Pakistan has exported a substantial quantity of the gram to India and some other countries to dispose of the surplus after meeting home demand.
On the pulses counter, moong, peas, gram and beetle prices fell by Rs10 to Rs50 the biggest fall of Rs50 to Rs150 being in masoor dal, while gram whole and all other varieties were traded at the previous levels.
Rice sector on the other hand showed mixed trend amid active trading followed by reports of steady new crop arrivals from the Sindh markets.
Basmati and IRRI broken came in for modest support and rose by Rs10 to Rs50, while sela type fell sharply lower by Rs200 followed by reports of steady new crop arrivals and the consequent selling. All other types were held unchanged.
Cereals showed steady trend as prices of bajra were quoted higher by Rs10 to Rs40, while maize was firmly held at the last levels. Barley followed them in the absence of export demand.
Jowar on the other hand came in for active selling followed by reports of large new crop arrivals from the Sindh markets and was marked down sharply by Rs125 to Rs500 per bag.
Oilseed sector stayed firm followed by reports of fall in arrivals. Rapeseed posted fresh gain of Rs15, while castorseed and til were marked higher by Rs25 to Rs50 on active foreign demand.
Oilcakes were firmly held at the last levels for rapeseed cakes, while cottonseed cakes posted sharp rise of Rs20 on reports of lower cotton crop and fears of pressure on ready supplies.—M.A