AFTER several weeks of sustained run-up, prices of most of the essential items on the Karachi wholesale market last week virtually crashed from the recent all-time highs on panic selling by stockists and hoarders owing to liquidity crunch amid market talk of fresh erosions.

The largest single-week fall of Rs700-1,000 per bag of 100kg was recorded in rice prices both IRRI and basmati types, followed by pulses and some cereals as selling dominated trading all through the week in the absence of demand even at the falling prices, dealers said.

Prices of both rice and pulses fell as they had increased a couple of months back amid report of pressure on local supplies owing to various reasons, they said.

Floor brokers said there was no immediate reason behind the reversal but they believed that fall in general consumers’ demand and steady arrivals from upcountry trading centres over the week might be one of the reasons.

The decline was led by rice sector despite resumption of its physical shipments against forward deals and reports of higher forward sales, they said. The main reason behind the fall in prices of both IRRI-6 and basmati types appears to be reports of another bumper crop of well over six million tones as compared to previous year’s 5.5 million tones, they added. Steady arrivals of new crop, mainly from the Sindh rice belt, continued to inspire fresh selling from local dealers who were not inclined to hold long positions until the actual size of the crop was known, they said.

Owing to the prevailing financial crisis in the major trading centres and the currency factor, private sector exporters were also not inclined to build-up long positions against their forward sales amid fears of fresh fall in prices on local selling.

But private sector exporters were not inclined to give their forward sales projections, which, they said, could push prices again higher in the coming weeks.

Wheat followed the fall as its prices eased from the current higher levels owing to larger imports of well over two million tones during the last two months. The interesting feature was that four ships were at the port to unload the consignment while some others were unloading their consignment. Sugar prices remained stable around the previous week’s level followed by reports that new crushing season would start from Nov 10, indicating that new crop from the mills would reach the market by the end of the current month.

Prices of both IRRI and basmati varieties were marked down by Rs700-1,000 per bag. IRRI-9 and IRRI-6 were quoted lower by Rs175-70. Broken basmati, on the other hand, fell by Rs200-300 per bag. Pulses followed them and remained under pressure after mid-week and were marked down by Rs800-1,000 per bag, major fall being in masoor and gram varieties. After an early fall sugar prices were quoted higher by Rs50 after last week’s dull conditions. But on the other hand wheat was marked down by Rs25 per bag.

Cereal sector also followed the general trend on active selling as prices of maize and guar fell by Rs50-150 but the largest decline was noted in bajra, which fell by Rs500 per bag after selling prompted by steady new crop arrivals from Sindh.

Barley and jowar, on the other hand, did not show any change as supplies matched the local demand and both were held unchanged at the last levels.

Major oilseeds, mainly cottonseed, came in for active support and were quoted higher by Rs75 per 40 kg, while rapeseed was traded at the last levels.

Castor seed lacked normal support from the crushers and exporters and fell by Rs100-150 but til was firmly held at the previous levels followed by reports of revival of export demand.

Oilcakes, both cottonseed and rapeseed managed to finish unchanged amid active trading based on easy ready market.

—M.A.