The Karachi wholesale commodity markets showed orderly price changes in the pre-budget session last week as supply position remained fairly comfortable, thanks to the steady arrivals from the upcountry trading centres.
But at the weekend session, some essential commodities showed sharp rise under the lead of pulses and rice apparently on pre-budget speculative buying by general consumers and commercial houses.
As most of the essential items are expected to enjoy the duty exemptions in the new budget the market trend was generally guided by the supply and demand factors rather than speculative buying, dealers said.
However, prices of some of the essential items may rise during the next couple weeks owing to indirect impact of taxes imposed on the other sectors including inputs,they added.
Major export commodities including rice, wheat and sugar are expected to get the needed impetus on the export front followed by some concessions in the new budget but it will take sometime as exporters will have to go through the new fiscal measures, says a commodity dealer.
During the last couple of weeks, exports of both wheat and rice have slowed down because of various factors including higher local prices and in some cases, pressure on ready supplies, he added.
There is a sizable of sugar but owing to higher production costs local prices are said to be uncompetitive,which have forestalled the exports. However steps are being taken to sell about 0.150 tonnes of the commodity to Afghanistan and if the contract is signed between millers and the Afghan importers, it could well prove a bail-out package for the industry, market sources said.
The sources said that another contributory factor which kept prices of essential items around the previous levels was the reports of steady inflow of commodities, both from the commercial houses and the stockists as was reflected in their easy availability, notably during the post-budget trading. There were no reports of pre-budget hoarding from any quarter.
The market advance was led by the rice sector as prices of IRRI and basmati varieties showed sharp increase partly on reports of revival of export demand and partly to pressure on ready supplies. While IRRI varieties posted gains ranging from Rs25 to 95 per bag of 100 kg. Basmati and its kernal variety tended higher by Rs50 to 100 followed by reports of fresh import orders from the Gulf buyers.
Pulses followed them and rose by Rs20 to 55 per bag for peas,gram whole and gram dal, while all other varieties were traded at the previous levels as supplies matched the demand. Masoor dal was an exception which fell by Rs50 on selling.
Sugar on the other hand remained under pressure owing to lack of demand and larger unsold stock falling by Rs20 per bag. Gur on the other hand rose by Rs50.
Among the cereals, maize posted a fresh rise of Rs20 to 70 while jowar was marked down by Rs10 in the absence of local demand. Bajra and guar followed them as both lacked normal demand from the local traders.
Oilseed sector showed firm trend as prices generally tended higher where changed amid active trading. Rapeseed led the rise, rising by Rs40 on active buying triggered by reports of firm oil and cakes markets. Cottonseed was again not quoted owing to short supply.
Other major seeds including castorseed and til also showed firm trend followed by reports of revival of export demand and were quoted higher by Rs25 to 45 per 40 kg.
Oilcakes also showed steady trend in sympathy with firm seed markets and posted gains ranging from Rs2 to 5 for both rapeseed and cottonseed cakes amid active trading.—M.A