AN agreement between Pakistan and Tajikistan in Islamabad during the week ending August 16 set the stage for export of 30,000 tonnes of sugar to Tajikistan below the market rate.

But it did not push the prices up in physical trading of the sweetener in Jodia Bazar because the state-run Trading Corporation of Pakistan, that would export the commodity, has right now enough sugar stocks purchased ahead of Ramazan .“

“As expected PMEX did reflect the uppish sentiment, however, and prices there inched up a bit both because of the trade agreement and because international prices remained strong,” according to a trader at Jodia Bazar.

Pakistan has agreed to sell sugar to Tajikistan at $20 dollar below the prevailing market rate (as on August 13)—at $528.25 per tonne to be precise—but a few issues including transportation route for the export of the commodity is yet to be decided.

Tajikistan is willing to import rice and corn also from Pakistan in due course of time as the central Asian state is keen on promoting bilateral trade relations.

Sugar dealers at Jodia Bazar said that whether the prices of the sweetener would remain unchanged even after Eid, thus completely ignoring news of exports to Tajikistan, depends on when exactly physical movement of sugar would begin. They say that since there is a huge buffer stock of 3.1 million tonnes any upward movement in prices would come in only if the export starts before November when most sugar mills would start sugarcane crushing in Sindh.

Commodity dealers say that availability of large sugar stocks and expected arrival of coarse rice crop by the next month continues to keep prices stable in Jodia Bazar of Karachi and Akbari Mandi of Lahore. But future contracts at PMEX are costlier because of higher food commodity prices in global market.

A Ghotki-based rice grower Majid Sanghar said, however, that rice output in Sindh this year might remain below expectation because of late sowing due to constraints in water supply.

A report of Sindh Agricultural Department said a few weeks earlier that at least one third of the total rice sowing had been affected because of water scarcity. But growers confirm that supply of Irri-6 would likely start sometimes in September adding that the supply of Basmati cannot start until late October or early November.

Wheat prices too moved up only in case of future contracts of PMEX and remained stable in Jodia Bazar despite the fact that the wheat exports still continue.

Traders say lower than usual consumption in Ramazan and availability of carryover stocks of wheat with the government agencies were the main reason for price stability thus far.

“Besides, we haven’t seen much activity on export front in last two weeks of Ramazan,” said a Jodia-Bazar based trader recalling that prices had risen in first two weeks of the month in line with global trend and on news of wheat-for-fertiliser barter deal with Iran.

The deal has further inched up closer to reality as Iran has managed to secure further concession in the price of wheat to be exported to Tehran. The process would begin after Eid with the arrival of an Iranian team that would inspect wheat stocks with PASSCO out of which up to one million tonnes would be exported to Iranian public sector.

One very important development in the commodity market is that corn exports have picked up pace, and according to corn traders, orders of about 100,000 tonnes of the commodity have been secured so far. They say that 50000 tonnes of corn has already been exported to Indonesia in July. Corn production in the US—the largest producer of this commodity—has been hit hard due to excessive heat wave sweeping across the Midwest region.

There are more than three dozen food commodities trading companies that deal in corn and maize in Pakistan and most of them have established b2b (business to business online) links.

An official of one of these companies told Dawn that this is the third consecutive marketing year in which Pakistan has made its presence felt as a supplier of good quality corn both for human consumption as well as for use as animal’s feed. “But as commodities prices have started rising on drought in the US, Brazil and Argentina etc. , the import of corn as animals’ feed is gradually declining,” he said.—Mohiuddin Aazim