THE government decision to increase wheat support price to Rs1200 per 40kg was expected by commodity traders but it fell short of satisfying farmers.
After the announcement of the decision on November 22, wholesale wheat prices went up from Rs3100-Rs3150 per 100kg to Rs3250-Rs3300 per 100kg in Jodia Bazar , Karachi, but no major deal was reported at the new prices.
Farmers Association of Pakistan had demanded that the new support price be fixed at Rs1400 per 40kg—up from Rs1050 per 40kg set last season—keeping in view the increase in the prices of crop inputs like certified seeds, fertiliser and higher electricity, gas and fuel charges.
Commodity traders told Dawn that in anticipation of the government decision some dealers had stopped selling wheat in the open market. “I was trying to buy a few truckloads of wheat for a local flour mill but dealers were demanding Rs3300 per 100kg instead of Rs3100 or Rs3150,” said an approved buying agent of Pakistan Flour Mills Association. “When I finally agreed to buy wheat on Thursday I had no choice but to pay Rs3300 per 100kg,” he said.
Traders at Jodia Bazar said the stock of last year’s wheat was depleting and prices would have increased anyway by now because new wheat crop is still five months away. (Wheat harvesting begins in April in Sindh and in May in Punjab). “Prevailing wheat prices are dependent more on the size of the current stocks and intensity of the demand,” explained a Jodia Bazar-based trader adding that demand for the commodity had increased considerably with the arrival of winter.
Wheat prices have remained firm in the last few weeks owing to a declining trend in exports. In October Pakistan exported only about 11000 tonnes down from about 15000 tonnes in September. And total exports between July and October fell below 100,000 tonnes from more than 300,000 tonnes last year.
SUGAR FLAT: During the week ending November 23, sugar prices remained flat at Rs50 per kg in Jodia Bazar and at Rs51 per kg in Akbari Mandi of Lahore. Availability of an estimated carryover stock of about 800,000 tonnes and the beginning of cane crushing amid news of a bumper cane crop contributed in keeping prices under control. Traders say these two factors were strong enough to offset any upward pressure on prices after recent government decision to allow fresh exports of 400,000 tonnes of the sweetener.
“We knew this was going to happen but sugar stocks are huge. It’s not going to make any big change in price movements,” said sugar dealer Syed Sarfraz Ahmed, adding that there was no unusual export-led buying in recent weeks.
“Even after the permission of fresh exports, actual shipments may remain below the indicative target.
“In the international market, there is no big spike in demand for sugar. That’s why our sugar mills failed to consume full export quota of 400,000 tonnes allowed in two installments. I’m sure they won’t be able to exhaust new quotas any time soon.”
Delay in cane crushing both in Sindh and in Punjab due to a row over fixation of the support price had delayed wheat sowing in some parts of the region where wheat is grown. “It’s good that the government announced the twin measures (fixation of new wheat support price and permission for fresh exports of sugar) at the same time,” said Malik Sakhawat, a Punjab-based official of Farmers Association of Pakistan. “This would accelerate the process of wheat sowing where sowing was being delayed and this would also speed up sales of sugarcane to millers,” he told Dawn over telephone.
TEA PRICES UP: With the arrival of winter wholesale and retail tea prices of various varieties of black tea went up after mid-November. Not only the prices of loose tea rose by up to 10 per cent but manufacturers of famous brands of tea also withdrew the price cuts made earlier.
Tea traders at Jodia Bazar said black tea Danedar-BP 1 gained Rs65 per kg and was selling at Rs540 per kg against its pre-winter price of Rs475 per kg. Similarly black tea Leaf PF-1 gained Rs20 per kg and rose to Rs515 per kg against its last-quoted price of Rs495 per kg just two weeks ago.
Retail prices of packets of both of these varieties being sold under different brand names shot up to Rs560 per kg after the manufacturers withdrew the price-cut they had announced a few months ago. Similarly, family mixture tea of a famous brand became costlier as the tea blender that markets it started selling it again at Rs590 per kg after keeping its price at Rs540 for some time.
Pakistan Tea Association says tea prices have increased during this winter ( despite reduction in sales tax from 16 per cent to five per cent and lower incidence of smuggling to neighbouring Afghanistan ) because of higher international prices and depreciation in the rupee value. International prices of black tea are up primarily due to lower-than-expected production in Kenya from where Pakistan imports half of its total requirements.
Tea blenders and wholesalers have imported larger quantity of tea for winter. Imports of the commodity shot up to more than 13,700 tonnes in October from a little less than 9,800 tonnes in September.
Value-wise, overall imports during July-October crawled up to about 40,400 tonnes from about 39, 750 tonnes in the same period last year. —Mohiuddin Aazim