A FRESH flare-up in wheat prices on the Karachi wholesale commodity markets last week highlighted the trading where other essential items showed softening trend after improvement in supply position.

The heartening feature was that after several weeks’ sustained increase, the rice sector showed sharp fall as prices of both IRRI and basmati types were quoted lower after a relative lull on the export front after the fixation of minimum export prices of various types, floor brokers said.

Market sources could not pinpoint any specific reason behind the record rise in wheat prices however, some said the commodity had again undergone a speculative ‘squeeze’ as some affluent investors had tried to corner the floating stock.

“There appears to be no immediate reason behind the increase in wheat prices except the fact that the recently harvested wheat crop is said to be slightly below the target at 22 million tones,” they said.

The sudden jump of Rs400 to Rs415 per bag of wheat to a record Rs2,200 per bag just in a week indicated that the talk of a stable price for general consumers appeared to be overshadowed by hoarders’ network, some brokers said.

The hike came in the backdrop of fresh import of the commodity during the couple of weeks to supplement the already imported stock of half a million tones together with the local officially procured stocks, they said.

Indications were there that some other essential items, which had shown sign of softening during the week, might rise again in sympathy.

Early in the week some types of rice and pulses had fallen from peak levels partly to an improvement in supplies and partly to fall in demand by general consumers, they added.

Some others attributed the fall in prices of basmati types to slack export demand at higher levels and partly to absence of retailers who preferred to keep to sidelines rather than chasing prices further higher.

Unlike previous weeks, pulses, mainly imported, did not show any rise and remained stable around last levels. Gram whole and gram dal were marked down on selling by local stockists followed by reports of problems on export front, they said.

Among major oilseeds, prices of cottonseed showed sharp rise on active local demand and reports of short supply, while other major seeds were held unchanged.

Cotton, however, showed fresh increase owing to short supply in the backdrop of just harvested lower crop, and rose to an all-time high of Rs4,000 per maund in official dealings on the ready market.

The market decline was led by the rice sector as prices of IRRI and basmati varieties were quoted lower by Rs200 to Rs400 per bag but the largest decline of Rs300 to Rs900 was noted in Basmati. Sela type was, however, an exception owing to fall in ready demand and was firmly held at the last levels, while brokers said prices of other types could fall further in coming weeks followed by absence of exporters.

Among other essential items, pulses both local and imported showed sharp fall as supply position improved modestly. Peas, gram whole and gram dal were quoted lower by Rs100 to Rs250 per bag on active selling.

On the other hand, imported masoor, masoor dal,urad and moong were traded at the last levels for want of fresh consumer demand at the still higher levels.

For another week in a row, sugar prices rose by Rs200 per bag on reports of slow arrivals from mills and gur and desi sugar also increased by Rs100 in sympathy.

Cotton prices rose further high by Rs200 per maund owing to pressure on ready supply and increase in demand by spinners and mills.

Major oilseeds including cottonseed, rapeseed and castor seed did not show much change as supplies matched the local demand owing to steady arrivals from upcountry markets. Til was an exception, which came in for renewed selling partly because of a considerable decline in the export demand and partly to fresh arrivals from upcountry markets.

Cereal sector also ruled dull in the absence of fresh buying orders from retailers. As a result, prices of maize, bajra, barley and guar seeds were held unchanged at last levels.

Oilcakes ruled unchanged for rapeseed cakes, while cottonseed cakes suffered a modest fall of Rs25 on selling prompted by reports of fresh arrivals from the interior.—M.A.