TRADING activity on the Karachi wholesale commodity markets last week was relatively slow as consumers did not make panic buying on any of the essentials’ counters hoping a fall in prices.

As a result, prices of some essential items fell sharply under the lead of rice. All varieties of rice including IRRI and basmati were marked down by Rs100 to Rs400 per bag of 100kg also as rice stockists cleared the backlog of their stocks ahead of the arrival of the new crop expected by the end of this month, dealers said.

Arrivals from upcountry markets fluctuated showing steady increase and some time falling apparently in line with the prevailing prices on the wholesale markets, market sources said.

However, unlike the previous year price changes on both sides were orderly and did not reflect panic buying at any counters as supply gaps here and there was steadily filled in, they said.

The notable feature of the week was that physical shipment of rice resumed after a break of couple of months, notably after the fixation of minimum export prices to ease unprecedented price hike in local markets.

A rice loader at the port during the week sailed out with a load of 15,000 tons of the commodity to the Gulf. However, the resumption of exports did not have any bullish impact on local prices, floor brokers said.

Both local exporters and commercial traders are awaiting the arrival of new crop, mainly from the Sindh rice belt by the end of this month or early next month.

According to initial reports, despite shortage of irrigation water, the country this year again is on the threshold of harvesting a bumper crop (about 6m tons).

But how would the larger than expected crop influence the local prices of rice varieties is yet to be observed? Rice price had attained an unprecedented level during the last season and is still ruling on the higher side as compared to previous years.

No one could think some years back that price of IRRI and fine types could touch the all-time high mark of Rs60 and Rs110 per kilo, market sources said adding “the expected bumper crop should push prices to normal levels.

Sugar output from the last season, which ended on May 31, could also be a record year in terms of total production as the figure has already touched the high mark of about five million tones as compared to previous couple of years’ total production of four million tones plus, they said.

Prices of sugar should have fallen below Rs30 per kilo if 0.4m tones of the commodity had not been exported to Afghanistan and other countries some months back, they added.

However, there was no change on the wheat front as despite about half million tones of import during the last couple of months, price situation did not ease and remained on the higher side.

The market decline was led by the rice sector under the lead of IRRI-9, which suffered the largest decline of Rs300 to Rs400 followed by basmati, which fell by Rs200 to Rs300 per bag; IRRI-6 also fell by Rs100.

Fine types including kernel varieties, however, did not show any change in the absence of demand and were quoted unchanged at previous levels.

But sela type fell by Rs200 per bag.

Wheat and sugar among essentials were exceptions, which were quoted further higher by Rs40 each on apparently pre-Ramazan buying support from retailers.

On the other hand, gram powder (Basan), peas and masoor whole showed a fall ranging from Rs50 to Rs100 on selling followed by reports of fresh imports.

Among cereals, bajra came in for active selling followed by reports of steady arrivals from upcountry and fell by Rs200 per bag, while maize, jowar and barley were held unchanged at the previous levels.

On the oilseed counter, prices of rapeseed suffered sharp fall ranging from Rs75 to Rs160 per 40 kg so did til which fell by Rs300 to Rs400 per 40 kg on slack export demand.

Other major seeds including cottonseed, and castor seed were traded at previous levels amid active two-way deals owing to fall in crushers’ demand.

Meanwhile, cotton showed a fresh increase of Rs100 per 40 kg on reports of a short crop owing to pest attack in some areas. Oilcakes, on the other hand, remained under pressure in sympathy with the oilseeds and fell by Rs25 to Rs40 for both rapeseed and cottonseed cakes respectively.—M.A.