PHYSICAL activity on the Karachi wholesale markets last week was on the higher side of the weekly average as commercial dealers played on both sides of the fence adjusting stocks in their position before the annual closing.

Steep increase in prices of rice on reports of damage to standing crop in Sindh during winter rain, and higher export demand was the main feature of the week. Analysts feared that prices may rise to last year’s all-time high levels owing to production losses.

Other essential items under the lead of sugar and some others also rose followed by reports of fall in arrivals from upcountry markets and steeped up ready demand.

Ready off-take both on the industrial as well as commercial sectors was on the lower side as brokers adjusted positions and did not opt for fresh covering purchases.

How the commercial traders would resume their new year operations would largely depend on political background news and steady arrivals from upcountry trading centres, dealers said.

Some others said the activity might not get normal during the next week as brokers would not make bigger commitments during the holiday-curtailed week because of Muharram and mostly play safe.

The post-Muharram week was expected to be a normal trading week as by that time pent-up demand both from wholesalers and retailers would figure prominently and could push prices of some essentials further higher, they added.

During the week, prices of some essential items fell sharply in the absence of demand from any quarter under the lead of sugar and some others.

Steady arrivals both from official sources and commercial dealers kept wheat prices under pressure after several weeks of sustained increase, market sources said.

The decline in wheat prices had a chain impact on other essential items and sympathetic selling was witnessed on those counters under the lead of pulses, they said.

However, they failed to understand the relative weakness of the rice sector, which remained under pressure despite steady physical shipment of the commodity against forward sales.

After a relative lull during the last couple of weeks, shipments of rice were resumed as a rice loader remained stationed at the port throughout the last week loading the commodity, they added.

Private sector rice exporters said that owing to financial problems in major importing countries, exports are on the lower side of the annual figure but hoped that the New Year could be better.

The rice sector led the market advance under the lead of fine type basmati, which was quoted higher by Rs300-1,000 per bag followed by IRRI-6 and IRRI-9, which rose by Rs150-700 respectively.

Sugar followed them as arrivals from Sindh mills showed a sharp decline. As a result, prices of sugar were quoted higher by Rs220-240 per maund on strong local demand.

While gur showed sharp rise on strong demand, desi sugar did not show any change and was firmly held at previous levels amid slow ready off-take.

Other essential items were firmly held at previous levels barring wheat and masoor, which remained under pressure owing to active selling after the ready position showed a considerable improvement.

Wheat fell by Rs35 per bag, while masoor by Rs500, other types were traded at the last levels.

The cereal sector also showed firm trend as barley, guar, remained in active demand and ended higher but bajra and jowar were firmly held at the last level.

Cotton prices showed sharp rise after mid-week and rose by Rs175 per maund followed by reports of a short crop, while other major seeds including cottonseed, rapeseed, til and castor seed were traded at previous levels amid reports of active ready off-take.

Cottonseed oilcakes remained in strong demand followed by reports of short supply and rose by Rs50-60 per 50 kg, while rapeseed cakes were again held unchanged at the previous level.—M.A.