PHYSICAL activity on the Karachi wholesale markets last week was on the lower side of the weekly average as commercial dealers played on both sides of the fence adjusting and taking stock of their positions before the annual closing.

The holiday-shortened week, therefore, witnessed stray changes under the lead of wheat, pulses and sugar.

Last week’s increase in prices of rice on reports of damage to standing crop in Sindh due to winter rain and higher exports was the notable feature of the last two weeks. Analysts fear that rice prices may again rise to last year’s levels owing to production losses.

Prices of other essential items also rose under the lead of sugar, wheat, masoor whole and dal followed by reports of decline in arrivals from upcountry markets and steeped up ready demand.

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

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

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

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

But during the week, prices of some essential items rose sharply on revival of demand from the leading brokers under the lead of sugar and some others.

Market sources said steady arrivals both from official sources and commercial dealers, did not push wheat prices lower despite several weeks of sustained increase. The net rise over the week was of the order of Rs100 per bag.

The increase in wheat price had chain impact on other essential items and sympathetic rise was witnessed on those counters under the lead of pulses, they said.

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

After a relative lull during the last couple of weeks, shipment of rice was resumed as a rice loader remained in the port throughout last week loading the commodity, they added.

According to private sector rice exporters owing to financial problems in the major importing countries, exports are on the lower side of the annual figure but hoped it would improve.

Pulses sector led the market advance under the lead of masoor whole and dal, which were quoted higher by Rs200-500 per bag, while IRRI-6 and IRRI-9, basmati kernel and sela were held unchanged at previous levels.

Sugar followed them as arrivals from Sindh mills showed a sharp decline. As a result, price of white sugar was quoted higher by Rs80-100 per maund on strong local demand.

Gur, meanwhile, 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 masoor, which remained in active demand. Wheat rose by Rs100 per bag, masoor by Rs500 while other types were traded at last levels.

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

Cotton prices showed a modest fall after mid-week and fell by Rs50 per maund followed by reports of a short crop, while other major seeds including cottonseed, rapeseed, til and castor seed were traded at previous level amid reports of active ready off-take.

Cottonseed oilcakes remained in strong demand followed by reports of short supply and rose by Rs10-30 per 50 kg, while rapeseed cakes were again held unchanged at previous level. —M.A.