Wheat prices stable, rice costlier
WHEAT prices in domestic market remained stable ignoring a sharp increase in global prices on reports of reduced global availability of surplus wheat in 2012.
But prices of rice varieties were on the rise due to depleting stocks and delayed sowing. And the recent lifting of the minimum export price of basmati by India has increased competition for Pakistani exporters.
The United States Agriculture Department recently forecast a decline of seven million tonnes in global supplies of wheat for this year.
“The forecast has started impacting international prices and we may see an increase in average price of our own wheat exports,” said a Karachi-based commodity exporter.
“Plans to barter wheat for Iranian fertiliser or oil have run into snags and now around a million tonnes of wheat may be exported to other nations.
“Because of the timing we can get additional foreign exchange,” he said.
According to the Pakistan Bureau of Statistics, more than 400,000 tonnes of wheat was exported in eleven months of the last fiscal year at an average price of $307 per tonne.
Wheat price had already crossed $337 per tonne (as on July 5) in international markets and was expected to move further up. The reason is a nominal growth in production in China, India and Iran and an outright decline in the crop size in the European Union, Russia, Pakistan
and some other countries.
Bangladesh, traditionally a non-wheat producing country, is witnessing some growth in its output thereby containing its import requirement. Exporters say Pakistan’s exports of wheat to Bangladesh are now falling partly because of this and partly because of delays in
recent export payments.
On the other hand, a 50 per cent surge in Afghanistan’s wheat output this year has reduced smuggling of Pakistani wheat and wheat flour into Afghan cities. This is one of the reasons why domestic prices of wheat and its products are stable despite improved prospects of exports.
During the week ending July 6, the price of wheat remained unchanged at 2,580 per 100kg in Karachi.
“In last few weeks wheat price had rather come down from as high as 2,615 per 100kg mainly because official procurement of wheat was over now,” said a Jodia Bazaar-based dealer.
“Right now only flour mills are buying wheat and this buying too may ease off when they start getting allocated quotas of wheat out of recently procured wheat stocks by the Food Department.”
Owner of a famous brand of wheat flour said the price of wheat flour is also stable at 1,450 per 50kg bag and added that the prices were expected to decline in coming weeks.
“As Ramazan will begin after two weeks we don’t see much of demand for wheat flour. Demand may rise again at the end of Ramazan when wheat flour is required for preparing vermicelli, cakes, biscuits, wafers and other confectionary items to be sold in domestic and in export markets ahead of Eid,” he said.
Flour millers have even started reducing the price of low-quality wheat flour ahead of Ramazan and in view of the Sindh government’s decision to subsidise wheat flour prices during the holy month.
They, however, made it clear that by July 6 they had not been informed by the provincial government as to how much special subsidy they would get on officially supplied wheat to provide wheat flour to consumers at lower than the market rates.
Meanwhile, local prices of both coarse rice and basmati increased in the first week of this month as stocks of previous crop almost exhausted and sowing of new paddy crop got delayed. Another reason for the increase in rice prices was that monsoon rains were expected from the second week of this month.
Commodity dealers were worried over safety of whatever stocks of rice they were left with.
“The market is left with little stocks of the old rice crop and new arrivals are not expected anytime before October because of delayed sowing due to water shortage,” said a Karachi-based top rice dealer.
“Besides, in view of a tougher competition with India our exporters of basmati rice may try to balance rice exports mix by exporting more of non-basmati rice now.
“This means that local prices may remain high till the arrival of new crop.”
Wholesale prices of basmati of varying quality rose from Rs8,500-Rs10, 000 per 100kg in the last week of June to Rs8,700-Rs10, 000 per
100kg in the first week of July. Prices of non-basmati varieties of rice ranged between Rs4,700-Rs7,000 per 100kg, up from Rs4,500-Rs7,000, according to dealers in Jodia Bazaar.
As the government announced a Ramazan relief package of Rs2.5 billion for consumers that also involved sales of sugar and sugar-made products at subsidised rates through utility stores, wholesale prices of sugar fell slightly.
Dealers said minimum price of sugar slipped to Rs5,140 per 100kg in the week ended July 6 from Rs5,180 a week earlier. The maximum price, remained unchanged at Rs5,200 per 100kg.—Mohiuddin Aazim