PRICES of most of the essential items on the Karachi wholesale commodity markets last week witnessed a renewed price flare-up and rose to higher levels, but ready off-take was light as consumers were not inclined to chase prices further high.

Rice sector showed an unprecedented price hike amid reports of short supply in the backdrop of reported hoarding by some stockists and higher exports. Prices of basmati and IRRI types were quoted higher by Rs100 to Rs400 per 100 kg bag, while fine types did not change much. An increase of Rs115 per 40kg in the procurement price of wheat had a sympathetic bullish impact on some essential items and floor brokers feared a fresh speculative rise in coming weeks. Wheat prices were quoted higher by Rs95 to Rs160 per bag of 100 kg.

The growers had been protesting against the procurement price fixed by the caretakers at Rs510 per 40 kg saying it was too low when compared with the increase in prices of inputs such as fertiliser and power etc. On the open market wheat prices were quoted higher by Rs180 to Rs190 per 100kg bag.

Official thinking behind the increase appeared to be the perception that prices would come down after the new crop harvesting is completed by early next month, and bulk of it arrived on the open markets, market sources said.

Moreover, a buffer stock of half a million tons of imported wheat is in reserve and could be released if prices on the wholesale or retail levels showed fresh increase, they added.

An interesting feature of the wheat trade is that owing to liberal bank credit lines, speculative traders have entered into the field and bought bulk of the surplus stock of the new crop at much higher prices direct from the growers, said a leading broker.

Barring gram whole and gram dal, which did not show much change owing to steady arrival of new crop from upcountry, market prices of other essential items rose under the lead of imported pluses.

Sugar, following reports that sugar smuggled from Indian was finding its way into local markets at much lower rates, kept its prices at the previous levels. According to market sources Indian sugar exporters had dumped the commodity in Afghanistan, part of which was being smuggled here.

There was a relative calm on major exports sector under the lead of rice as bulk of old crop had already been physically shipped under forward deals, but prices stayed on the higher side.

The hitherto inactive cereal sector also came in for strong support by end product users and was quoted sharply higher. Pulses again led the fresh price hike on the counters of essentials and rose by Rs75 to Rs275 and Rs200 to Rs400 per bag for urad, gram whole and gram dal and masoor whole and dal owing to short supply. Others were held unchanged.

Moong was, however, an exception, which was quoted lower by Rs65 per bag in the absence of strong demand from the retailers.

Sugar on the other hand was an exception, which came in for renewed selling partly owing to steady arrivals from mills, and was marked down by Rs40 per bag. Gur and desi sugar also fell by Rs100 and Rs200 in sympathy.

The notable feature of the week’s trading was sharp increase in prices of cereals followed by reports of a considerable decline in arrivals from Sindh markets.

Maize, jowar and bajra were leading among cereals, which were quoted higher by Rs50 to Rs125 per bag. Barley also rose by Rs100 to Rs200 per bag.

Oilseed sector, on the other hand, did not change much as prices of major seeds, mainly rapeseed, castor seed, were held unchanged but on the other hand cottonseed rose by Rs50, while til suffered fresh fall of Rs200 on selling at higher levels and slack export demand.

Oilcakes ruled unchanged for rapeseed cakes, while cottonseed cakes were marked up by Rs20 to Rs40 on short supply.

—M.A.