PRICES of essential items on the Karachi wholesale commodity markets were again traded higher as commercial traders were not inclined to loosen their grip over sources of supply.

Arrivals from upcountry markets were also below normal weekly figures, and together with stockists’ strong hold on ready supplies there was no let-up in price spiral, some dealers said.

Like previous weeks, rice sector again led the price flare-up under the lead of sela type basmati, which shot up by Rs3,000 per bag of 100 kg to Rs10,000, the highest-ever price so far.

Dealers said fresh increase in prices reflected that fixation of minimum export price of rice types by the government had failed to check speculative trading, rather had further aggravated the supply situation.

Some varieties of pulses also came in for renewed support as their prices rose under the lead of new gram crop and gram dal.

Price spiral of Rs400 per bag of gram was beyond the perception of brokers as they claimed a better harvest of gram crop which either was held by middlemen in the interior or by leading commodity traders to have a grip over its prices, market sources said.

Over a million ton of gram is grown in the country every year, which is sufficient for local consumption. But as its export had been allowed by previous governments, its prices hit new heights.

“The commodity trade is now guided by speculators who have enormous funds at their disposal. They also have the capacity to hold back the commodity to create artificial shortages to keep prices on the higher side”, commodity dealers said.

The current unprecedented increase in prices may not have any relevance to supply and demand factors, as the commodity trade at present is being controlled by moneyed traders, some others said.

“How one could justify the fact that wheat prices continue to increase despite a better harvest and import of half a million tones during the last couple of weeks”, they added.

Market sources alleged that a good part of the local wheat finds its way across the border at a much higher rate. The “growers here are feeding not one but two countries and that is why the commodity is short in supply and higher in prices”, they added. Sugar, dormant at previous levels for the last couple of weeks owing to oversupply, showed sympathetic increase but it was modest.

After several weeks of sustained price flare-up, rice sector did not show much variation and prices remained stable around previous levels after the fixation of minimum export prices at $1,500, $1350 and $750 per tone for different varieties.

In physical trading, the market advance was again led by the rice sector where prices of both IRRI and fine type basmati were quoted higher by Rs600 to Rs900 per bag. Broken basmti was also quoted higher.

Among pulses, masoor whole and masoor dal remained under selling pressure and fell by Rs100 to Rs300 per bag. On the other hand urad and gram whole and gram dal showed gains ranging from Rs75 to Rs400 per bag.

Wheat followed them, as despite higher imports and better harvest, its prices rose to a record level after rising by Rs220 per bag amid pressure on ready supplies owing to slow new crop arrivals from upcountry markets.

Cereals did not show much change, barring bajra, which was quoted higher by Rs250 per bag, while jowar and maize were traded at previous levels.

Among major industrial raw materials, guar seed rose by Rs75 per bag on revival of local demand from the end-product users, mainly processors. Oilseed sector again remained dormant as prices of major seeds including cottonseed, rape seed, til and castor seed were held unchanged for want of active demand. Oilcakes were quoted higher by Rs25 to Rs30 for cottonseed cakes, while rapeseed cakes were firmly held at the last levels.—M.A.