Bumper crop leads to decline in rice prices
The panic selling mainly originated from leading stockists followed by reports of another bumper crop and fears of decline in prices after the arrival of new crop.
According to market sources, harvesting of new crop has resumed in some parts of the Sindh rice belt and arrivals are due by the end of the current month, dealers said.
They said largest decline was noted in the price of IRRI-varieties whose weakness spilled over to fine types including basmati but kernel and sela types were traded at the last levels.
Prices of some other essential items, on the other hand, remained fairly stable followed by reports of steady arrivals from upcountry trading centres and partly to considerable fall in retailers’ demand.
The mid-week closure on account of Independence Day holiday had its toll in the form of slow ready off-take but on the other hand did not allow sharp rise in prices of essential items.
The notable feature of the week’s trading was that the rice sector remained under pressure for the third week in a row amid stockists’ fear that harvesting of the new IRRI crop in Sindh is expected to be resumed by early next month.
The market talk of another bumper crop around six million tones forced the leading stockists to sell in part their stocks amid fears that prices could fall further from the current levels, dealers said.
The fresh fall in IRRI prices reflects worries of both the commercial houses and stockists and they are active sellers of the stocks of previous crop, they said.
Basmati type though had fallen from the all time higher level of well over Rs10,000 per bag of 100 kg but are still ruling high around Rs8,500 both for kernel and sela types.
But the future price pattern of the both would be set by export demand and the final crop estimate.
Sufficient unsold stocks of the last crop are already said to be haunting those who had purchased them at much higher rates during the last year’s price flare-up, market sources said.
Among other essential items, notably sugar remained stable as the government has banned further export of the commodity beyond 0.4m tones out of a record production of about five million tones during the crushing season ended May this year.
After meeting the local demand, a buffer stock of about a million tones will be available to meet any emergency or price flare-up before the arrival of new crop in December or early January next year, market sources said.
Wheat amid either-way modest changes followed by reports of comfortable supply position finally settled down slightly above the previous levels but there was no major changes on supply side form the official sources.
The market decline was led by IRRI varieties, which came in for active selling both from the commercial and brokerage houses and fell sharply lower by Rs100 to Rs450 per bag for both IRRI-6 and IRRI-Sindh.
Basmati followed them, which was also marked down by Rs200 to Rs300 per bag of 100 kg but kernel and sela varieties resisted decline and were firmly held unchanged at the last levels.
Other essential items including wheat and pulses did not show any change and were firmly held at the last levels, sugar was quoted higher by Rs10 per 40 kg on reports of pressure on ready supplies. Gur also rose by Rs100, while desi sugar was held unchanged.
For the second week in a row, all types of pulses were traded at previous levels as supplies matched the ready demand followed by steady arrivals from upcountry markets.
Cereals on the other hand maintained firm outlook as prices of barley and bajra were marked up by Rs50 to Rs100, but on the other hand maize and jowar were held unchanged in the absence of strong demand.
Oilseed sector ruled weak as prices of major seeds including cottonseed and others were marked down by Rs20 to Rs125 per 40 kg but til and castor seed were firmly held at the last levels.
Oilcakes did not show any change and were traded at previous levels for both cottonseed and rapeseed cakes amid light trading.—M.A.