Falling wheat prices in the market
CONFLICTING reports about political crisis and falling prices of wheat dominated trading on the Karachi wholesale commodity markets during the preceding week and according to some dealers, this also affected the activity on some other counters.
But late week reports that two ships were arriving to load 94,000 tons of wheat for export changed the price outlook and further fall was averted, dealers said.
However, most of them were of the opinion that wheat crop appeared to be victim of production gluts on various counts, mainly delay in procurement and the strike of patwaries.
The problem of supply of gunny bags to growers and their protests over the issue had further aggravated the situation.
However, there were no immediate corrective measures by officials to ease the situation, they said.
As a result, wheat price had fallen from the procurement price of Rs950 per 40kg to around Rs700 or below, dealers said.
However, situation in the Sindh wheat belt was reportedly normal with stray complaints about short supply of gunny bags. The prices have fallen below official rates, but not as low as in Punjab.
Problems on the export front and absence of exporters as buyers were other factors contributing to fall in wheat prices. However, some of them were busy building up positions at the current lower levels to sell it in the world markets after improvement of situation, some others said.
They said fall in wheat prices had a sympathetic bearish impact on other essential items, mainly sugar, which again remained
under pressure partly on selling by commercial dealers and partly to slack demand.
Among essentials items, sugar led the fall for the third week consecutive week but there were no apparent bearish reason behind the sell-off, dealers said. It managed to close unchanged on late week revival of demand.
Bulk of the early selling originated from mill owners followed by conflicting taxation reports and general sales tax in the new budget, they said.
Some others attributed the fall to slack in general demand and absence of panic buying by retailers. Hoarders of the commodity also remained conspicuous by their absence, they added.
The weakness of wheat sector spilled over to sugar counter resulting in sympathetic fall which might continue in the coming sessions until wheat exports resumed.
Market sources said a record wheat crop for the second season in a row and a brief lull in its export seemed to have caused a substantial pressure on prices.
They hoped the situation would improve after the resumption of export of the two million tons of wheat allocated from the new crop.
The activity on the rice export front was a bit slow as much of the previous crop had already been shipped by the private sector exporters, they said.
Activity on the pulses sector was normal but unlike previous weeks gram-led fall was averted as higher new crop was well-absorbed by commercial houses, dealers said and added prices of other types, notably imported stuff, were held
Activity on the cotton market remained slow as ginners held on to their positions and sold only some inferior lots below Rs8,500 per maund but official spot rates were held unchanged at Rs8,500 per maund.
Major oilseeds including til, rapeseed and castor seed were traded around previous levels followed by fall in both local and foreign demands.
Oilcakes followed the lead of oilseed and were again held unchanged for both rapeseed and cottonseed amid slow demand from crushers.—M.A.
Courtesy: The DAWN