Pakistan: Short supplies keep rice prices higher

The Karachi wholesale commodity markets last week remained under the grip of speculative forces as leading among them tried to grab new crop arrivals of some of the essential items for hoarding purposes. Barring some varieties of rice, which showed fresh rise in prices on news of higher exports and pressure on local supplies, price change on the other counters were mostly modest and fractional.

On the rice export front, physical shipments are being made to meet the deadlines as a rice loader remained in the port throughout the week loading the commodity against forward deal. Another to load 20,500 tons of rice is in the port. Prices of rice on the wholesale market remained on the higher side owing to pressure on supplies. The arrivals of previous crop from the upcountry is also said to have dried up.

Whether or not local prices will fall from the current all-time high level after the arrival of new crop in September, is not clear as it will essentially depend on the size of the new crop. Commodity dealers said the entry of China in the rice export business and breakthrough in the African markets for IRRI varieties showed that the rice prices may not fall from the current highs during the next season also.

However, unlike previous week prices changes on most of the essential counters were orderly and did not reflect panic buying from the leading commercial trader. Private sector rice exporters, on the other hand, remained active buyers followed by reports of about 10 per cent increase in exports and to cover their forward sales.

IRRI-6, IRRI broken and coarse basmati were leading among them, which posted gains ranging from Rs15 to Rs100 per bag. On the other hand fine varieties including sela and kernel were traded at the last levels despite reports of pick up in foreign demand.

Source: Dawn, Pakistani Daily