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Sugar prices hit all-time high amid supply crisis




  • TSugar remained in the limelight on the Karachi wholesale commodity markets during the previous week. The prices soared to new peak levels amid panic consumer buying due to the pressure on supplies.

    According to dealers, the prices at retail level are being quoted between Rs40 to 45 per kilo as leading commercial houses and mills are holding back their stocks. This in turn is constantly fuelling the current flare-up.

    The prevalent selling rates at the consumer level have reached to a height never seen before. The continuous escalation has left behind all previous records of rate rises in previous decades. The incessant hike is yet to see an end.

    The supplies may be short of daily demand but the chief destabilizing factor behind the run-up is said to be ineffective price monitoring measures at the government level, they added.

    In accordance to general price escalating trend, the Utility Stores Corporation of Pakistan too, has raised its selling prices by Rs4 from Rs23 to Rs27 per kilo. However, the rush of consumers to these stores and the consequent long queues may have left a many without procuring their required amount of the commodity, brokers said.

    The official announcement to import 50,000 tons of sugar from India for easing the price pressure from its peak height could not play its due role on the accelerating value movements, they said.

    According to market sources, local mills are facing the problem of higher cane prices and are finding it difficult to pull down the rates after releasing a larger portion of the new crop in the open market.

    The local production may be short or to say below the three million tons figure but steady arrivals from the mills should avert the prevailing crisis of a terrible shortage.

    On the other hand prices of some other essential items, notably wheat and some varieties of rice remained under pressure and suffered fresh but fractional fall. Wheat came under pressure on the reports of oversupply and rice because of the export problems and a bumper crop.

    In spite of this, wheat recouped the initial loss of Rs5 on reports of steady arrivals from the upcountry markets along with a modest decline in mills’ demand, other essentials were traded modestly.

    Rice exports were maintained on the higher side and prices of fine types were held unchanged on steady support from the private sector exporters. IRRI types, both whole and broken were exception and fell further by Rs5, partly to selling by the commercial houses, and partly to larger new crop arrivals from the Sindh markets.

    Among other essentials, pulses were mostly traded at previous levels barring peas which were quoted higher by Rs40. Gram, masoor, urad and tuver types remained unchanged at previous levels.

    Major industrial raw materials, guar seeds came in for fresh mill buying and rose by Rs125 to 175 per bag followed by the pressure on supplies caused by another short crop in Sindh.

    Processors were worried over the persistent price flare-up as it made exports of the by-products uncompetitive in the world market.

    Cereals on the other hand lacked normal trading interest and were firmly held at the last levels under the lead of maize, jowar, barley and bajra. Stray business was reported at the unchanged rates.

    Oilseeds were also traded modestly under the lead of cottonseed, rapeseed, and castorseed in the absence of strong mill buying. Til followed them amid reports of larger arrivals from the Sindh market and falling export demand.

    Oilcakes, on the other hand showed stray price movements amid alternate bouts of buying and selling. While cottonseed cakes rose by Rs5 to 10, rapeseed cakes were traded at previous levels.—M.A.

    Courtesy: The DAWN

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