Senior government agro-economists say that supply of highly subsidised wheat to the flour mills is the root cause of the current flour crisis in the country.
Talking to Business Recorder here on Saturday, they said that because of failure of wheat crop in Australia and the United States the prices of wheat in the international market have skyrocketed from $200 per ton to $600 per ton.
They said that the government was importing wheat @ $600 per ton, or Rs 1200 per 40 kg but was supplying to flour mills @ Rs 465 per 40 kg to keep the flour prices at Rs 15 per kg. They alleged that some flour mills, retailers and market manipulators were taking undue advantage of the high international wheat prices and were fleecing the people by selling flour at exorbitant rates.
Top managers of the country's food security said that there was no shortage of wheat in the country. "Besides private stocks, the government has 3.2 million tons wheat in its stocks which would be sufficient till the arrival of the new crop," they emphasised. They said: "The government was supplying 31,000 tons wheat to 954 flour mills daily to meet the needs of 120 million population."
Besides, the government was supplying flour in large quality to 3,500 utility stores outlets in all parts of the country, they added. They said that under present arrangements, the flour mills are required to sell 20 kg flour bag to retailers @ Rs 285, and to the consumers at Rs 295 to Rs 300, or Rs 15 per kg. They apprehended that wheat and flour were being smuggled to India and Afghanistan in huge quantities, where it is sold @ Rs 32 per kg.
They said that Afghanistan used to meet its 50 percent flour needs from Russia in the past. Since Russian flour is highly expensive, Afghanistan is currently meeting its 100 percent requirements by Pakistan's cheap and good quality flour. They pointed out that in the local market on Saturday wheat was sold @ Rs 2100 and Rs 2000 per 100 kg bag which was almost double of government wheat price.
They said that market forces had their own pull, and prices were subject to demand and supply formula. An agro economist apprehended that unless the government increased the price of its wheat and brought it at par with market prices, the flour crisis would not end and the purpose of supply of cheap flour to the consumers would not be served.
He regretted that instead of the poor farmers, industrialists and traders were benefiting from the high prices of wheat in international market. He said that despite high cost of inputs the government has not increased the support price of wheat this year, which could affect the production targets.
PUNJAB FLOUR MILLS VIEWPOINT: A former president of Islamabad Chamber of Commerce and Industry and owner of a big flour mill said that there should not be any flour crisis in Punjab since all mills were selling 20 kg bag @ Rs 285 to retailers.
He said that Sindh, NWFP and Balochistan were deficit areas in wheat, which had caused crisis-like situation in these provinces. He said that instead of monthly supply 0.9 million tons wheat the government was supplying about 0.65 million tons, which had caused some flour scarcity in the country.
He said that the flour mills also used to buy wheat from the private sector but there was no wheat available in the market presently. It may be added that there are 536 flour mills in Punjab, 139 in Sindh, 245 in NWFP and 34 in Balochistan.
Meanwhile a meeting was held in the Cabinet Division on Saturday to review the wheat and flour situation in the country. Minfal officials briefed the meeting that there were sufficient stocks of wheat in the country, but stressed the need for checking of hoarders and profiteers by provincial governments. It may be added that flour prices crossed Rs 30 per kg in some parts of the country on Saturday, prompting protests by people.
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