Wheat price at historic high of Rs 2,800 per 100kg

Price of wheat grain on Saturday surged to historic high of Rs 2,800 per 100kg sack due to supply of the commodity to the flourmills being disrupted during the Eid holidays, traders said. The government's decision of fixing the minimum wheat support price at Rs 2,375 per 100kg is also cited to be one of the other reasons behind the rise in the wheat grain price, traders said.
In a reaction to the government's move and grain supply shortage, traders said that wheat price first surged to Rs 2,750 per 100kg sack last week and now it further climbed to a new peak of Rs 2,800 per 100kg in the local market.
The government is not providing full quota of wheat grain to the flourmills, which was fixed at 2,000 bags of 100 kg to flourmills per week. Last week, the government cut the quota to 1,700 bags of 100kg to each flourmill. Now shortage of the commodity has caused panic in the market, which is pushing the commodity price upward, traders said.
"From today onwards the market situation will become clear as to what extent the wheat grain price will continue to rise, as its supply from main source has been cut during the last four days," they said. Such a rise in the wheat grain price is likely to push the retail price of wheat flour upward, which is still higher than the official one, they said and added that increase in the support price will not help reduce the price of wheat flour.
The inter-provincial ban on wheat movement is also believed to have brought about the commodity shortfall in Karachi, ultimately giving rise to its price, they said. The Sindh government has fixed Rs 23 per kg of wheat flour retail price, whereas different types of flour are being sold at increased rates, retailers said. Flour (fine white) is available at Rs 34 per kg (Rs 340 per 10 kg), Ashrafi brand is available at Rs 32 per kg (320 per 10 kg), flour 2 1/2 at Rs 31 per kg (310 per 10 kg), according to retailers.
Although, this year the country has harvested 22 million tons of wheat crop, its massive hoarding and unabated smuggling into Afghanistan has created acute shortage in the local market, compelling the government to import wheat grain to meet the country's demand, they said. They said that wheat grain shortage is growing despite its imports. Flourmills are heavily relying on the open market to acquire the commodity even on high rates to meet the demand.