KARACHI: Despite massive import of wheat grains, the prices of wheat flour have surged to an all-time high of Rs75 per kilogram, mainly due to hoarding.
The federal government in July this year allowed duty-free import of wheat to control the prices of wheat flour and avoid the shortage of the commodity in the local market. Private sector was given a quota of some 1.5 million metric tons of wheat import and accordingly, private sector is importing wheat in bulk quantity.
So far, they have finalized deals on the import of some 1.3 million metric tons of wheat, out of which some 0.48 million metric tons has reached Pakistan through eight shipments and wheat is being directly supplied to flour mills.
However, on the other hand, despite import of wheat, the prices of wheat flour are gradually increasing in the domestic market. Prices of wheat flour rose by Rs 5 per kilogram during the last few days. Currently, wheat flour (Chakki Aata) is selling at Rs 75 per kg compared to Rs 70 per kg last week.
Prices of super fine Aata shot up by Rs 5 to Rs 73 per kg up from Rs 68 per kg. Dhai Number (2.5) Aata prices surged to Rs 64 per kg from Rs 60 per kg, showing an increase of Rs 4 per kg.
During the last two years, wheat prices rose by 67 percent or some Rs 30 per kg. In 2018, when the PTI came into power wheat flour price (Chakki Aata) was Rs 45 per kg and now it is available at Rs 75 per kg in domestic market. The wheat grain rate was Rs 35 per kg and now reached Rs 54 per kg.
Muzzammil R Chappal, a leading commodity trader, told Business Recorder that there is some shortage of commodity in the market, adding that despite arrival of imported wheat, prices are still on the higher side.
He said that presently Desi (local) wheat is not available in the market and mills are depending on imported wheat, which is blended with locally produced wheat for flour making. The current blending ratio for wheat production is 80:20 - means eighty percent of imported and 20 percent Desi wheat - while in some parts of Punjab, mills are only supplying flour of imported wheat, he maintained.
He said that the first shipment of imported wheat was sold at the rate of Rs 45 per kilogram and now the imported wheat is being traded at Rs 51 per kilogram due to rising price trend in the international market. The wheat prices in the world market surged to $280 per ton compared to $230 per ton a month earlier. In addition, the locally produce wheat is more expansive and current rate is Rs 55 per kg.
In addition, Sindh government has also not abolished 1.25 percent excise and taxation charged on the import value of wheat. The federal government, allowing the duty free import of wheat, requested Sindh government to abolish the excise and taxation charges on import of wheat. However, the Sindh government not waived these charges and the impact of Excise and taxation charges on imported wheat is about Rs 500 per ton.
Copyright Business Recorder, 2020
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