Wheat flour prices shoot up by Rs5/kg

Wheat flour prices rose sharply by Rs 5 per kilogramme following shortage of the commodity in the domestic market.

Traders said Saturday that wheat flour (Chakki Aata) prices surged to Rs 65-67 per kilogramme compared to Rs 60-62 per kilogramme a week earlier. Mills' flour prices increased from Rs 50 per kilogramme to Rs 55 per kilogramme.

They added that wheat stocks of Sindh Food Department have been consumed and now the department is not supplying wheat to flour mills, because of which mills are now compelled to procure expensive wheat from open market.

Sindh Food Department was supplying wheat at Rs 3,450 per maund to flour mills, while wheat prices in open market have reached Rs 5,200 per maund up from Rs 47,000 per maund previous week.

Sources said flour mills are taking full advantage of the current situation and earning exorbitant profits on sale of wheat flour. The wheat grinding cost is not more than Rs 3 per kilogramme, despite that they (mills) are earning over Rs 10 to Rs 12 per kilogramme margin on wheat flour.

Muzzammil Rauf Chappal, a leading commodity trader told Business Recorder that last year wheat crop was short due to unexpected rains at the time of crop harvesting. Observing this situation in October last year, traders requested the government to import wheat for domestic consumption and to avert the expected wheat crisis in the country, he added.

The government is going to allow some 0.4 million tons of duty-free import of wheat to meet the domestic needs. The government has taken wheat import decision very late as currently the wheat flour prices have already surged across the country and new crop arrival is expected just after two months, ie, March, he said.

Chappal said that November and December were best for the import of wheat to avert the looming crisis as the import process will take some 30-45 days to complete.

He said imported wheat is likely to cost approximately Rs 45 per kilogramme as presently Russian wheat prices are $250 to $265 per ton in the international market.

Chappal said that wheat prices in the domestic market have increased because of administrative weaknesses in commodity management. "Government can tackle this crisis with better administrative measures," he added.