Despite the decline in the wheat grain price in the local market and huge supply of wheat at subsidised rate to mills, the prices of flour have not come down to their previous level and flourmills are still earning massive profit.
As a result the average profit per mill has reached Rs 9 million during January 2008, up by 38 percent in a single month, industry sources told Business Recorder.
Sources said the deployment of law enforcement agencies at the flourmills has had some positive impact on the supply and price side. However, 100 percent result has not been witnessed. "The prices of wheat grain has been decreasing gradually in the open market due to the huge import, and presently the price of wheat has decreased by Rs 500 per 100-kg bag," traders said.
They said at present, the wheat price of 100-kg bag of wheat is Rs 1,700 in the local market as compared to Rs 2,200 per 100-kg bag in the first week of January 2008 as the wheat import and strict monitoring of flourmills have discouraged the hoarding by the millers and traders.
Although the price of wheat flour has been lowered by the government, the price of only one product of (Dhai Number Atta) flour has been cut by Rs 2 per kg, while the prices of other wheat products, including fine flour, maida, bran and chakki Atta are still at their peak level.
The price of maida still stood at peak level of Rs 2,000 per 80-kg, fine Atta at Rs 1,975 per 80-kg bag and bran at Rs 330 per 35-kg bag. During January 2008, the average cost of per 100-kg wheat bag stood at Rs 1,526.50, while after the milling of 100-kg wheat bag the selling price calculated Rs 1,894, depicting a profit of Rs 368 per bag.
Therefore, the average profit of per mill further went up during the January and touched peak level of Rs 9 million as compared to Rs 6.5 million in December 2007, depicting an increase of Rs 2.5 million tonnes or 38 percent during January 2008.
Market sources said the price of wheat flour is not more then Rs 13 per kg and if the government should calculate the cost and selling price of wheat and its flour then prices would come down.