LAHORE: Citing the increasing price of wheat, the Pakistan Flour Mills Association (PFMA) on Saturday asked the Punjab government to start releasing wheat from the official stocks to “check the trend and ensure supply of flour” at the agreed price.

Speaking at a press conference, chairman of the Punjab chapter of the association, Asim Raza, said wheat price in Lahore had hit Rs2,210 per maund and in Rawalpindi it costs Rs20 more. Even the provincial average has gone beyond Rs2,150 per maund — transportation charges are another addition.

“Due to this rising trend, the flour prices are also going up and a 20kg bag now costs Rs1,180 instead of Rs1,060 (officially agreed price) in Lahore. The only way to stop this escalation is to release wheat from the official coffers,” he said.

Talking to Dawn, Mr Raza said that millers’ stocks were down to 900,000 tonnes, which, historically speaking, should have ranged between 1.5 and two million tonnes. The millers supplement official wheat with their stocks to maintain supplies.

The Punjab Food Department, the host of official stocks, however, has its own calculations and concludes it can “wait and watch”. “The millers have a case, but only up to a point,” a department official explained.

“Yes, the price has started rising due to certain foreign factors, but still there is no dearth of wheat. As far as the supply side is concerned, the department has over four million tonnes of stock. The millers hold (self-declared) 900,000 tonnes of wheat. The department is partially supplementing the market with supplies to 341 Sahulat (convenience) Bazaars set up by the provincial government for subsidised supplies. This year, the millers, facilitated by the department, purchased 3.4 million tonnes against 1.4 to 1.6 million, as per their own claims. All these factors prove that there is no supply issue.”

The price side is affected by the international market where wheat prices have touched the level of $325 per tonne. “It translates to around Rs2,150 at Karachi. Instead of importing, traders from Karachi have started buying it from Punjab and pushed the price up. It was because of this that the average price in Punjab has gone up to Rs1,980 per maund from Rs1,914 per maund two weeks back. This drift needs to be and will be checked,” he said.

“The department is taking the entire case to the cabinet committee on food and will follow whatever it decides. All these facts and figures, part of the departmental record, will be presented to the committee. The department, however, thinks that once the release price and date are announced, the situation will start improving because the stockists will start throwing the commodity in the market as they see their hopes of a windfall crashing. We cannot dwell on the details, but are sure that things will start improving once both (price and date) are announced,” he said.

“The most crucial part of the policy that will have an immense impact on the market is going to be the release price,” claimed a miller from the city, who did not want to be named.

If Punjab announces a cost considering its own purchase price, it would run the risk of draining its stocks to Sindh, where it was bought at Rs2,000 per maund against Punjab’s Rs1,800. “The difference, if reflected in the release price as well, could spell massive trouble for Punjab. So, it should monitor what price Sindh announces, or check with it before announcing here, so they match each other rather than contradicting. “Otherwise, Punjab would be in a bigger trouble. (It would) see its stock going to Sindh, putting pressure on its supplies, forcing it to import and leading to upheavals in the flour market. Punjab has a situation at hand, and it needs to carefully avoid contradictions in the national market,” he said.

Published in Dawn, September 5th, 2021