KARACHI, May 17: Leaders of wheat flour industry are meeting on May 26 at Quetta to demand removal of ban on inter-provincial movement of wheat after a restriction on inter-district movement in Punjab has been lifted.

The restriction has also been relaxed to a large extent in Sindh, where millers in Karachi have been given permits to purchase wheat from seven districts, including main wheat-growing districts of Sanghar and Nawabshah.

Owners of some 700 mills in Punjab were to close down their factories from Saturday to protest against inter-district wheat movement. After the government lifted this restriction on Friday and allowed mills to stock one month’s requirement, the millers called off their strike.

In Karachi, Sindh Food Minister Mir Nadir Magsi held meetings with traders, brokers and millers on Friday and Saturday to ensure that wheat will be bought in seven districts at Rs1,800 for 100kg so that consumers could get flour at Rs22-23 per kg. The government also wants to be assured that wheat procurement for its stocks is available from farmers at Rs1,565 for 100kg.

“The government has so far procured 470,000 tons of wheat as against a target of 600,000 tons,” an official revealed.

He said the government was confident of exceeding procurement target, which now looks difficult to achieve because farmers are selling wheat to private traders at Rs1,700-1,800 for 100kg.

Even a conservative estimate puts wheat harvest at 20 million tons plus this season, which is more than the requirement for ten months. Import arrangements for 250,000 tons of wheat are being finalised at $325 to $400 per ton. Even then the ministers and bureaucrats in Islamabad and provincial capitals give an impression of panic and tension. This panic caused flurry of activities this weekend in Lahore and Karachi in which millers, brokers and traders are being persuaded to contain their purchase prices with farmers.

“The government is now trying to form a cartel of brokers, traders and millers to ensure a maximum price of Rs1,800 for 100kg of wheat,’’ a leader of farmers in Hyderabad replied angrily when asked to comment on government’s step to contain prices at a certain level by persuasion and pressures. “This cartel may serve the government purpose for some time, but will eventually go against it in coming days,” the farmer warned.

What is worrying the government is unhampered transportation of wheat from Punjab and Sindh to Afghanistan via the NWFP and Balochistan. Wheat is fetching up to Rs1,200 for 100kg in Afghanistan and traditional suppliers are taking all risks to keep their business running because of attractive margin of almost 100 per cent.

The government has decided to supply the commodity to wheat-deficit provinces of the NWFP and Balochistan on official level to keep a check on wheat smuggling onward to Afghanistan and imposed a restriction on inter-provincial movement of wheat, which has angered millers and traders.

“For years, nay decades, Afghanistan was considered an extension of Pakistan’s domestic market and there was official provision for commodities supply to that country in trade policies,” Naeem Butt, chairman Pakistan Flour Millers Association remarked from Peshawar. He wondered as to why the government was imposing restrictions on wheat movement to the NWFP simply to check outflow to Afghanistan.

“Even the State Bank of Pakistan indent Pakistan’s Rs100 and Rs50 currency notes for circulation in Afghanistan from where dollars come here,” a trader in Jodia Bazaar said.

He said the trade with Afghanistan at the official and unofficial level is carried out on cash basis.

“Wheat business has been made murkier and has driven away traditional businessmen,” Raees Ashraf Tarmohammad, chairman All Pakistan Commodity Importers Association said.

He said the government was deeply involved in wheat business right from sowing to harvest, fixes support price, procures wheat, maintain stocks and supply it to millers and, therefore “it is government’s responsibility to maintain some stability in this trade and assure supply and prices for consumers.”

How would one explain knee-jerk reactions of the government when the country still produces bulk of domestic wheat needs and there are more than 1,000 flour mills that have five times more grinding capacity than actual flour requirement of the country?

“In fact there should be a wheat flour glut in the country in such a situation,” a trader remarked, who wondered as to why “we are not able to get out of wheat scarcity and high prices scenario”.