ISLAMABAD, March 27 The price of wheat flour has gone up by Rs50 per 20 kg bag while the local market is also short of the commodity.

The increase in the price and shortage in supply has been witnessed after the government of Punjab increased the release price of wheat for flour mills from Rs730 to Rs810 per 40 kg.

According to market sources, the new ex-mill price has been fixed at Rs450 per bag and the retail price at Rs460 per bag from Rs410 and Rs420 per bag respectively. Whereas consumers were complaining that it was being sold at Rs500 a bag in the market.

The price of the 10kg bag has jumped to Rs320 from Rs260. The 100kg bag of fine quality wheat flour surged by Rs530 and was selling at Rs2462 from the earlier price of Rs1,932. Moreover, the commodity is in short supply in the market.

Altaf Hussain, Secretary General Naanbais Association of Islamabad, said hoarders had again started buying huge quantity of wheat for storing it to earn unjust profits in the near future.

The dealers and flour millers predict that after the increase in release prices, there would also be an increase in the wheat prices in the open market; therefore, most of them want to store the commodity before the price increased further, he added.

The Sindh government has already increased the release price from Rs772 to Rs984 per 40 kg; therefore, it is being predicted that the price in Punjab will also surge in the coming months.

Mohammad Sajjad, Finance Secretary Rawalpindi Naanbais Association, said the Sasti Roti Scheme to provide Naan to the people at Rs2 was continuing. He said the Punjab government was providing 60,000 flour bags of 20 kg each to over 12,000 tandoors daily.

The government had earmarked Rs7.5 billion to continue supply of the subsidised wheat flour to the tandoor owners until June 30, 2009. He said a subsidy of Rs165 per bag was being provided by the government which had now been increased to Rs205 per bag after increase in the prices.

Punjab Food Secretary Irfan Elahi said the increase in wheat release price was vital after the government had fixed a high wheat procurement price of Rs950 per 40 kg.

Moreover, he said, there were complaints of wheat hoarding as the harvesting season was approaching. He said the increase in the wheat release price would discourage hoarding of the commodity.

He said the department had some 500,000 tones of wheat in stock which was sufficient to meet the flour requirements of the province until the arrival of the new crop.