KARACHI: Amid a good wheat crop, consumers continue to take a costly ride as millers in less than three months made 5th price hike in flour No. 2.5 rate to Rs39 per kg from Rs37.50 prevailing ahead of Eid.

Similarly, the rates of fine and super fine flour have been jacked up to Rs43 per kg from Rs41.

From April till to date, millers in Sindh had raised flour no. 2.5 rate by Rs5 per kg followed by Rs5.50 per kg in fine and super fine flours.

Attributing flour price hike to rising wheat prices in open market, a miller said the 100kg wheat bag is now available at Rs3,700 which was Rs3,400 prior to Eid, while it was selling at Rs3,000 in April.

The 5kg branded flour bag now sells at Rs240 against Rs230 ahead of Eid while the 10kg bag sells at Rs460-470 from Rs440-450.

Flour millers earlier last month had warned Sindh Chief Minister Murad Ali Shah of looming wheat and flour crisis besides seeking a ban on inter-provincial movement of 20,000 tonnes of wheat on a daily basis with bulk to Punjab.

In response, the Sindh government on May 21 imposed a ban on inter-provincial movement of wheat in anticipation of the grain’s shortage and resultant price hike of flour in the province.

The Sindh government was of the view that current wheat crop in Punjab had suffered widespread damage in rains, which frustrated the provincial government’s plans to achieve its procurement target of the grain.

According to millers, the Sindh government had neither announced a procurement policy nor fixed official rate of the grain. On papers, Sindh has 800,000 tonnes of last year’s wheat stocks but it actually had 400,000 tonnes.

They said that despite ban on inter-provincial movement, Sindh wheat is still finding into Punjab through border thus creating shortage of grain in the open market. They added the Sindh chief minister seems least interested in resolving wheat and flour crisis.

On Wednesday, Chief Secretary Syed Mumtaz Ali Shah has asked the Divisional and Deputy Commissioners to ensure eradication and prevention of hoarding and profiteering of wheat flour, by keeping vigilance on provincial boarders, with a view to control the prices, throughout the province.

He issued these directives, during a meeting held in his office regarding food security measures, which also attended and addressed by Food Minister Hari Ram, commissioners and the secretary food also attended the meeting.

The chief secretary maintained that the godowns of the wheat flour shops must be checked and ensure action against the hoarders under the Sindh Food Stuff Act, according to which no traders is allowed to have a stock of 10,000 bags in their godowns and 25,000 in the PRCs (provincial reservoir centres) established by the Sindh Food Department.

Wholesalers raise sugar prices

As the Finance Bill 2019 is yet to approve, the wholesale sugar prices on Wednesday crawled up by Rs2 to Rs3 to Rs68-69 per kg after the government unveiled a budgetary proposal to increase the sales tax to 17 per cent from 8pc on the commodity from next fiscal year. A wholesaler said that sugar millers had promptly raised the prices and consumers would see its impact at retail level shortly.

The government had already anticipated a price jump of Rs3.65 per kg as impact of this hike in sales tax.

Cane production was lower by 19.4pc to 67.174 million tonnes compared to 83.333m tonnes achieved last year due to a 17.9pc shrinkage in cultivated area. Similarly, sugar production fell by 13.35pc to 4.898 million tonnes in July-March 2018-19 from 5.653m tonnes in the corresponding period last year.

The government was of the view that tax collection of Rs18bn from sugar sector is much lower than its actual potential and to minimise this tax gap the sales tax rate was being enhanced from next fiscal year.

Published in Dawn, June 13th, 2019