KARACHI: Millers have decided to reduce ex-mill price of various varieties of flour by Rs6 per kilo following improvement in supplies in government’s wheat to the mills, it emerged on Tuesday.

Chairman Pakistan Flour Mills Association (PFMA), Sindh Zone, Khalid Masood said after Rs6 per kg drop, the new ex-mill rate of flour No 2.5 has been fixed at Rs48-50 per kg followed by Rs52-54 per kg for fine and super fine (maida) flours.

“The price cut has been made specifically for Karachi,” he claimed adding that the new rates would become effective in a day or two.

When asked that rates of Ashrafi and Bake Parlor flour are still high, he said “these are brands and far superior in quality with normal flour varieties. They have separate customers.” The five kg and 10kg bag of these brands sell at Rs340-350 and Rs660-670 as compared to Rs290 and Rs580-590 two weeks back.

To a query that the rates of flour No 2.5, fine and super fine are very high in the markets, he said “we have cut price on ex-mill rates. The city government is responsible for taking notice of profiteering by the retailers.”

The federal government is told that importing wheat may not be a good idea

An improved supply of wheat by the government to flour mills has also made a positive impact in the open market where wheat prices have started decreasing.

The rate of a 100kg wheat bag, which was increased to Rs5,200-5,300 a week ago, now stands at Rs4,800.

He said 72 mills in Karachi are getting 1,200 wheat bags per day which was 300-600 bags last week. He anticipated more price cut in flour in case supply of government’s wheat to the flour mills further improves. Mills are getting wheat at Rs3,450 per 100kg bag from the government.

Khalid said mills were also focusing more in ensuring supplies of flour No 2.5 at Rs43 per kg. Mills were providing 24,000 flour bags, weighing 10kg each, in the six districts of the metropolis on a daily basis and the same 10kg bag of flour was also available in bachat bazaars. Flour mills in Karachi have also set up fair-price stalls each outside their premises, he claimed.

Commenting on the proposed duty-free import of around 300,000 tonnes of wheat, he said he informed National Food Security and Research Minister Khushro Bakhtyar on Monday that the import of the commodity might not be feasible as Sindh’s new wheat crop would arrive in March followed by Punjab’s new crop in April.

He said he further told the minister that the private sector, especially flour mills, was unlikely to import wheat as the landed price of Ukrainian, Argentinean and Russian wheat would come to Rs4,800 per 100kg bag. The high-quality Australian wheat was also more expensive than the Argentinean and Ukrainian wheat, he added.

The PFMA chief said: “We may not require imported wheat if supplies of grain from the government to the mills continue smoothly in the coming weeks.”

Wheat and flour prices in Karachi had been under pressure since April 2019 when the 10kg bag of flour was sold at Rs330-340 based on the 100kg wheat bag price of Rs3,000.

From April 2019 till date, consumers had paid over Rs30 per kg in various flour varieties.

Consumers braved wheat and flour crises owing to non-procurement of wheat by the Sindh government last year on the pretext that it already had 800,000 tonnes of carryover stocks of the previous crop.

The quantity of the carryover stocks was only on paper and the real stocks were just 500,000 tonnes in which half of the quantity was substandard.

Millers were forced to buy costly wheat from the open market due to the non-procurement of wheat by the Sindh government.

A month back, the Sindh government in the presence of flour millers had inked an agreement with the Pakistan Agricultural Storage and Services Corporation (Passco) for procurement of 300,000 tonnes of wheat. However, the Sindh food department had already received 100,000 tonnes from Passco in December 2019. Millers in Sindh are now getting wheat from the remaining 300,000 tonnes of the allotted wheat.

Published in Dawn, January 29th, 2020