KARACHI: The retail prices of flour are set to rise further after millers raised the rates by up to Rs11 per kg just three months ahead of the new crop’s arrival in Sindh and Punjab.

In Sindh, millers have increased the price of flour no. 2.5 to Rs115 per kg from Rs104 a week ago and Rs96 last month.

Similarly, the prices of fine and super fine varieties increased to Rs118 from Rs108 per kg a week ago and Rs105 last month. The chakki flour price has risen to Rs140 per kg from Rs120 a month ago.

Aamir Abdullah, chairman of the Pakistan Flour Mills Association (PFMA) for Sindh, said that the rate of flour no. 2.5, and the fine and super fine varieties had been the highest after the price of a 100kg wheat bag jumped to Rs10,200 in the open market from Rs9,300 a week ago. The bag was selling for Rs8,300 last month.

He dismissed the impression that wheat prices were rising because of smuggling and pointed to traders in the open market who he said had been releasing the grain slowly to fetch more prices until the new crop arrived.

Mr Abdullah said the Sindh government had been providing 10,000 wheat bags per month to each mill, which was insufficient in view of rising flour demand in winter.

“We have been regularly asking the Sindh government to increase mills’ wheat quota for the next three months to curb a further jump in flour prices, but there has been no response so far,” he said.

The Sindh government has fixed the rate of flour no. 2.5 at Rs650 for a 10kg bag (or Rs65 a kilogram) and the millers are getting subsidised wheat at Rs5,825 per 100kg to provide relief to the masses.

When asked why this subsidy was not being passed on to citizens, he said 150 vehicles carrying 600-700 10kg bags each reach around 90 sales points and 250-300 shops daily in several areas of Karachi, but this was not enough to cater to the huge demand of the city’s millions of residents.

Mr Abdullah said the millers could only get a third of subsidised wheat released by the Sindh government and had to lift the rest from the open market at higher rates, thus resulting in higher flour prices. He claimed that flour rates in Sindh were still lower than in Punjab.

Farid Qureshi, general secretary of the Karachi Retail Grocers Group (KRGG), said the makers of high-quality fine flour — such as Ashrafi and Bake Parlour — had raised prices by Rs7 per kg and the new prices were set to cross Rs650 and Rs1,300 per 5kg and 10kg, respectively.

He said chakki flour rates would rise to Rs150 from Rs140 per kg, whereas the retail rates of flour no. 2.5, and fine and super fine varieties would also rise in sync with the hike made by millers. He said the retail rates usually remained higher by 10-15 per kg than the millers’ rates.

He urged Sindh Chief Minister Murad Ali Shah to take notice of the persistent jump in flour rates which would hit the consumers badly during Ramazan, starting from the third week of March.

The provincial government had 7.5m tonnes of wheat in its stock in the first week of this month, enough to supply flour to the people at subsidised rates until March 2023.

The government had set a target of procuring 1.4m tonnes of wheat in the current season. It procured one million tonnes from farmers and 400,000 tonnes from the state-run Pakistan Agricultural Storage and Services Corporation (Passco).

According to the Pakistan Bureau of Statistics, Pakistan spent $2.24bn to import around 6.92m tonnes of wheat from July 2020 to November this year to bridge the demand and supply gap.

During the first five months (July to November) of the current fiscal year, wheat imports stood at 1.1m tonnes ($460m) compared to 1.023m tonnes ($340m) a year ago. The average per-tonne price of grain stood at $419 during the five months compared to $332 in the year-ago period.

Published in Dawn, December 25th, 2022