LAHORE: Lauding the Punjab government’s declaration of increasing the procurement price to of wheat to Rs3,900 per 40kg, a group of flour millers, however, fears the decision may disrupt the flour market if the rate of the current grain supplies from official storages is not brought on a par with the rate for new government purchases.

“The Progressive Flour Millers lauds the government’s decision of increasing the minimum (wheat) support price to Rs3,900 per maund. However, this increase could have been more beneficial had it been announced at the time of (wheat) sowing rather than at harvesting time,” a press release issued on behalf of Khaleeque Arshad and Majid Abdullah, chairman and president, respectively of the group said here on Sunday.

The caretaker government had on Saturday enhanced the wheat procurement price to Rs3,900 per 40kg from last year’s Rs2,200 per 40 kg.

The progressive millers said that had the announcement been made at the sowing time, it would have encouraged the farmers to grow more grain.

They said that they have serious reservations on the announcement of the start of the wheat procurement drive by the Punjab food department on March 10.

For first time, dept will release wheat to mills at a lower rate than its new procurement price

They said in the press release that the food department is presently issuing wheat to flour mills at a rate of Rs2,300 per 40 kg, while at the same time it will be procuring wheat from farmers at Rs3,900 per 40 kg.

This situation will lead to corruption at the hands of “inefficient” millers and the lower formations of the food department, they said.

“The lucrative price differential of Rs1,600 per 40 kg will exploit the situation. For the first time in history, the department will release wheat to mills at a lower rate than its new purchasing prices. Ultimately this will lead to malpractices,” it was feared in the release.

The unscrupulous elements will hoard the subsidised grain and sell it to the government at the enhanced rate of Rs3,900 per 40 after a few days, it added.

The provincial government is issuing 26,000 tonnes of wheat at a subsidised rate of Rs2,300 per kg on a daily basis.

The progressive millers suggest that the Punjab government increase the wheat issuance price immediately in order to have a smooth market correction and put a stop to likely corruption opportunities for the inefficient millers and the black sheep in the department.

Pakistan Flour Mills Association, Punjab chapter president Iftikhar Ahmed Muttoo, however, sees no crisis in the making because of the price differential. He argues that Sindh had already announced Rs4,000 per 40 kg price while Punjab was expected to follow suit.

Responding to a query, he said that whatever quantity of wheat they got from the food department, they grind it and market an equal quantity of flour under the strict supervision of the department.

Published in Dawn, March 6th, 2023