KARACHI, April 7: Maintaining an uninterrupted supply of wheat and wheat flour to urban consumers throughout the year seems to be the main focus of the government, and prices are being treated as an issue of secondary importance.

This is how a few commodity traders and market analysts view the strategy of the government after noticing that prices of wheat and wheat flour are crawling up in the open market, with no intervention of the federal or provincial authorities.

“After increasing the support price of wheat to Rs625 for 40kgs (Rs15.62 per kg), the flour price in the market is bound to rise,” Rezauddin, a shopkeeper in Old Town area, explained and added, “wheat flour was sold at Rs19 and Rs20 a kg in Karachi markets on Sunday.”

Wheat support price had to be increased to encourage local farmers grow more wheat and discourage smuggling as wheat prices in the neighbouring countries are in the range of Rs800 to Rs1,000 for 40 kgs.

“Provision of subsidy is one solution to provide wheat flour at affordable prices to urban consumers,’’ a market analyst said. But he added that experience is that subsidised wheat and wheat flour is smuggled out to neighbouring countries, and urban consumers remain deprived.

Therefore, practical solution is to increase salaries to urban consumers by fixing a minimum wage of Rs6,000 a month and enable him to pay a little more. But the government should ensure that there are no shortages.

“I bought wheat at Rs1,750 for a bag of 100 kgs (Rs17.50 a kg) for grinding in my mill,” Akhtar Sheikh, a former chairman of Pakistan Flour Mills Association, Sindh, told Dawn on Monday.

He said that grinding and handling charges for fine atta (choker-free flour) is Rs4.50 a kg while that of chakki atta (flour without extraction of choker) is Rs3. The flour mills still get wheat from government stocks at the old issue price which is Rs465 for 40 kgs. But the government has heavily cut down its wheat supplies from its stocks to mills.

Vast differences in the wheat support price fixed by the present government and the previous one, issue price for government stocks from old crop and absence of elected governments in Sindh and the Punjab till Monday have given manipulators an open field to play their game. This is amply manifested in the increase in prices of wheat and wheat flour.

“We have drawn up a strategy to tackle the wheat and wheat flour situation,” said Chaudhry Nisar Ali Khan, Federal Minister for Food and Agriculture, from Islamabad over telephone on Monday.

Chaudhry Nisar spent the whole Sunday in Lahore to discuss wheat and wheat flour situation with Punjab leaders of his party where the problem has become more serious.

In Lahore, seven flour mills were closed on Sunday for taking an undue advantage of the situation.

Chauhdry Nisar held a three-hour meeting with the prime minister and other top officials on Monday to prepare a strategy.

“This strategy will be discussed in the meeting of the Economic Coordination Committee (ECC) of the cabinet on Tuesday,” he said.

But the federal government is unable to address the wheat problem because provincial governments are not in place in the Punjab and Sindh. The provincial food departments and the provincial food ministers are, in fact, the operational arms of the federal government when it comes to tackle wheat and wheat flour situation. Without any political leadership at the helm of affairs, the provincial food bureaucracy remains tentative and indecisive.

“We don’t want to see long queues for flour outside fair price shops,” the minister said, but he was confident that the situation would be brought under control once provincial governments are formed in the Punjab and Sindh.

With reports of good crop because of recent rains in Sindh and Punjab, the expectation is that the yield would improve, and farmers and officials are confident that the government would be able to build up six million tons of stocks at the procurement price of Rs625 for 40 kgs.

“Wheat prices in the open market will come down to a certain level soon after the crop starts coming in the market,” Sindh Food Secretary Kamran Baloch said.

He said that the government had cut down wheat supplies to mills from its stocks and would suspend it altogether from April 15 as there would be enough wheat in the open market.

He said that the Sindh food department was watching the wheat and wheat flour situation.

At present the millers are being supplied wheat at Rs465 for 40 kgs from government stocks of previous season’s crop as against fresh support price of Rs625 for 40 kgs which has created a distortion in the market.

“But supplies from government stocks are too meagre,” complained Akhtar Sheikh. These meagre supplies will be suspended altogether from April 15.

“Subsidy has neither helped growers, nor benefited consumers,” a market analyst said.

The government has, therefore, opted to give a better price to growers even if urban consumers have to pay a little more.

The government is expected to develop a market monitoring system and will intervene only when there are shortages or when market price exceeds a certain benchmark, to be decided by the government.

“The government strategy is to put an effective check on smuggling of wheat and wheat flour,” he said and added, “a fiscal strategy through price fixation is the most effective way to stop smuggling.”

The poorest section of society can be addressed by way of food stamp or zakat distribution schemes, but a majority of urban consumers will now have to pay market-related prices of wheat and other agricultural products.