KARACHI, April 14: As a fresh wheat crisis grips the cities and towns of all the four provinces with reports of wheat flour touching Rs27-28 a kilogram in some places, the millers and traders predict that the urban consumers will now have to reconcile with price escalation in days to come because the only feasible strategy of food security is to pay more money to growers and phase out subsidy altogether.

In Karachi, wheat flour was being sold at Rs22 to Rs26 a kg depending on its varieties, while in Lahore and Peshawar the consumers were paying even Rs27 and Rs28 a kg on Monday. Naeem Butt, the chairman of Pakistan Flour Mills Association, blamed the provincial governments of Punjab and Sindh for putting an unannounced restriction on wheat movement beyond their borders, which is hitting hard the wheat deficit provinces of NWFP and Balochistan.

Mr Butt called these restrictions as illegal and unconstitutional, which has increased cost of production for the millers in the NWFP and Balochistan as they were forced to pay extra money to the security staff at the border check posts of these provinces. “I have written to the federal government to instruct Sindh and Punjab governments to allow free movement of wheat,’’ he said.

“The government should come out with a clear cut policy on wheat and wheat flour, issue price list, build up wheat reserves, and a wheat import plan, if any, and precise fiscal and administrative steps to counter wheat smuggling,’’ Akhtar Sheikh a local miller suggested.

Millers in Karachi, Lahore and Peshawar blamed the Sindh and Punjab governments of restricting wheat movement to enable them to procure wheat from the farmers at Rs625 for 40 kg.

The wheat procurement is underway in Sindh, where officials are complaining of poor response from the farmers as speculators and manipulators are moving around with bags full of money to buy grains from the farmers. Wheat procurement in Punjab will begin late this month or early next month.

In Karachi the Sindh government has cut down heavily on supply of wheat from the official stocks to millers and is suspending altogether further releases from Tuesday. Akhtar Sheikh, a senior leader of the millers in the city, said that he bought wheat at Rs1,765 for a 100 kg bag as the government was giving only 100 bags a day, which is not even 10 per cent of the need.

After the government stops release of wheat from its stocks from Tuesday till September next, millers fear a sharp rise in wheat prices, which obviously will push up wheat flour prices for consumers in the cities.

Erratic wheat crop assessment has activated speculators and manipulators to jump in the field as government has not come out with the issue price after announcing Rs625 for 40 kg, the procurement price. The government takes the plea that there is no need to declare an issue price as millers will not be given wheat from its stocks at least till next September.

“From April to September there is abundance of wheat in the market as harvesting continues till late June and even in July in parts of the NWFP,” a local miller said to justify the government decision of suspending release from its stocks during next four months.

But in the year 2007 wheat crisis emerged during this period of plenty and now the millers are advising the government to take stock of the crop and requirement and prepare an import plan by next month.

“My estimate is that the government will have to import 2.5 million tons of wheat’’ Bilal Sufi, a senior leader of millers and adviser to Pakistan Flour Millers Association said from Lahore. He has sent a package of proposals to the government suggesting that government should phase out subsidy of urban consumers and instead pay more to the growers to encourage them produce more wheat.

As the wheat production will grow the markets will get steady supply and the need to build up reserves will not be there. There will be no need for the government to procure, to stock and to issue wheat on subsidy.

Whether the subsidy is altogether eliminated or not, the millers and traders believe that its cost will be reduced and growers will get more in future.