LAHORE, July 25: Flour supply has dropped by almost 50 per cent throughout the province as the district administrations and flour millers lock horns over supplies to the NWFP and Balochistan.

The Punjab government has been using high-end NWFP market to keep flour cheap in the province. It has issued permit of around 6,500 tons to millers to sell flour at higher rates of Rs460 per 20kg bag, provided millers supply 50 per cent of their grinding to local market at an ex-mill rate of Rs365 per 20kg.

But, the administrative failure to ensure 50 per cent grinding reaching local market has caused supply squeeze in the local market, pushing prices up. “There is no way one can track flour supplies to perfection and ensure 50 per cent supplies to local markets,” says an official of the Punjab food department.

Currently, the millers are selling maximum flour to buyers from the NWFP and Balochistan as it gives them around Rs100 per bag extra. Even, in local market, full supply is only given to those dealers who pay around Rs390 per 20kg bag. At official rate of Rs365 per 20kg, hardly 20 to 30 per cent supplies are provided, he said.

“It naturally translates into squeeze in local market. The department has recently withdrawn its officials from check-posts that monitor wheat and flour movement because police was ignoring their presence and helping flour travel out of province. The departmental officials were neither able to check the police nor movement of flour but were getting the flak. Now personnel from the revenue department are heading these posts. It shows the kind of administrative powers that the department can exert,” he said.

Confirming 50 per cent cut in supplies, Habibur Rehman Leghari, chairman of the Pakistan Flour Mills Association (Punjab Chapter), said that district coordination officers were to be blamed for the situation. Ignoring the decision of the Punjab government allowing 50 per cent of grinding going to NWFP and Balochistan, they were hindering supplies to both the provinces.

“The millers, if not allowed to send supplies outside Punjab, stop local supplies as well,” he said.

It naturally reduced local supplies and created panic in local markets. The millers could not purchase wheat at Rs780 to Rs800 per maund and supply flour at Rs365 per 20kg when wheat alone cost them around Rs400 per 20kg, he said and added: “At the heart of current crisis lies the ever-increasing wheat price in local market. The government is keeping a lid on flour supplies because of social reasons, which, unfortunately, belie market logic.”

He said if the government wanted to keep flour price under control, it must start releasing at least 8,000 tons of wheat daily. Otherwise, flour price would keep rising. The millers, he said, were bound to sell flour at Rs365 per 20kg only till July 29. A four-member committee comprising millers and departmental officials had been formed, which would calculate flour cost and present it to the provincial government by July 28.

“The new price of flour will be finalised in a meeting between the millers and the department on July 29,” he said. This market aberration would be corrected by the end of this month, improving market supplies in the first week of August, he hoped.