PFMA demands early release of wheat quota to check price hike
LAHORE: The Pakistan Flour Mills Association (PFMA) has demanded immediate release of wheat quota for mill-owners to check increase in flour prices.
“[The] government should release wheat for mills from official storage and reassess the flour price. The initiative will help decrease the prices of flour in the market by at least Rs200/20kg bag,” PFMA chairman Asim Raza Ahmed said, while talking to BOL News.
There are around 930 flour mills in the province, many of which depend on the official wheat quota for their operations. The officials expressed the hope that the issue price of wheat will be around Rs1,875/40kg, while in the open market, it is being traded at around Rs2,000/40kg. The flour price was fixed at Rs860/20kg bag when the food department was issuing wheat from the official storage at Rs1,475/40kg, he added.
“The government increased wheat support price from Rs1,400 to Rs1,800/40kg this year. Now, the government is likely to release wheat to the mills at Rs1,875/40kg. With the change in wheat price, the official rate of flour will also be revised. It will be from Rs1,055 to Rs1,070/20kg bag. Early release of wheat quota and determination of new flour price will help control the black marketing of essential commodities,” Ahmed said.
He said the initiative would immediately decrease the price of a 20kg flour bag by around Rs200, adding that the food department has enough wheat stocks to meet the requirements of the province till the arrival of the next crop.
To a question why immediate release of quota was required when the mills have their own stocks purchased at the same support price, he said, most of the mills were procuring wheat from the open market after exhausting their existing stocks.
“[The] mills are buying wheat at higher rates from the open market. This is the reason for higher flour prices,” he said, adding that presently only 200 mills have some wheat in their stocks.
“[The] mills had taken loans for procurement of wheat. [The] bank markup coupled with storage cost had even made already procured wheat more expensive,” Ahmed said, adding that the provision of subsidised wheat would help minimise the losses of the mills.
The PFMA had already informed the government about the prevailing scenario and suggested possible measures to check the increasing price of flour in the market.
“We had written a letter to the government around 25 days ago,” he said, adding that it was up to the people at the helm of affairs to take the final decision. The food department officials had conveyed that a summary had been forwarded to the Punjab Chief Minister Usman Buzdar for the final decision.
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