DCs’ negligence reason for flour price hike

Sources say they are responsible for procuring wheat for flour mills at state-approved prices

Rizwan Asif June 25, 2019

LAHORE: Negligence by Punjab deputy commissioners (DCs) and their lack of coordination with the provincial food department has exacerbated an already tense situation with regards to the price of flour in the province it seems.

The DCs, in addition to other tasks, are responsible for procuring wheat for flour mills on state-approved prices. According to sources, however, the DCs have not even issued a notification in this regard as of yet, opting instead to pin the blame for the hike on the food department.

Now, the Pakistan Flour Mills Association (PFMA) is demanding authorities immediately determine new prices for wheat and flour supplied by the government, which is currently being sold at rates set a year and a half ago despite the drastic increase inflation, electricity and fuel prices and the dollar rate.

Taking note of the issue, the food department has agreed to meet PFMA representatives to resolve the matter peacefully through consensus and a meeting is expected today, sources said.

Punjab’s flour mills currently procure between 4.5 million and 6.5 million tonnes of wheat from the food department and between one million and 1.2 million tonnes from the private sector. As per prices set by the food department in 2018, a 20kg bag of wheat costs wholesalers Rs738 and retailers Rs760. Flour mills, meanwhile, could pick up a 40kg bag of wheat for Rs1,300 under the state-approved rate. Rising inflation, however, has resulted in the price for a 40kg bag of wheat soaring to between Rs1,420 and Rs1,460.

Under the government’s formula, the price of a 20kg bag of flour is arrived at by halving the open market price of a 40kg wheat bag and adding a Rs100 grinding charge. The food secretary is responsible for calculating this price only when the wheat is sold by the government. In all other cases, the price must be determined by the relevant DC and announced through a notification. As the food department is not currently providing wheat to flour mills, the DCs are supposed to notify revised wheat prices in their respective districts.

According to PFMA sources, the association wants the Rs100 grinding charge increased by Rs10 due to the hike in electricity, fuel and other costs. The rise in dollar rates means that the cost of imported machinery and spare parts has also shot up.

Published in The Express Tribune, June 25th, 2019.


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