Govt to review wheat, flour prices

May not give subsidy of Rs42 billion to reduce price of flour bag by Rs30

LAHORE: The federal and provincial governments have decided to review their decision taken a few weeks back regarding determination of wheat and flour prices in Punjab.

The final decision regarding the prices will be made by Prime Minister Imran Khan who will be briefed on the matter in the next few days.  The government will also deliberate on the demand to end a ban on the export of wheat and wheat flour.

On Saturday, Punjab Food Minister Samiullah Chaudhry and Agriculture Minister Noman Langriyal along with Pakistan Tehreek-e-Insaf (PTI) leader Jahangir Khan Tareen discussed the matter with a delegation of Pakistan Flour Mills Association.
According to details, a few weeks back, Punjab Food Department had sent a summary to the chief minister upon which the government had decided that the wheat would be sold to the flour mills at Rs1,300 per maund including asking charges.

Deliberations were held on the matter by Punjab cabinet committee on July 25. However, some government circles said the flour in open market was being sold at Rs800 per bag and the people also had no issues with it.

Hence, just for political benefit, a subsidy of Rs42 billion should not be given by reducing the price of flour bag by Rs30 and the market should be allowed to function according to its mechanism.

Detailed consultations were held at the residence of Tareen, which were attended by Punjab agriculture minister, provincial food minister and Flour Mills Association central leaders Asim Raza, Hafiz Ahmed, Iftikhar Mato and Riaz Khan

According to sources, PM Imran will be told that the food department has 4.8 million tonnes of wheat, which it purchased from the farmers at a price of Rs1,300 rupees per maund. The per maund maintenance costs Rs487, and, hence, the total cost of per maund wheat comes to Rs1,787.

If the government decides to sell wheat at a price of Rs1,300 then it will have to give a subsidy of Rs42.61 billion on 3.5 million tonnes and this way, the price of 20kg flour in the open market will be Rs770.
If the government sells per maund of wheat at Rs1,325 then the burden of subsidy will be Rs40.43 billion and the per bag flour price will be Rs783.

In case the government sets the price of wheat at Rs1,350 per maund, the price of wheat will be Rs795 and the burden of subsidy will stand at Rs38.24 billion.If the price is fixed at Rs1,375 per maund, flour bag will be Rs808 in open market, while the government will have to give a subsidy of Rs36 billion.

If the government sets the price of wheat at Rs1,400, it will have to give a subsidy of Rs33.86 billion after which 20kg bag of flour will be available at Rs820.

Speaking to The Express Tribune, Punjab Food Minister Samiullah Chaudhry said consultations have been held and the final decision will be taken by the prime minister. “Whatever decision is taken, it will be made keeping in mind interest of the people and stability of market,” he said.