The flour crisis

The opposition is up in arms over the fact that the PTI government failed to prevent a flour crisis. In the past week what we have seen is that the price of the commodity has soared to Rs70 per kg – which is being attributed to a shortage of wheat. Not every one is convinced. Opposition leader Shehbaz Sharif has demanded that the PTI inform the nation about the “real reasons” behind the crisis. Shahbaz Sharif raised the question that if there were any problems in the supply, why was it not addressed in time. Alluding to some of the “real reasons,” PPP leader Bilawal Bhutto said that the federal government is responsible for the crisis as it sent 40,000 metric tons of wheat to Afghanistan.

What we do know is that the hike in the price of wheat flour in Sindh has taken a turn for the worse amid allegations of hoarding.  And the situation in Balochistan is no better. Apart from hoarding, smuggling of Sindh’s flour to Afghanistan via Balochistan is seen by many as a reason for the crisis in the province. It is believed through market sources that about 100 to 150 trucks of flour are smuggled from Karachi to Afghanistan via Balochistan every day. Flour mills say they are helpless. While they display the price of 10kg flour bag at Rs430 (Rs43/kilo), they are not selling it at that price. In Karachi’s Jodia Bazaar, the wholesale rate for a 50kg bag is being sold at Rs2,900 to Rs3,000 (Rs60/kilo).  Traders in the market say that enough wheat stock is hidden in the warehouses in Sindh but flour mills increased the prices on the pretext of wheat shortage. Someone is minting millions.

Sensing the seriousness of the situation, the PM has ordered a countrywide “grand operation” against wheat hoarders and profiteers after the flour shortages ballooned into a crisis. The four provincial chief secretaries are to launch the grand operation to net wheat hoarders and seal their granaries. But these well-meaning and yet ineffective bureaucrats do not know where to begin. In some instances, the people they report to are part of the problem. It may be recalled that this is the second time the flour price has gone up as earlier the rates rose by Rs20 per kilo. Though the earlier price upsurge was not unexpected, the current crisis, the government believes is artificial, created by hoarders in an attempt to mint money. Or those who are close to the government.

The Economic Coordination Committee (ECC) of the Cabinet had placed the ban on wheat export on Jul 17, 2019. Yet, according to the Pakistan Bureau of Statistics, from July to October 2019, 48,083 metric tons of wheat was exported which earned Rs1.82 billion. This gives credence to the view of some who say that it is neither hoarding nor illegal exports is the real issue. The reason for the crisis is mismanagement. Surplus wheat is available in Pakistan but it is not reaching the areas where it is most needed. This is because Punjab won’t share its wheat with Sindh.  The ECC had set a procurement target of 4 million metric tons of wheat for Punjab but the actual procurement was 3.3 million metric tons, roughly 18% less than the actual target. Similarly, the ECC had set a procurement target of 300,000 metric tons of wheat for Khyber-Pakhtunkhwa but the actual procurement was 37,000 metric tons only. What is interesting is that Sindh and Balochistan did not procure any wheat.

The Pakistan Flour Mills Association in Balochistan has accused the provincial food department of creating wheat crisis in province, which has increased the price of 100kg flour bag to Rs5,500 (Rs55/kilo). Sharing grievances of the association, the regional president has said that half of the flour mills have been closed in Balochistan due to flawed policies of the government. While Sindh and Balochistan do not matter in the grand scheme of things, if this crisis reaches Punjab, we can see that the government will come under great pressure. So far, apart from the grand operation that the PM has ordered, nothing except for accusations seem to be making any headlines. Pakistan’s staple diet comes from flour. Any change in price in flour directly affects the country all over. Let us hope the government controls the situation.

 

Published in The Express Tribune, January 20^th, 2020.

Like Opinion & Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.