Wheat supply

The endless tussle between the government and mill owners over wheat flour supply continues, with mills going on strike in three provinces. The mills have stopped producing or supplying wheat in Punjab and other provinces. Though there is not a critical shortage of flour for consumers right now, a prolonged strike could change the equation. Even Food Security officials — while trying to downplay the issue by saying there is not an imminent danger because Ramazan and the Covid-19 coronavirus pandemic have lowered demand — admitted markets only have a supply of three to four days.

Another problem is that while the Covid-19 lockdowns worked to lower demand due to changes in eating habits, they have also affected production. Given that the provincial food departments have not yet met their purchasing targets, moving forward, this could create further supply issues in the coming weeks and months. The mill owners perceived sleight in the number of raids being carried out by government bodies, including district governments and provincial food departments. They also claim that the ban on open market purchasing and interprovincial supply of wheat is not acceptable.

But the government has also suggested that price is the real issue. Punjab authorities are trying to get mills to sell 20kg bags of flour for Rs805. Mill owners, however, say that with the price per maund of wheat in the markets at around Rs1,600, or Rs800 per 20 kg, they cannot sell flour at that price i.e. Rs805. The Food Department in Punjab, the most populous province, is already behind on its wheat purchasing target. The goal was 4.5 million metric tonnes by the start of June, but only 3.5 million have been procured so far.

Given the fact that there are only around two weeks left, and even fewer working days due to the upcoming Eid holidays, food officials need to act soon. Otherwise, those three to four days of flour are going to be baked off very quickly. 

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

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