Another flour crisis looms over twin cities

Dealers association threatens to cease supply from Dec 6 if profit margin remains low

Qaiser Shirazi December 05, 2021

RAWALPINDI:

The twin cities of Islamabad and Rawalpindi are in danger of being engulfed by another round of flour crisis, as the dealers association decried their low-profit margin and threatened to stop supplying 10kg flour bags.

The association has rejected the instructions of the government regarding the supply quota of the essential commodity. The government had issued directions to supply 70 per cent 10kg flour bags and 30 per cent 20kg bags.

The dealers said that their profit margin in 10kg flour bags is negligible; almost equal to a loss for them. Hence, they have demanded that only 20kg flour bags be supplied to consumers.

To reduce transportation costs, they also demanded that the district administration and food department to ensure an adequate supply of flour for them from the mills established in the inner city areas of Islamabad and Rawalpindi.

Supplying flour to Rawalpindi from mills in Taxila, Wah Cantt, Mandra, and Gujjar Khan add up to the transportation cost, said the dealers.

Flour Dealers Association President Zahoor Bhatti said the government has given a subsidy on a 10kg flour bag. He said the ex-mill rate of a 10kg sack is Rs540, while mills additionally cut Rs2 per bag in the name of carriage charges.

Read FDA halts supply of 10kg flour bags

He went on to say that the 10kg flour bag is then supplied to the retailers at the rate of Rs550, which for them is an extremely low-profit margin.

Bhatti said that they are ready to sell 10kg flour bags if the retail rate is fixed at Rs560, failing which they would stop the supply from December 6.

On the other hand, the ex-mill rate of a 20kg flour bag is Rs1,075 and its retail rate is Rs1,100, which is profitable for dealers as well as retailers, said Bhatti.

He added that they have to pick up subsidised flour bags from distant tehsils, which increases their transportation cost.

Published in The Express Tribune, December 5^th, 2021.