Flour crisis looms over country

Mills have reduced wheat procurement fearing possible fall in prices

LAHORE:

A flour crisis looms over the country with the government locking up the wheat in its coffers as well as its expensive rates amid shortage in the open market.

Sources told The Express Tribune that flour mills had reduced the procurement of wheat and milling fearing a possible fall in its prices. There is also a risk of a flour crisis if the gap between supply and demand widens.

However, government sources claimed that there was an abundance of wheat and a new policy would be announced soon. They maintained that there would be no flour crisis.

Despite the increase in flour prices up to Rs1300 in Punjab, its availability is not stable.

The sources said that the government had started final consultations on early supply of the wheat in its stock to the flour mills.

The supply of government wheat to the flour mills is likely to start this month instead of June.

The sources said the prime minister had decided in principle to reduce the open market flour prices by between Rs200 and Rs300 per 20-kg bag.

The government is considering setting the price of a 20-kg flour bag between Rs1,000 and Rs1,100.

According to sources, the government will bear a subsidy of more than Rs600 per 20-kg bag for providing cheap flour to the people.

The government has also started consultations on wheat imports to strengthen the country's reserves.

The Punjab Food Department has so far procured 4.1 million tonnes of wheat. It has also launched a crackdown on hoarders to meet the target of five million tonnes.

A day earlier while addressing a public gathering in Shangla district of Khyber-Pakhtunkhwa, PM Shehbaz had asked the chief minister there to announce a reduction in prices of flour in line with the prospective strategy in Punjab. He had added that he would do it at the Centre’s expense if the provincial government failed to do so.

The Prime Minister's Office had said wheat production was projected to be 26.173 million tonnes against a target of 28.89 million tonnes while the estimated consumption would be around 30.79 million tonnes.

The reasons for this shortage were reduced area under wheat cultivation, shortage of water and fertiliser, and delay in the announcement of support price. Among other issues were oil price hikes and an earlier-than-usual heatwave.

These reasons had led to a shortfall of 2% in production.

With input from agencies