Millers foresee acute flour scarcity in Karachi

Pakistan Flour Mills Association (PFMA) has anticipated an acute shortage of flour solely in Karachi over the next couple of days after the city’s millers were denied wheat supplies despite the grain being available in excessive quantity nationwide. Talking to a group of journalists on Saturday, PFMA South Zone Chairman Chaudhry Amir Abdullah claimed that almost no wheat was available for the production of flour at Karachi mills.

He blamed Sindh government for the brewing flour crisis as it prevented millers from buying the grain from growers in upper Sindh. “This is the peak production season for the new staple crop of wheat in Sindh but Karachi mills have no grain to grind.” Besides, he said, the government backed off its commitment made in mid-March that it would provide 5 million bags of wheat and supplied only 525,000 bags (10.5%). “Wheat shortage is being observed only in Karachi.”

Abdullah added that if the situation remained unchanged, then they would hold a press conference on May 2 to announce their next course of action. “We will not give a shutter-down strike call… mills will automatically close down due to no wheat supply.” The United States Department of Agriculture (USDA) has estimated wheat production at 27 million tons in Pakistan in 2023- 24, up 2% from 26.40 million tons produced in previous year.

It also projected 3% growth in consumption, reaching 30.20 million tons and the gap would be bridged through carryover stocks from the previous year and the import of 2.6 million tons. The Sindh government on March 5, 2023 started a drive to procure 1.4 million tons of wheat from growers in the ongoing production season. However, it has yet to achieve the “tiny” target. “The slow procurement suggests it will deliberately prolong the drive till August,” he said, alleging that the government allowed hoarders to purchase wheat at the current price, who would later sell the commodity at higher prices at a time of crisis.

The Punjab government kickstarted its procurement drive on April 1 and met around 70% of the target of 3.5 million tons in less than a month. “It is expected to achieve the full target over the next 10 days and then allow free movement of the grain.” Abdullah elaborated that Karachi was 300-400 km away from wheat fields in Sindh, which was why it was denied access. “Mills operating in the rest of the province are close to the fields and smoothly producing and supplying flour.” He said the government had established check posts between upper Sindh and Karachi, where officials were allegedly taking heavy bribes to clear wheat-carrying trucks. Though the government has announced a wheat support price of Rs100/kg, “it is costing Karachi millers Rs120/kg due to bribes being given at check posts.” Abdullah demanded that the government remove the check posts and allow free movement of the grain to end flour crisis.

The PFMA chairman noted that imported wheat cost less at Rs93/ kg compared to Rs120/kg for the local commodity. Flour (No 2.5 quality) is being sold at Rs160-175/kg in Karachi and there is speculation the price will shoot up to Rs200/ kg, if wheat is not provided to Karachi millers. In mid-March, he recalled, the millers had called off a shutterdown strike after the government assured them of providing 5 million bags of wheat from the stocks of Pakistan Agriculture Storage and Services Corporation (Passco). It said it would initially supply 2 million bags, therefore, the millers paid Rs5 billion for the first 500,000 bags. The government, however, backed off and “our Rs3 billion is stuck now,” he said.