Import delay drives up wheat prices

Punjab flour mills buy millions of bags of imported wheat in advance

LAHORE:

Speculative trading has pervaded the wheat market in Punjab after sugar as hoarders have hiked the prices before the arrival of imported grain in Karachi.

The market price of a 100kg sack of wheat in the province has increased by Rs150 in the past three days.

The wheat price in Lahore has reached Rs4,730 per maund, Rawalpindi Rs4,790 andRahim Yar Khan Rs4,710.

Farmers, traders and flour mill owners expect that the prices will increase further.

According to market sources, speculators have tried to take advantage of a six-day delay in the departure of the first ship carrying wheat to the country from Russia. The ship was scheduled to depart on August 24 and reach Karachi on September 8, which will now arrive on September 14.

The second ship will arrive on September 19, the third on September 25 and the fourth ship will reach the Karachi port before September 30.

So far, importers have bought more than 600,000 tonnes of wheat from Russia.

Advance deals for the purchase of imported wheat are also being made and till now the flour mills of Punjab have purchased millions of bags of the commodity at the price of Rs10,700 per bag ex-Karachi port.

An official said the Punjab Food Department was also keeping a close eye on the market situation.

Provincial Food Secretary Mian Zaman Wattoo said the department would beginning releasing government wheat to flour mills next month.

He said there was a strong possibility of government wheat release under a liberal policy in view of private import and availability of the commodity in the market.

The secretary said millions of deserving families of Punjab would be provided cash subsidy under the BISP, while cheap flour would be provided in the market. However, the final decision in this regard has to be taken by the caretaker government.

The sources said the food department had suggested that the difference in the prices of a 10kg bag of flour produced from wheat procured from the government and private sector should not be more than Rs50 to discourage smuggling and pilferage of the government stock.

The market sources said millions of tonnes of government flour had been illegally transported out of Punjab due to the significant difference in the prices of government and private flour in the past, especially last year.

In several cities, including Lahore, a mafia used to collect government flour from shops and some flour mills, refine it in secret places and smuggled it at a profit of Rs1,000 per bag. In this regard, the food department had lodged several cases against a group called 'Shakeel gang' in Lahore.

The market sources said the business competition and the situation of supply and demand had prompted the mills not to increase the flour prices even though the wheat became expensive.

The flour mill owners expect that wheat prices in the local market will decrease after the arrival of imported wheat at the Karachi port next week. Therefore, increasing the flour price due to the temporary and artificial hike in wheat cost would be unjustified.

Published in The Express Tribune, September 6^th, 2023.