Demand for imported wheat plummets

Flour price drops after arrival of fresh produce from Sindh

LAHORE:

The imported wheat market has crashed after flour mills of Punjab reduced its purchase by 90 per cent because the grain grown in Sindh became cheaper.

The price of imported wheat has decreased by Rs160 and the domestic produce by Rs400 per maund.

On the other hand, farmers' organisations have demanded that the federal government should not extend for the third time the deadline of March 31 for ships arriving with imported wheat. They said the lenience would cause irreparable loss to the farmers as the indigenous wheat had started coming to the market.

After the reduction in wheat prices, the price of a 20kg flour bag in Punjab has dropped by Rs80, while further reduction is expected in coming days.

Meanwhile, the final announcement will be made next week regarding the government procurement of wheat in Punjab. The procurement target will be decided by the provincial cabinet, which could be between two million and three million tonnes.

Also, the food department has suggested that the area limit for wheat bag acquisition should be set at 10 acres.

It suggested that not more than 60 jute or 120 PP bags should be issued to a person. The delivery charges to farmers should be reduced from Rs60 to Rs30 per sack.

The department has prepared a mobile application for purchasing wheat as well as issuing the sacks.

The Punjab Food Department is estimated to have a carry-forward stock of around two million tonnes of wheat.

In another development, the food secretary has taken notice of the spoilage of wheat kept in government godowns in various districts and strict departmental action is likely in this regard.

Regarding the concerns of the growers, farmers' organisations say that if the purchase of wheat by the food department and flour mills is reduced, the prices of newly harvested wheat in Punjab may crash to as low as Rs3,300 per maund.

According to sources, there has been a significant increase in the arrival of fresh wheat from Sindh to Punjab, as well as a decrease in the arrival of imported wheat from Karachi.

In a few days,.the price of imported wheat sold in Lahore has decreased from Rs4,240 to Rs4,060 per maund and the produce of Sindh from Rs4,400 to Rs4,010, which is likely to decrease further.

The sources said flour mills in Karachi were getting imported wheat at Rs3,680 per maund, due to which they were not buying the wheat from Sindh, which, instead, was coming to Punjab.

Due to the continuous decrease in wheat prices, the prices of 20kg bags of flour in Punjab have come down significantly during the past two days. A bag sold for Rs2,640 to Rs2,750 has become cheaper by Rs80, while further reduction is expected.

According to the sources, after the formation of the Cabinet Committee for Wheat next week, the issue of government purchase of wheat will be presented to the provincial cabinet for a final decision.

The sources said it appeared that the food department would only purchase up to two million tonnes of wheat as it has a carry-forward stock of over two million tonnes, but the Punjab government will decide on the purchase targets.

So far, the food department has released 1.7 million tonnes of wheat to flour mills, which is less than last year's figure. The release has decreased due to import and higher price.

In previous years, the department gave sacks for wheat procurement to farmers without any consideration of the cultivated area, but this time it has been proposed that those the limit should be 10 acres.

Similarly, in the past, a maximum of 200 sacks were given to a farmer. It is now proposed to be reduced to 60 sacks.

The sources added that Food Secretary Moazzam Sipra, after inspection in different districts, has decided to take action against those responsible for spoilage of government wheat in godowns. He directed all the field officers to visit each godown and submit a report.

Meanwhile, farmers' organizations claimed that instead of 2.4 million tonnes, 3.1 million tonnes of wheat had been imported.

Now that the new wheat crop is ready, extending the date for bringing imported wheat for the third time would cause economic exploitation of the farmers, a representative of an organisation said.

Published in The Express Tribune, March 23^rd, 2024.