Punjab flour mills: Price of 20kg flour bag increases by Rs85 in Punjab

Mill owners increase price of staple by Rs4.25 per kg on pretext of rise in cost of grain, power tariff, and diesel.

LAHORE:

The Punjab Flour Mills Association (PFMA) has increased the price of a 20kilogrames (kg) bag by Rs85 or Rs4.25 per kg.

The PFMA has taken the step in the wake of increase in the wheat price in the open market and the Punjab Chief Minister’s decision of not allowing an increase in the flour price despite the recommendations of the committee headed by his senior adviser Zulfiqar Khosa.

The association has informed the food department and the district coordination officers across the province that the ex-mill price of the 20kg bag will be Rs650 (32.5 per kg) and it will be sold to consumers at Rs675 (33.75 per kg).

The letter by the PFMA chairman Abdul Jabbar has said that the government had increased the support price of wheat, for the 2011-12 crop, to Rs1,050 per 40kg from Rs950.

The official procuring agencies and the open market traders were buying grain from growers at Rs1,050 per 40kg or 26.25 per kg. Previously, the mills were buying wheat at Rs23.75 per kg and selling flour at Rs28.25. Now, they are buying grain at Rs26.25 per kg and want to sell flour at Rs32.5. Apparently they want to increase their margin from Rs4.5 per kg to Rs6.25 per kg.

Abdul Jabbar said the association was demanding an ex-mill price of Rs625 for the past many months, but when the government has stopped selling wheat to flour mills and they were purchasing it from the open market, the price of the 20 kg bag of flour will be Rs650 instead of Rs565 and its retail price will be Rs675. The association maintained that the government has not increased the flour price in the last two years, while the prices of electricity and diesel have increased manyfold during this period.

The government established a committee under the chairmanship of Zulfiqar Khosa a few weeks ago, that tried to convince the flour mill owners to defer increasing flour price till the end of Ramadan. The provincial government wanted to avoid public backlash.

Asim Raza, Liaquat Khan and Mian Riaz, representing the flour mills of the province, had met with secretary food Irfan Ali and informed him that sale of flour at old prices was not possible anymore. Asim Raza and Mian Riaz told The Express Tribune that the association has been informing the government that the flour mills were under pressure and any effort to freeze the price of the flour at a certain point will create a crisis.

Published in The Express Tribune, May 18^th, 2012.