Government warns of action against overcharging flour mills

Sindh govt warns of stern action against flour mills and retail outlets involved in selling flour at higher rates.

KARACHI: The Sindh government has warned of stern action against flour mills and retail outlets involved in selling flour at rates above those prescribed by the administration. “We will take profiteers to task under the Sindh Food Grain Act,” said Sindh’s food secretary, Naveed Kamran.

“Mills are being provided flour at Rs2,550 per maund (40 kilogrammes),” he contended, adding that the provincial government had ample stocks to meet demand in coming months. Food department officials told The Express Tribune that there are about 1.5 million tons of wheat available with the provincial government.  Officials also asserted that the ex-mill price of flour is being held at Rs28 per kilogramme (kg) while the retail price has not exceeded Rs29.5 per kg.

However, market sources contend that the open market price for flour has reached Rs2,650 per maund while retail prices stand between Rs32 and Rs35 per kg.

“Prices in wholesale markets stand between Rs2 to Rs3 above ex-mill prices,” said Anis Majeed, President of the Karachi Wholesale Grocers Association. “Chakki (ground) atta rates are significantly higher at the moment and stand at about Rs36 in retail markets,” he added.

Flour mills threaten strike

Owners of flour mills have lashed out against the one per cent turnover tax and threatened to go on strike if the tax is not revoked immediately. Mill owners have blamed the tax and the recent hike in wheat prices for the increase in the retail price of flour.

Muhammad Yousuf from the Flour Mills Association has rejected the government mandated ex-mill price of Rs28 per kg and demanded that it be raised to Rs30 per kg. He said that the price declared by the government is impractical and a delegation of mill owners would soon meet the food secretary to convey its reservations.

While discussing the turnover tax, he declared it a ‘cruel’ decision that is destined to ruin the lives of the poor since the tax will raise the price of a 50kg bag of flour by Rs30. A meeting of the association has been called on September 28 to decide the course of action to be followed by millers.

Published in The Express Tribune, September 23^rd, 2010.