Flour bag price touches Rs550, and counting

LAHORE: The millers on Thursday increased flour price by another Rs10 per 20kg bag – the third increase of Rs10 since last Friday that took the price of a bag to Rs550 as the government plays the role of a silent spectator.

The retail price, which stood at Rs530 per 20kg bag on Friday last, touched Rs550, that is, a staggering increase of Rs30 in a week. The millers, meantime, forecast another raise of Rs10 in the next two days due to rising wheat prices.

The retail price of a 20kg flour bag stood at Rs370 during July last year, which has already gone up by Rs175 and threatening to go further up in the next week when the Punjab government starts releasing wheat even at higher than the present market rates.

The millers on Thursday said the current increase reflected only hike in wheat price in the open market. They were still to factor in increase in other utilities like electricity and diesel in the last one month, they added.

The government, on the other hand, thinks that the increase might not sustain as flour from those areas where wheat is still cheaper would start flowing into big cities.

‘The Rawalpindi millers unilaterally increased the flour price three days ago and flour from Attock and Chakwal started pouring in and the miller had to bring it down to continue having share of the market,’ explained Secretary Food Irfan Elahi.

Conceding that wheat price enhancement would reflect in the flour price, he said since the Punjab government had purchased the entire commodity, the market had run dry quickly. ‘The government is alive to the situation and reviewing it almost on a daily basis. It is waiting for the right time to start releasing wheat, and it might not be more than next week,’ he said.

‘In fact, the government is just waiting for the market price to go up to the point where it gets near its own release price,’ according to Majid Abdullah of the Pakistan Flour Mills Association.

He said the government would start releasing wheat according to its previous announcement at Rs1,050 per maund. The ex-mill rate in that case would touch Rs560 per 20kg; its current rate being Rs540. So, there is still a margin of Rs20 between the market price and what the government plans to release at.

The government, he said, would wait for the market to dry up further and wipe the difference of Rs20 out before start releasing.

A food department official said: ‘The government is avoiding wheat release for two reasons — for fear of increase in flour market price and hike in prices of millers’ stocks.’

If the department starts releasing wheat now, it would take prices up in those areas where wheat is still available at relatively cheaper price.

It would also increase prices to Rs1,050 per maund of those stocks that the millers had purchased at Rs950 per maund, he said while describing it as a balancing act between the market forces and keeping prices under control. link....