LAHORE, May 6: The Pakistan Flour Mills Association again increased the flour price by Rs8 per 20kg on Thursday. The new retail price of a 20kg bag is Rs230 while the ex-mill rate is Rs224.
Only last week, millers increased the ex-mill flour rate from Rs208 to Rs216 per 20kg. According to officials of the association, the increase became inevitable as wheat price in the open market had gone up to Rs380 to Rs395 per 40kg.
It may be noted here that the price of a 20kg bag hovered around Rs170 and Rs180 last year. Bilal Sufi of the PFMA held the food department responsible for the second hike in a week.
He claimed that mills were not getting wheat from the open market because of daily threats of the department against buying in the private sector. Because of these threats, farmers and stockists have stopped bringing wheat to the market.
This has created a shortage and raised price of the crop. In these circumstances, the millers are left with no choice but to increase the price of flour.
The millers, he said, cooperated with the department in every possible way. They even agreed to restrict procurement. But, nothing seems to be working. Millers are left with no choice but to raise the price.
The increase would be implemented immediately and there was no chance of it being withdrawn unless the market situation eased, he said. Officials of the food department, however, were hopeful that millers would take back the decision as the market price did not go up as much as they claimed it had.
They increased the price last week by quoting a wheat price of Rs380. Now, they were themselves saying it was still the same with some minor differences depending on the location. The recent increase was unjustified and millers would be made to take it back, they said.
They also accused the millers of trying to fill the gap left by other players in the private sector. The millers know that the government is going after hoarders and stockists.
It has naturally drilled a gap in the wheat market, which the millers are trying to take advantage of. But, the department is determined to foil all such attempts, he said.
"The millers know that they would not be able to make windfall profits like last year once the department procured enough wheat," says one of the official. Now, they are desperate to maximize their profits before the food department is able to stabilize the market through massive releases. This is a propitious time for millers, or at least they think it is, and they are trying to increase their profits to new limits.
The wheat market would remain turbulent for another two weeks as the department achieves its targets and takes care of hoarders and stockists. Till then millers might be able to squeeze some money out of people. But, they would not be able to continue their monopoly once the department has its stocks.
