|
|
|
| November 4, 2005 | Friday | Shawwal 1, 1426 |
Wheat to be released after Eid: Punjab CM
LAHORE, Nov 3: Chief Minister Pervaiz Elahi assured millers on Wednesday that the Punjab Food Department would start releasing wheat two days after Eidul Fitr. The millers, who called on him to present a Rs10 million cheque for the ongoing relief work, asked for early release of wheat.
The chief minister promised the wheat issuance, but did not make any commitment on price and quantity. The issues would be decided by the department.
The department officials, however, think that the price should be around Rs430 per 40kg and quantity around 18,000 tons on a working day. The final figure would be negotiated prior to wheat release and both figures would remain flexible.
The ex-mill price (at which the millers sell flour to dealers), is also a problem to be solved. The millers have been demanding a release price of Rs252 per 20kg against the present Rs242 per 20 kg.
According to the existing formula, the millers had an ex-mill price of Rs233 when they were getting wheat at Rs400 per 40kg from the department. By that formula, Rs15 per 20kg should be added if the release price goes up by Rs30 per 40kg and price be fixed at Rs248 per 20kg. But the millers have been asking for four extra rupees on the account of inflated input costs.
They claim that present formula was worked out some five years ago and input cost has risen substantially during these five years. The new price must price, they maintain, must reflect this inflation.
The government, however, is reluctant to concede additional Rs4 per 20kg in one go because of social and political cost of further price rise. Both sides plan to hold another round of talks to thrash out the issues afflicting the price mechanism.
Meanwhile, the wheat market remains stable around Rs440 in Lahore and at varying prices in different cities. The private sector has over 500,000 tons of wheat according to the figures provided by State Bank of Pakistan, based on commodity financing by commercial banks.
The government had been delaying wheat release basing its hopes on private wheat and millers’ stocks.
“The millers have been demanding only what became due to them in the last five years,” says an official of the PFMA. The cost of input has risen manifold during the last five years and a look at the petrol prices would explain millers’ claim. It has raised the cost of transportation by at least 25 per cent. So are labour charges of loading and unloading. Take all these factors into account, and the millers’ demand does not seem out of context.
The millers are also aware of social and political cost attached with the price of flour, especially for the ruling political party. The government should also try to control prices of input, if it wanted to get involved in price of output, he said.
“There is no doubt that millers’ cost has increased to a certain extent during the last five years,” says an official of the food department. They may also be accommodated to some limit, but they could be given the amount they had been asking. People cannot be put to double pressure of rising price.
On the one hand, price is going up because increase in support price would be reflected in the price, and on the other hand rise in input cost in five years could not given to millers in one year. The final talks in this regards would be held in the next two days, he said.
|
|
|
|
