December 01, 2007	Saturday	Ziqa’ad 20, 1428

PESHAWAR, Nov 30: The NWFP may face a severe flour crisis because of a rise in flour prices in Punjab and its unabated supply to Afghanistan. Dealers told Dawn on Friday that a 20kg bag of inferior quality Punjab flour was being sold at Rs390 in the local wholesale market while its retail price ranged between Rs410 and Rs450. Similarly, a 20kg bag of fine quality Punjab flour is available at Rs420 in the wholesale market while its retail price is Rs460-480.

They said that price fluctuation in the local market was mainly because of an increase in ex-factory rates in Punjab.They pointed out that flour mills in Punjab produced two types of flour, one for their local consumption and the other for the NWFP, Afghanistan and central Asian states.

“Flour supplied to the market in Punjab is cheaper than those given to us because the Punjab government has extended subsidy on it. The flour given to the NWFP and markets outside Punjab is prepared from the wheat which the millers acquire from the open market on comparatively high prices. This means that consumers in the NWFP have to pay at least Rs1-2 higher than the people of Punjab and Sindh,” said Altaf Hussian, vice-president of the Food and Grain Dealers Association.

He said that flour mills in the NWFP obtained wheat from the provincial food department at subsidised rates, but they did not even provide a single 20kg bag of flour to the local market and instead supply it to Afghanistan to make extra profits.

On the directives of NWFP chief secretary Sahibzada Riaz Noor, fair price shops have been set up in different parts of the province where flour mills are supposed to sell a 20kg bag of flour at Rs305. The government for this purpose releases 1,500 tons of wheat to the millers on a daily basis.

However, consumers and dealers complained that the mill owners did not provide a single bag of flour to the fair price shops and continued to export it to Afghanistan where it was sold at Rs500 per 20kg bag.

All Pakistan Flour Mills Association (NWFP chapter) chairman Naeem Butt attributes the crisis-like situation in the province to ‘irrational’ policies of the provincial government.

He said that in 1994, the government used to provide 5,000 tons of wheat to the local mills on a daily basis, but it had now reduced the daily quota to 1,500 tons mainly to save subsidy on it.

He said that daily wheat requirement of the mills was 8,000 tons. He said that in 1994, the government used to give Rs3 billion subsidy on wheat annually in order to keep the prices of flour within justified limits, but it had now been reduced to just Rs90 million which also included administrative cost of the food department and its allied agencies.

Mr Naeem pointed out that the annual wheat requirement of the NWFP was 3.2 million tons, of which 1.1 million tons were produced locally while the remaining 2.1 million tons were procured from other sources.

“Of 2.1 million tons, the provincial government only procures 0.25 million tons and leaves the consumers at the mercy of Punjab flour mills,” he added.

He said that to keep the flour industry operational, the mills owners had no option but to buy the commodity from the open market of Punjab where its prices were much higher than the subsidised one.

He conceded that most of the flour produced locally was exported to Afghanistan. “If daily requirement of the province is 8,000 tons and the local mills are given just 1,500 tons, the consumers cannot get the required quantity of flour from the fair price shops,” he added.