April 01, 2008	Tuesday	Rabi-ul-Awwal 23, 1429

KARACHI, March 31: Wheat prices in the open market in Lahore, Karachi and other places started crawling up on Monday and it was quoted at Rs1,640 to Rs1,660 for a 100kgs bag, warranting immediate government intervention before the situation slips out of control as retailers too are preparing to raise flour prices.

“In Lahore, wheat is being quoted at Rs1,650 for 100kgs,” Bilal Sufi, a senior leader of the milling industry and adviser to Pakistan Flour Mills Association, informed Dawn by telephone on Monday.

The price of wheat flour, he said, normally is Rs4 above the wheat price as it takes into account grinding charges and financial and handling cost.

Wheat prices in Karachi are being quoted between Rs1,640 and Rs1,660. Prices are going up in the market following prime minister’s announcement to raise wheat support price to Rs625 for 40kg (roughly Rs15.60 a kg) from Rs510 for 40 kg (Rs12.74 a kg).

The prime minister announced the official support price, but the government is yet to come out with an official issue price on which wheat is released from government stocks to flour mills, incorporating subsidy and other costs.

“The market is abuzz with all sorts of rumours,” a grain merchant of Jodia Bazaar said. There are rumours on crop shortfall, suspension of wheat from government stocks to flour mills from April 15, and about new issue price of wheat which may be Rs20 per kg (Rs800 for 40kgs and Rs1,200 for 100kgs).

While there is confusion in wheat market after the announcement of new support price, the Sindh government has started its procurement drive afresh as earlier it failed to get a positive response from farmers in Mirpurkhas and other parts of lower Sindh at Rs510 for 40kg fixed by the caretakers.

“The government will now have to take a prompt decision on issue price of wheat,” a market analyst said, who compared the present situation with that of 1997 when soon after elections Nawaz Sharif government raised the procurement price of wheat.

“The manipulators then also took full advantage of the confusion and created a serious crisis that saw burning of flour mills and plunder of wheat stocks,’’ he recalled and warned that if left unattended, the present confusion in wheat market can turn into a crisis of an alarming magnitude, the glimpse of which was seen in last week of December when food godowns in Karachi and other parts of Sindh were attacked and looted.

The government will have to make a quick assessment of crop to decide on import of wheat.

“If at all there is a shortfall, the import orders should be placed in the next few weeks when international rates are relatively lower,’’ he said.

The government should ensure a stock of at least seven million tons and that mills be released stocks from August to ensure that there is adequate supply of wheat and wheat flour in September when Ramazan falls.

Elected leaders from PPP and PML-N have dropped hints of working out arrangements to provide good quality flour to people from low income groups.

“The system should be transparent and subsidy should benefit the low income group,” is another advice being given to the government.

For long, the decision-makers and bureaucrats have treated Afghanistan’s demand for wheat as part of Pakistan’s market which has created confusion.

The Federal Ministry of Food, Agriculture and Livestock (Minfal) should not indent Afghanistan’s wheat requirements with Pakistan but should calculate it separately.

For decades, many political and business families of the NWFP thrive on wheat and wheat flour smuggling to Afghanistan and beyond.