LAHORE: The Pakistan Flour Mills Association (PFMA) on Saturday increased prices of 20kg bag by yet another Rs15 – seventh such increase in the last 10 weeks – raising price by a total of Rs75 after Ramazan.

First six increases were of Rs10 each and the seventh one has been of Rs15 per bag, taking retail price from post-Ramazan Rs695 per bag to current Rs770. Though the PFMA called it “market correction,” but commoners thought it was killing – taking food inflation to new highs.

Justifying the increase, Asim Raza of PFMA claimed that wheat price had gone up from Rs1,200 per 40 kilo after Ramazan to Rs1,350 on Friday – leaving the millers with no choice but to pass increase on to consumers.

Agreeing that it was the seventh increase in the last 10 weeks, he said the millers had only been reflecting the slow increase in wheat.


Seventh raise takes price from post-Ramazan Rs695 to Rs770


“The current ex-mill rate of Rs750 is closer to notified price,” he said and added: “The government had notified Rs765 ex-mill price when it was releasing wheat at the rate of Rs1,330 per 40kg. The current market price has jumped to Rs1,350 per 40kg – Rs20 more than the official release price when the government allowed Rs765 ex-mill price, which means that the current ex-mill price is still Rs15 less than what the government had allowed. The flour price had dipped because of lower rates of wheat in the open market. With market drying up, wheat rates are increasing and the market is just correcting itself.”

This logic, however, fails to impress many. “The country is awash with wheat; the government has over eight million tonnes of wheat stocks, how can such an excuse so consistently be used to raise prices of the staple, or industry be allowed to use,” said market analyst Sarfraz Malik.

“When the PFMA says that the government has fixed Rs765 ex-mill price at release price of Rs1,330, it also means that market has crossed over by Rs20 per 40 kilo but ex-mill rate is still Rs15 less than what the government has allowed. It also means that there is still Rs25 difference, which may soon be bridged by the industry – especially if it remains unchecked, as has been the case for the last 10 weeks,” he said.

Published in Dawn October 4th, 2015

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