ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday expressed serious concern over ‘artificial hike’ in prices of key kitchen items, particularly wheat flour, and decided to call an urgent meeting with representatives of provinces so that corrective steps could be taken.
The ECC meeting presided, over by Prime Minister’s Adviser on Finance Dr Abdul Hafeez Shaikh, also decided to continue with a ban on export of wheat and wheat flour and ordered a stocktaking of wheat in the provinces.
Sources said at least two senior cabinet members — Dr Shaikh and Railways Minister Sheikh Rashid Ahmed — challenged the data presented by Ministry of National Food Security and Research (MNFSR) regarding prices of wheat flour.
Dr Shaikh said he had received reports from many parts of the country, including the federal capital, that prices of wheat flour as well as other kitchen items like ghee, sugar and tea were on the rise. But there is no justification for the hike.
Two cabinet members challenge data presented by food ministry
The railways minister opposed the view that prices were stable in the market. He said the prices of wheat flour had increased by Rs70-100 per 40 kg in recent days and he had himself bought a 20-kg bag of flour for Rs900 even though the shopkeeper did not charge any profit.
“We can fool ourselves but cannot satisfy the people with the official numbers,” Mr Ahmed was quoted as saying during the meeting. He proposed that wheat stocks in the provinces should be re-checked to ascertain how much quantities were actually in the godowns and how much had been “consumed by rats”. Another minister chipped in and said that a minister from Sindh had reported that 400,000 tonnes of wheat had been “lost to the rodents”.
The MNFSR representative had put Sindh stocks at about 800,000 tonnes. The official said that as of early this month the total stocks, at 7.4 million tonnes, were about 30 per cent less than in the same period last year (about 10.7 million tonnes). However, the current stocks were more than sufficient for local requirement.
Mr Ahmed said that consumption of wheat flour generally increased significantly from November onwards and hence there was a need to be vigilant about supplies.
The meeting was told that Punjab government was releasing wheat to millers at a rate of Rs1,375 per 40 kg who often procured more wheat than their grinding capacity, to be able to sell surplus quantities in the market at higher rates. Some millers earned a whopping Rs10-20 million a month by selling the commodity without actually grinding it.
Another view was that the provinces seldom cared for the decisions of the ECC and they could only be requested to implement its decisions. At this, the ECC “decided to propose to the provincial governments to undertake a fresh stocktaking of wheat in godowns to ensure adequate supplies would be available in the winter season”.
Dr Shaikh instructed his own ministry “to call an early meeting of the National Price Monitoring Committee (NPMC) to assess the wheat and flour supply situation in different parts of the country, including the federal capital, in view of recent reports of rising prices of some core food items, including flour,” an official statement said.
An official quoted the prime minister’s adviser as saying that if the administration was unable to control prices in the federal capital, there should be some limit “to what should be expected from the provinces”.
He said that because the government was extending a subsidy on wheat and the price of natural gas for tandoors had not been raised, there was no valid justification for a hike in the price of bread, etc. He also expressed his displeasure that despite payment of Rs1.5 billion in subsidy on gas, why the naan and roti prices had not come down.
Interestingly, the commerce ministry officially notified a ban on export of wheat and wheat flour on Sept 11 through an amendment to its 2016 export order even though the ECC had ordered the ban on July 17 which was ratified by the federal cabinet on July 25. The MNFSR had issued a notification for ban on export of wheat and wheat flour earlier, but that remained ineffective because of a legal lacuna.
Published in Dawn, September 19th, 2019