LAHORE: As decided, the millers stopped grinding of wheat on Thursday, suspended flour supplies to the market and promised to continue strike for Friday (today) as well – an act that could create a gap of over 70,000 tonnes in the supply chain.

According to the millers, their units roughly grind 20,000 tonnes in Punjab and another 15,000 tonnes in the rest of Pakistan. The market may not feel the pinch immediately as the supply contains enough quantity to sustain demand for two to three days.

“However, the pressure would start building up by Monday,” warns a miller from the city.

The mills, he said, stopped wheat washing on Wednesday and did not grind anything on Thursday. Both days would cost the market around 70,000 tonnes. Then there is Sunday a day after, which means deficit of another 35,000 tonnes. Cumulatively, over 100,000 tonnes of supply gap would be created in next four days that would start biting the market at the beginning of the next week, he warns.

Market may feel the pinch next week; PFMA hurriedly postpones presser

Meanwhile, the Pakistan Flour Mills Association (PFMA), which was in touch with the government to solve the tax issues, called a press conference on Thursday afternoon but hurriedly postponed it.

According to insiders, the government had assured the millers of resolution of issues (withdrawal of both general sales tax on bran and increase in turn-over tax) after the passage of the budget. However, the millers wanted the federal government to notify the withdrawal first. “Only a formal notification would satisfy us,” says a miller, who did not want to be named because negotiations are still on.

In 2017, the government slapped tax on bran [choker] but later promised to withdraw it. The millers are still receiving the tax notices from the authorities, citing absence of the notification. Even now, the government officials are tweeting withdrawal decision and also releasing news to the media about resolution but the millers are insisting on the formal notification and that is where negotiations are stuck right now, he reveals.

According to mill owner Majid Abdullah, the millers did not wash wheat on Thursday as well. It means that there would be no grinding on Friday as well because wheat needs 10 to 15 hours gap between washing and grinding. One hopes that the millers and the government find a solution quickly before flour markets turns topsy turvy.

“Because, if three to four days supply gap is created in the chain, it takes as many days to recover as well. The situation is normally more precarious during the first week of the month, when a majority of people buy their monthly grocery and flour demand goes up substantially. The millers have threatened to go on strike from June 30, which could destabilise flour market in early July.”

Published in Dawn, June 25th, 2021

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