“Imagine trying to extract apple juice from a concoction of apple, lemon and carrot juice,” laments Raza Abbas, director of Rehmat Flour Mills, explaining the challenges of standardisation that millers face in supplying flour to downstream industries.
Wheat has different varieties and its quality depends on properties such as protein, gluten and ash content, water-absorbing capacity and so on. For example, the protein content requirement for bread and buns is about 10-12 per cent but for biscuits, it is around 8pc since cookies don’t need to rise as high. Since there are no procedures set for standardising wheat, there is no way to differentiate the good from the bad.
A different seed variety is sown on every acre, says an industry insider, explaining that flour results vary depending on the type of wheat grown. Sindh, owning to climatic conditions, tends to grow high-protein, high-gluten wheat which is strong but weakens further down in the South.
The problem is compounded by the involvement of brokers ie arthis, and the government — both of which procure from multiple farmers and mix wheat of different areas together during storage.
In government warehouses, wheat is sold in the form of kacha khatas or under the table. The difference in weight is then made up with a mixture of sand and stones, alleges an industry source. Wheat millers, aware of tricks and tips of the trade, have their own ‘setting’ with government officials that enable them to purchase specific ‘clean’ varieties of wheat at a premium.
The government has no incentive to invest in wheat standardisation, regardless of its benefits to multiple industries that require flour as an input
Imported wheat is assessed by the Grain Quality Testing Laboratories and is supposed to ensure standardisation. While the wheat grown in countries such as Russia and Ukraine is of generally lower quality than local wheat, it is standardised because the same variety is grown throughout.
In Punjab, some millers purchase directly from farmers with whom they work to ensure the wheat grown is standardised and of a desirable variety. While a lot of millers, especially in Karachi have not invested in silos, some in Punjab carry out random sampling when trucks roll in with wheat and then store its varieties according to its properties.
“Using testing, trial and error, enzymes and additives, we can standardise about 60-70pc of the wheat based on internal formulas,” says Mr Abbas explaining that his company’s specifications of properties are based on global standards and local requirements. However, it increases the costs by about 20-25pc to sort and standardise. “Over the years we have invested about Rs10 million (adjusting for the current exchange rate) to develop a lab high-tech enough for this purpose,” he says.
“Out of about a thousand flour mills, there are no more than 15 companies in Pakistan that have high-tech labs that can sort and standardise,” says Adil Zaffar, Managing Partner of distribution company Karam Kimya who has more than 10 years of experience in this field.
The change came about a decade and a half ago with the entrance of multinational food companies such as Pizza Hut and Unilever. At a higher price international companies imported standardised flour. Eventually, local companies developed their own labs to standardise flour and sell it at a premium of about Rs10-20 per kg, explains Mr Zaffar. At the corporate level, there are broadly five different types of flour: bread, pizza, pasta, cake and biscuits that have attributes specific to their nature.
“The bread, pizza, burger market is witnessing an organic growth of 10-15pc per year owing to urbanisation and upward mobility of the lower-middle-income groups. Thus, standardised high-quality flour is an emerging industry with a lot of potential,” he adds.
On the other end, flour mills operate on government quotas. Using rollers they crush flour, remove the bran and sell to end-consumers as the household atta which requires no standardisation except in cases of niche brand names that boast hygiene and quality standards.
To ensure wheat standardisation, the process must start before the sowing stage. Farmers need to be educated and provided with seed varieties suitable for local climatic conditions. Farmers able to grow high-quality wheat should be paid a premium instead of the across-the-board price fixed in Pakistan which is not an international practice.
The popular conversation around wheat has become completely politicised — minimum price, inflation and imports are all interwoven and made part of party agendas while its downstream uses and value-addition largely ignored. Thus, the government has no incentive to invest in its standardisation, regardless of its benefits to multiple industries that require flour as an input.
Published in Dawn, The Business and Finance Weekly, October 18th, 2021