Though the new wheat crop harvest will begin around early March, with early arrivals taking place by February’s end as growers prepare for cotton sowing, the open market prices of wheat have started steeply rising over the past month and a half.

The price surge is now forcing consumers to buy expensive flour, despite the Sindh government’s downward revision of prices for roller flour mills and chakki owners, at the food department’s request. The cost of 100kg wheat bags was reduced from Rs9,500 to Rs8,000 in December 2025 under the Wheat Release Policy 2026 to align with the open market rate and stabilise grain and flour prices.

The present situation has once again raised serious questions over the government food department’s handling of the wheat supply chain ever since the state decided to procure a certain quantum of wheat this season. The food department, while holding off on releasing wheat stocks all November 2025, began releasing wheat in December only after a price revision, and not without their hallmark financial irregularities.

Usually, chakki and flour millers lift wheat from the food department by October every year. Until November 2025, however, they were comfortably buying healthy wheat from the open market, even on credit. This is when the food department found itself in a quandary: how to deplete carryover wheat stocks ranging from 1.2 to 1.3 million tonnes? Furthermore, the department conducted no independent verification of the quantity or quality of these three-year-old stocks, meaning adulterated or unhealthy supplies couldn’t be ruled out.

Both wheat growers and consumers — especially those among lower income groups — are losers in the whole wheat procurement process that is marred by corruption

Soon after the government announced it would procure wheat this year, unscrupulous elements in the food department exploited the situation by manipulating the market. The Sindh government had intervened in procurement — after a one-year suspension under IMF conditions — intending to back farmers via a support price. The food department’s handling, however, has frustrated these efforts.

When open market wheat stood at Rs9,500 per 100kg through early December 2025, 10kg of chakki flour sold for Rs1,250; now, consumers pay much more. Chakkis remain the principal source of food for the population in both rural and urban areas. Their whole wheat flour is more nutritious than millers’ flour, as roller mills mostly cater to weddings, bakeries, and restaurants with bulk supplies.

Chakki owners claim that wheat was sold for Rs5,500 around June-July 2025, before prices rose to Rs7,000, then to Rs8,000, and then to Rs9,500 per 100kg. After the price revision, the food department slashed its quota from 300kg per stone per day to 88kg per stone per day, forcing owners to buy expensive wheat from the market. The burden eventually falls on consumers, who pay more for grain; this price volatility can undermine food security. Recently, the district administration thwarted an attempt to transport 3,900 bags of 50kg outside Hyderabad, which had been issued in the name of a dysfunctional flour mill.

By January 23, a 100kg wheat bag was selling for Rs11,500, pushing the price of 10kg of flour to Rs1,400. This price included the cost of production. The math makes one thing obvious: both wheat growers and consumers — especially those in lower-income groups — were the losers in a process marred by corruption.

The differential between the issue price and the open market rate of wheat is pocketed by various players, including food officials, traders, politicians, and middlemen, who remain connected with procurement, release, and sale. Unfortunately, the processes of procurement and release have never been transparent.

Through the price revision, the Sindh government hoped that early releases would help maintain crop quality, free up storage space, and ensure affordable flour prices for end users. However, the trickle-down effect of this decision still eludes consumers. After buying the grain, the food department must also bear overhead expenses, including transportation, fumigation, rental charges, and bank markups.

The government procured wheat at a support price of Rs4,000 per 40kg or Rs10,000 per 100kg bag only in 2022-23. With miscellaneous expenses, the total cost reached Rs15,000 per 100kg. Currently, the government’s liability for past procurements stands at Rs176 billion, and it has reportedly borne a loss of Rs884m due to damaged stocks.

The surge in flour prices has persisted for some time. For the upcoming March harvest, the government aims to procure 1.2m tonnes of wheat at Rs3,500 per 40kg. “We don’t know what will happen to flour prices by then,” said a chakki owner in Hyderabad, requesting anonymity. He said that wheat is often released to flour mills rather than chakkis. He attributed the sudden price hike to hoarding, facilitated by traders being allowed to lift stocks.

The growers had sold wheat last season at Rs2,200 to Rs2,300 in the market, amid cries that the price remained inadequate given their input costs. Food department functionaries, wheat traders and middlemen in the open market were cashing in on the situation.

The provincial government procures only a specified quantity of the total wheat crop through the food department, which certainly helps control market volatility. Whenever the support price remained higher than the market price, the disbursement of bardana (gunny bags) became an arduous task, often an ignominious process, for small farmers.

“When procurement begins, everyone jumps into the fray, be it elected or unelected officials or high and mighty government personnel. Small farmers are left high and dry to meet the procedural requirements of gunny bags for selling grain at official prices,” said Mahmood Nawaz Shah, President of the Sindh Abadgar Board.

He said that it was better that wheat should be deregulated completely. “There should be no ban on its export as well. We fear that if the wheat crop becomes unviable for farmers, they will eventually lose interest in it. The government will then have to spend foreign exchange on it for food security,” he contended.

Published in Dawn, The Business and Finance Weekly, January 26th, 2026