LAHORE, Nov 30: The federal government plans to slap 30 to 35 per cent duty on export of flour to Afghanistan to take the pressure off the domestic flour price. The Punjab government had called for imposing a duty of up to 50 per cent to render the export totally unviable.

According to sources in the Ministry of Food, Agriculture and Livestock, the government has not been able to bring domestic flour price down and it has failed to curb the commodity’s duty-free export to Afghanistan.

The government also instructed the State Bank of Pakistan to recover commodity finance by January 30 so that more than 600,000 tons of wheat pledged with banks could be released to market, officials said.

The federal government, they said, had also decided to foot the bill of subsidy, the main excuse of the Punjab for checking its borders and stopping the flow of flour to other province. From now onwards, the Punjab government would only charge transportation charges while the subsidy would be taken care of by the federal government. The step, they said, was aimed at easing the wheat and flour market all over the country.

With the first ship carrying imported wheat already docked at Karachi, the domestic flour market should start easing now. At present, the private sector has 600,000 tons of wheat pledged with banks. Millers have a stock of about 350,000 tons. The Punjab Food Department has 1.8 million tons. Experts believe that the combined stocks should be enough for the country to see the rest of season through if export to Afghanistan was checked.

“The interior ministry has been told to monitor border with Afghanistan. The government may increase the duty if the proposed 30 to 35 per cent did not serve the purpose,” says another official of the ministry.