KARACHI, Sept 8: The Sindh Food Department says that it has convinced the millers to sell wheat flour at Rs12.50 per kg through selected outlets and weekly bazaars, and also to retailers, at the same price. But millers say this is not possible unless the department issues more wheat at subsidized rates.

A Dawn survey revealed that the retailers were selling average quality wheat flour at Rs15 per kg in most parts of the city. In posh areas the price was further high.

"We have asked the millers to sell wheat flour at Rs12.50 per kg not only to the selected outlets and at weekly bazaars, but also to the retailers," Dr Tanveer Qureshi, Director Karachi Region, Sindh Food Department told Dawn on Wednesday. He said that the names and locations of the sale points where wheat flour is to be sold at Rs12.50 a kg would be published in newspapers.

But millers say they can sell wheat flour at Rs12.50 per kg only at the selected sale points but not to retailers. They say all 71 flour mills have agreed to set up five stalls each at the nearby outlets and will also sell at this rate at weekly bazaars.

"But it is not possible for us to sell wheat flour at this price to all the retailers in town," says Sheikh Akhtar Hussain, a former chairman of All Pakistan Flour Mills Association.

"The reason is that we are not getting enough wheat from the Sindh Food Department and have to buy much from the open market at higher rates." The Sindh Food Department has decided to provide 40,000 tonnes of wheat to the Karachi-based mills at the officially subsidized rate of Rs9.5 per kg.

But this is much lesser than their actual requirement of at least 85,000 tonnes. So, they will have to buy the remaining quantity from the open market where wheat is selling at Rs10.80 per kg or more.

"Add to this several other costs including that of transportation and deferred payment and the price rises to Rs12 per kg," says Hussain. "Now it is too much to expect that the millers can sell wheat flour at Rs12.50 per kg when they are getting wheat at Rs12," he adds.

But he thinks that the millers can sell at Rs12.50 per kg the wheat flour obtained from the officially subsidized wheat. Hussain and other flour millers say they are ready to sell wheat flour at Rs12.50 if the Food Department increases their monthly quota of subsidized wheat.

Sources in the Sindh Food Department say the provincial government may increase the quota next month when more wheat would be available with the Food Department. But Dr Tanveer Qureshi asserts that "the millers will have to sell wheat flour at Rs12.50 per kg" with no compulsory increase in quota.

"There is no end to their demand (for increasing wheat quota)," he said when reached by Dawn over telephone. "But I have asked them to sell wheat flour at Rs12.50 per kg in any case and they have agreed to do this. Now if they back out, the Department will deal with them accordingly," he warned.

The Food Department officials including Dr Qureshi do not mince words in accusing millers of having been involved in trading of officially subsidized wheat. "This time they cannot dare do this," warns Qureshi.

Millers, however, refuse this allegation and say that all 71 millers based in Karachi need 85,000 tonnes to 125,000 tonnes of wheat depending upon their working hours and the capacity to grind wheat.

They say that the Sindh Food Department has issued up to 140,000 tonnes of wheat to Karachi-based millers in late 1990s. But officials say whenever the department has issued more than the required amount of wheat to the millers, it has noticed the misuse of the quota, trading of subsidized wheat and smuggling of wheat flour to Afghanistan.

"Don't forget that many of the owners of big flour millers were small chakkiwalas (petty millers). They managed to get huge quantities of officially subsidised wheat from the Department and sold them in the open market to make quick bucks," said an official of the Sindh Food Department well-versed with the history of Karachi flour mills.

HIGHER SUPPLY: Sources in the Sindh Food Department told Dawn with the arrival of imported wheat next wheat the supply situation would improve thereby easing pressure on wheat and flour prices.