ISLAMABAD, Jan 9: The federal government, which is expecting the production of wheat to exceed the target of 20.2 million tons, has directed the provincial governments to release stocks from their godowns to the mills quickly to improve supply situation of flour and reduce flour prices in the country, it was learnt.

Sources told Dawn on Sunday that a meeting presided over by Prime Minister Shaukat Aziz recently had also decided that the federal government would pick up the incidental charges on release of wheat by the provincial governments to the grinding mills to encourage them for higher releases.

The minister for food, agriculture and livestock had also been directed to discuss the overall wheat situation with the provincial governments and 'ask them to transport the imported wheat to godowns quickly', a senior government official privy to the meeting said.

The official said that despite the arrangements of wheat supply being satisfactory, the country continued to face problems of wheat supply in the market. The provincial food departments were still very slow in collecting their share out of imported wheat and releasing quotas to the flour mills.

According to official record, the price of wheat increased from Rs10.46 per kg on May 21, 2004 to Rs12.67 per kg on November 27, 2004, showing an annual increase of 15.77 per cent.

The price of wheat flour also rose by 8.49 per cent during the same period, as recorded by the Federal Bureau of Statistics. The sources said the prime minister was informed that wheat flour prices were declining because of improved supply as a result of imported wheat.

However, in some parts of the country, particularly in the NWFP, prices were rising, the quality of wheat flour was sub-standard and there were complaints of short supplies.

It was, therefore, decided that the provinces should be encouraged to release larger quantities of wheat to the grinding mills for increasing the supply of wheat flour in the market, thereby easing the price situation.

The government estimates that sufficient stocks of wheat were available till the harvesting of next crop. Due to early harvesting of cotton crop this year, sowing of wheat has mostly been done in time in the month of November-December, raising expectations for a good crop.

As of December 26, 2004, the wheat stocks with provincial governments were 1.404 million metric tons in Punjab, 304,941 metric tons in Sindh, 118,708 metric tons in the NWFP and 121,522 metric tons in Balochistan.

As such, these stocks are considered to be sufficient for 94 days in Punjab, 55 days in Sindh, 24 days in the NWFP and 122 days in Balochistan. Passco has another 247,780 metric tons of wheat in its stocks.

The federal food ministry also claims that the prices of wheat and wheat flour were continuously declining since November 27, 2004 due to timely import of wheat. The price situation also eased due to removal of check posts by the Punjab government and levy of duty on export of wheat flour to Afghanistan.

Hoarders have also started releasing their stocks in view of sufficient quantity of wheat having been arranged by the government through import, it claims.