KARACHI, Sept 18: Wheat traders say that the Punjab government is yet to allow them to transport wheat to Karachi for selling in the open market, thereby increasing their cost of inventories and , from local millers' point of view, creating wheat shortage in Karachi.

"Our trucks loaded with wheat were stopped by the Punjab police from entering into Sindh," said a Punjab-based wheat trader Umer Khan who came to Karachi this week to get orders for wheat supply. "Karachi-based traders were willing to pay me a handsome price of Rs1185 per 100 kg earlier this week, but I could not line up supplies as Punjab has still not lifted the ban on wheat movement," he told Dawn. Mr Khan said wheat price in Karachi had now fallen to Rs1170 per 100 kg "which means I have lost Rs15 per 100 kg."

Khalid Masood, Chairman (Sindh Circle) of the Pakistan Flour Mills Association, also told Dawn that wheat from Punjab was yet to enter Karachi.

Millers say that wheat price in the local market had fallen from Rs1185 per 100 kg to Rs1160 per kg on news that the Punjab government had lost its case for imposing a ban on movement of wheat outside the province to superior courts, and that wheat imported from Russia had reached Karachi. "But now the price has once again risen to Rs1170 per 100 kg," said Sheikh Akhtar Hussain, a former chairman of the Pakistan Flour Mills Association.

Both Mr Hussain and Mr Masood said they hoped that the price would decline substantially once wheat from Punjab starts coming in. "My understating is that the Punjab Government may issue the required notification, allowing the wheat movement outside the province sometime next week," said a source at the Sindh food department.

Umer Khan said because of the ban the growers were sitting over large stocks of wheat in several districts of Punjab, adding that not less than 1.5 million tons was stocked in Bhawalnagar alone. "On the other hand, Sindh is facing wheat shortage."

That Sindh is facing wheat shortage is evident from the fact that the Sindh food department has less than 100,000 tons of wheat in strategic reserves and is still unable to supply subsidized wheat to the millers in quantities they require.

Against what the millers call a minimum requirement of 85,000 tons, the Sindh food department is providing 40,000 tons to the Karachi-based millers.

"We keep asking the department to increase wheat quota but they have their own problems," said Mr Masood referring to wheat shortage with the Sindh food department.

In the open market also, wheat stocks are depleting fast and the local wheat traders fear that if the arrivals from Punjab do not start next weak wheat prices would rise despite the arrival of 40,000 tons of Russian wheat. Out of the 40,000 tons wheat imported form Russia and currently being offloaded at the Port Qasim, 15000 tons is being supplied to Sindh and 10,000 tons each to NWFP and Balochistan.

Wheat shortage in Sindh is one of the key factors that have aborted serious moves made by the Sindh food department to get the prices of wheat flour reduced by the millers. The department had asked them to reduce the ex-mill price of wheat flour to Rs1,000 per 80 kg, but market sources say the millers are still selling an 80-kg bag of flour for Rs1025-Rs1050.

The result is that wheat flour is still being retailed at Rs14-15 per kg in most parts of the city.