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Troubled KP flour mills bracing for the worst

January 10, 2013

Labourer load flour bags from a warehouse – File photo by APP
Labourer load flour bags from a warehouse – File photo by APP

PESHAWAR, Jan 9: The crisis stricken Khyber Pakhtunkhwa flour mill sector has braced for the worse as some millers have dismantled their mills after remaining out of business for years, according to business circles.

Millers told Dawn that the constant neglect that the federal and provincial official circles concerned meted out to the Khyber Pakhtunkhwa’s oversized flour mill sector had forced several of their colleagues to demolish their mills and utilise the land for other business purposes.

“I personally know 7 to 8 flour mills that have been demolished after remaining closed for years because of a prolonged crisis triggered by wheat shortages,” said Malik Iftikhar Awan, former president of the Khyber Pakhtunkhwa chapter of Pakistan Flour Mills Association (PFMA).

Haji Mohammad Sadiq, a miller from Peshawar, when contacted, said several of the mills in Khyber Pakhtunkhwa were out of business while some had been demolished.

“It has become difficult,” said Mr Sadiq, adding that a majority of the mills could not operate even for an hour daily.

Khyber Pakhtunkhwa underwent a mushroom growth of flour mills in the early and mid 1990s and several of its central districts, including Peshawar, Charsadda, Mardan, Swabi and Nowshera, saw huge investment in the sector.

The investment was carried out without any patronage and planning by the successive provincial governments as in several instances the mills were set up on priced agricultural land without any notice by the authorities concerned.

Later, the province checked the unplanned growth in a belated move in the late 1990s and the establishment of new flour mills was banned. The official ban continues till to date after more than 12 years.

However, according to business, none of the successive provincial governments attempted to help the flour mills survive, forcing some to exploit the situation to their benefit as they indulged in exporting wheat flour to Afghanistan in violation of the official restrictions imposed from time to time in the past.

They said the province had more than 200 mills of which about 60 per cent become functional for six months -- from November to April every year.

“Flour mills in Khyber Pakhtunkhwa are no different than ice factories that operate only in summers,” said Mr Awan, who is also the senior vice-president of the Khyber Pakhtunkhwa Chamber of Commerce and Industry. “Most of us operate our mills only in winter months once wheat becomes available,” he added.

According to him, Khyber Pakhtunkhwa has a total annual wheat consumption requirement of 3 million tones to 3.2 million tonnes of which it locally produces only one-third.

The rest of the wheat requirement, he said, was met from the open market in Punjab.

The millers said wheat released from the Khyber Pakhtunkhwa government’s official godowns to each of the flour mill in all the 25 districts was insufficient. All the mills, according to them, receive 50 to 100 of 100 kilogram of wheat on daily basis.

“This only takes hardly one hour to run a mill following which we either switch off the machinery or mill the wheat purchased from Punjab’s open market,” said Mr Sadiq.

He said the problem had become acute after the food department of Punjab recently increased the official price of wheat, making it cost ineffective for the Khyber Pakhtunkhwa millers to procure wheat from Punjab.

The prices had gone up from Rs3,000 per 100 kilogram bag of wheat to Rs3,800 per bag during the past few days, said Mr Sadiq.

He said the Pakistan Agriculture Storage and Services Corporation had compounded the Khyber Pakhtunkhwa millers’ problems this year. “It has been withholding sufficient quantity of wheat in its stocks instead of releasing it to the millers,” said Mr Sadiq.

He said the federal government had claimed that the country had four million tonnes surplus wheat. “Where has it gone? Why don’t they release it to the mills?” said the miller.

According to business circles, flour mills that are doing business with Afghanistan are operational at present. “Their number is not more than 15 to 20 units,” said Mr Awan.

Mr Sadiq said that the Afghan oriented flour mills of Khyber Pakhtunkhwa were operational under compulsion. “If they stop producing wheat,” he added, “they won’t be able to supply flour to their customers in Afghanistan and in that case they would risk losing their money in the Afghan market.”