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Millers again increase flour price

January 15, 2013

KARACHI, Jan 14: Flour millers have once again raised the prices, this time by Rs50 to Rs75 per 50-kilo bag, of various flour varieties, citing a stalemate over their demand for an increase in wheat supply to the mills across the province, it emerged on Monday.

The new price of fine flour, refined flour (maida) and flour quality no 2.5 was being quoted as Rs2,000, Rs2,000 and Rs1,900 a 50-kilo bag as compared to its last week price of Rs1,925, Rs1,925 and Rs1,850, respectively.

A 10-kilo flour bag produced by flour mills is now available at Rs385 as compared to Rs375 a couple of days ago, while retailers are demanding Rs420 to Rs440 for a 10-kilo flour bag of Ashrafi and Bake Parlor, respectively. Only last month, the two brands were selling at Rs380 and Rs390.

The price of chakki aata is quoted at Rs44 to Rs46 a kilo as compared to Rs38 to Rs40 a kilo, followed by fine flour price of Rs42 to Rs45 as compared to Rs38 and Rs40 a kilo. Flour quality no 2.5 now sells at Rs42 as compared to Rs38 a kilo last month. The millers receive 100-kilo bags of wheat at the rate of Rs2,800 from the food department, yet they are pushing up the rates.

They explained that the high price was being charged because they had to procure wheat at a higher price from the open market. Wheat price in the open market rose to Rs3,500 a 100-kilo bag from last week’s Rs3,400 while it was Rs2,600 in July 2012.

Speaking to Dawn, a miller said that in Karachi they were getting only 500-550 wheat bags a day from the food department.

“With this allocation, a mill can run only for five hours. To meet the demand, we have to buy wheat from the open market at higher rates that subsequently causes a price hike,” he explained.

He said after sorting out waste and adding expenses incurred on the process, a 100-kilo wheat bag costs around Rs3,000 as compared to government’s issue price of Rs2,800.

While Sindh Food Minister Mir Nadir Ali Magsi was said to be pre-occupied with the Jhal Magsi desert rally, the flour millers fully cashed in on his absence by raising the flour prices by up to Rs200 per 50-kilo bag since the last week of December 2012.

Seeking an increase in the wheat supply from the food department, the millers had raised flour prices on the pretext of inadequate wheat allocation last month.

They had argued that they had been getting only 300 bags last month following which the government enhanced the wheat supply to 500-500 a day per mill in the first week of January.

Yet the millers were of the opinion that the wheat supply was insufficient.

Sources said that no progress was made on the price row issue after an understanding had been reached between flour millers and food department officials in a meeting held on Jan 9.

The sources said the millers had sought over 40,000 tonnes of more wheat than the current supply of 166,000 tonnes for Sindh mills to normalise prices.

Chairman of the Pakistan Flour Mills Association (Sindh zone) Chaudhry Ansar Jawed told Dawn last week that a joint proposal was being moved by the food department and the millers to the food minister for higher allocation of wheat to the mills from the current supply of 166,000 tonnes for mills in Sindh.

When asked about the progress on the issue following the agreement, Sindh Food Director Talib Magsi preferred not to comment saying that he was on leave.