LAHORE, Oct 8: The atta (flour) price, ranging between Rs210 and Rs215 per 20kg, touched an all-time high in some areas of Lahore on Wednesday after the All Pakistan Flour Mills Association’s decision to increase price by Rs4 (for the same quantity).
The previous record was made when the price of a 20kg bag touched Rs210, but it was soon controlled by the government.
The PFMA’s decision has been prompted by the official release policy, which was handed over to the millers on Tuesday. It did not meet the millers’ demand of suspending the wheat price cascading and providing some relief on the price of gunny bags.
The Punjab government went ahead with the cascading price, and maintained that it had involved private sector in procurement last year with a promise of making progressive increase in prices. Now it cannot back out of its promise and drive the private sector out of the wheat purchase next year.
The department plans to start selling 8,000 tons of wheat daily for Rs330 per 40kg. The price will raise to Rs345 early next year.
Stung by the refusal, the PFMA announced an increase of Rs4 per 20kg bag, providing shopkeepers an opportunity to raise price of their own free will. On Wednesday, they increased it by Rs10 (for a 20kg bag).
The millers justified the increase on the basis of Rs10 raise in wheat price —- Rs330 per 40kg compared to Rs320 per 40kg of the last year —- and enhancing gunny bag price by Rs20.
The Punjab Food Department, on the other hand, maintains that it has taken the decision of cascading price after taking all financial possibilities into consideration.
Punjab Food Secretary Shahid Husain Raja hoped that the price would come down after the department would start releasing wheat. It had decided to release 8,000 tons every day, and such a heavy pouring should help reduce the price automatically,” he said. “However, if some cartel is formed to keep the price artificially high, the government will consider all possible measures to tackle the situation.”
A food ministry source came up with another explanation, saying, “the PFMA, itself the biggest private sector stockist, is holding wheat in the hope of deriving maximum profit after announcement of wheat support price, which is due by 15th.”
“As expected, if the price goes up to Rs350 per 40kg, the PFMA will prefer to hold wheat for another six months and reap windfall profits the next year,” he claimed.
He said the cascading of price by the Punjab Food Department should not have this much affect on flour rates. “In open market, the price is still ranging between Rs345 and Rs350 per 40kg, and the food department will provide it for Rs330. Then it has still not practically started releasing wheat. It will do so from tomorrow (Friday),” he said, accusing the association of jumping the gun and providing the shopkeepers an opportunity to act at their will.
“The PFMA has increased price knowing that it will have to bring it down during Ramazan,” according to a citizen. He said the government had failed to check cartilization of flour millers, as it had done in many other areas. It had left everything to the so-called market forces without any regulatory regime, he said.