LAHORE, Nov 23: Wheat price in the Punjab is on the slide after the arrival of imported grain and banks' recovery of commodity finance from hoarders.

In Rawalpindi, the price came down from Rs510 per 40kg a day earlier to Rs490 on Tuesday whereas Lahore experienced a dip of Rs30 - from Rs500 to Rs470.

According to market analysts, State Bank's Nov 12 order, asking all commercial banks to recover commodity finance at the earliest, is making the hoarders to release their stocks to clear the debt.

The SBP had originally set a deadline of Sept 30 for the recovery of cheap loans issued to the private sector for the purchase of wheat. It later extended the date twice to Oct 31 and Nov 15. But on Nov 12, it asked all the commercial banks to get the money back by 15th.

Second crucial factor behind the price decline is the arrival of imported wheat and increase in provincial quota by the federal government. On Tuesday, two trucks of imported wheat arrived in Multan. During the next two months around 20 trucks would be arriving in the big cities on a daily basis. "It should further help bring down the price."

The federal government on Tuesday also asked the Punjab to lift 100,000 tons of wheat instead of 50,000 tons as originally decided. This increase came as Balochistan and the NWFP failed to lift wheat as per their quota. This would cause further decline in the price, said a trader.

Punjab would be getting 500,000 tons of wheat in the rest of the season, which should help it see through next five months and carry over substantial reserves next season, hopes an official of the Food department.

Meanwhile, the Punjab Food Department raised wheat release quota to mills to 15,000 tons a day from Tuesday. The department plans to hike it further during the next five months to make it 20,000 tons a day by the end of the season.

An additional 5,000 tons would be released during the first five days of every month to meet extra demand of flour when people get salaries and procure monthly ration.

According to department officials, they have taken another policy shift to ease pressure on market. The mills are now getting quota according to their installed capacity (grinding body).

Every mill is getting it as per grinding capacity throughout the province, which is around 13,500 tons. In addition to that quota, the mills situated in big cities are being given another 1,500 tons daily to meet additional demand.

"This is policy of positive discrimination," says Food Secretary Raja Shahid Hussain. Instead of sticking to a mythical policy of equality among millers, the department decided to shift tactics.

"It has helped ease the shortage of flour which was built immediately after the Eid. The department plans to stick to the policy because it has paid the dividends," he maintained.