LAHORE, Aug 28: The Pakistan Flour Mills Association (Punjab branch) on Tuesday increased flour price to Rs640 ex-mill – third increase in the last two weeks – taking the retail price of a 20kg bag to Rs650.

According to the association, the increase is necessitated by rising wheat prices in the market and inflationary trends like hike in electricity and gas charges and cost of transportation.

The association has already unilaterally increased flour prices twice in the last two weeks, taking it from Rs560 per 20kg before Ramazan.

During the holy month, huge subsidies kept the prices down, but as soon as the subsidy regime ended, the association increased price to Rs610 per 20kg bag. Within a week, it increased the price again to Rs620 per 20kg, and now to Rs640 – showing an increase of Rs80 in a 20kg bag, or Rs4 per kilo -- in the last two weeks.

Normally, the market rates are higher by Rs10 to Rs15 per bag, which will take the retail price now to Rs650 to Rs655 – or close to a Rs100 increase per 20kg bag.

Addressing a press conference, the association representatives also announced gradual shifting to 10kg bags instead of present packing of 20kg and 10kg. The rate for a 10kg flour bag would be Rs340, said PFMA-Punjab Chairman Chaudhry Abdul Jabbar.

Flanked by former central president Asim Raza, he said that 10kg packing was being introduced to facilitate consumers.

Defending the increase, Asim Raza said earlier increase was made when the Punjab government stopped supply of subsidized wheat under the Ramazan package and the mills started buying wheat from the open market for grinding and marketing.

The executive committee of the association met on Tuesday and decided with a majority vote to increase the prices of flour and introduce 10kg bags, he said and added: “With every passing day the price of the wheat in the open market is increasing and at present it is around Rs1,080 per 40kg in the wheat production areas while in cities and non-wheat areas price of the commodity has risen to Rs1,100 per 40kg.

Moreover, the mills are facing hardships in getting wheat from the open market.”

He said increase in petroleum and electricity prices had also pushed up the grinding and transportation cost. He claimed the prices of flour were increased some three years back whereas, during the same period, prices of petroleum, wheat and electricity have registered manifold increase.