LAHORE:Flour millers in Punjab have largely stopped producing govt-controlled 10kg and 20kg flour bags after the government suspended official wheat supply to mills following the arrival of the new wheat crop, with mostly quality super fine in 15kg bags now available in the retail market at a bit higher price of around Rs1,500 each.
Haji Muhammad Yousaf, President of the Lahore Atta Dealers Association, confirmed that the supply of government wheat to flour mills has been halted. The wheat was previously provided at Rs3,000 per 40kg.
‘Flour mills are now purchasing wheat from the open market at around Rs3,650 to Rs3,700 per 40kg,’ Yousaf said. ‘As a result, mills have largely discontinued 10kg and 20kg bags and are mostly preparing 15kg bags, which are being sold at retail for up to Rs1,500,’ he said.
Meanwhile, district food controllers (DFCs) are pressuring mills not to purchase wheat above Rs3,500 per 40kg, according to industry sources. The directive was conveyed through WhatsApp messages by the DFCs. The officials are also demanding that small mills continue supplying 10kg and 20kg bags, warning of action under SOPs, which no one knows about, if they fail to comply.
Market insiders say the DFCs’ insistence on a Rs3,500 purchase cap is an indirect admission that wheat prices have risen from the last official release rate of Rs3,000. ‘How can they force mills to provide flour at the old notified ex-mill price of Rs1,770 per 20kg, which was based on Rs3,000 wheat?’, an insider asked.
According to the Food Directorate’s own calculations, a Rs500 increase per 40kg in wheat cost warrants a Rs250 increase per 20kg bag, raising the ex-mill price to Rs2,020. However, current market rates for wheat remain above Rs3,500 per 40kg, they said.
The Food Directorate, in a separate notice, has directed all flour mills to continue supplying 10kg and 20kg white bags at previously notified rates.‘If any mill sells above the government’s notified rate, action will be taken against it under the SOPs,’ the directorate warned.
Market insiders argue that higher procurement costs from the open market have forced them to adjust bag sizes and pricing to manage input costs, while departmental pressure to cap purchases and maintain old retail prices are against the market norms and thus is creating operational conflicts.A senior official of Food Directorate, however, disassociated himself and the staff from any such WhatsApp messages.
