LAHORE: Flour mills have fixed new rates for atta bags as Rs3,500 plus wheat makes old price unviable, saying the old government-notified prices of Rs905 and Rs1,810 are no longer viable.
On the back of prevailing grain prices, from Saturday (today), the evaluated retail prices based on wheat at Rs3,500 per maund are Rs1,040 for a 10kg bag and Rs2,050 for a 20kg bag. These prices reflect actual input costs, millers said.
No new atta rate has been notified by the authorities after the wheat price rose to over Rs3,500. Mills had halted production of small bags last week as subsidised govt wheat release at Rs3,000 per maund was discontinued by provincial government.
Mills were supplying atta at govt-notified rates while wheat was being released from official stocks at Rs3,000 per maund with the subsidised release stopped and fresh grain prices hiked above Rs3,500 per maund in open market wheat prices. Millers said they cannot produce and sell 10kg and 20kg bags at the old notified rates because their input costs have increased sharply.
Now, a market insider said, new rates on the basis of the elevated fresh wheat price are being set to determine the actual cost of a flour bag. Traditionally, when private wheat arrives in the market and the government quota stops, mills adjust atta prices according to the prevailing wheat rate, whether higher or lower.
However, millers said the Food Department is insisting that 10kg and 20kg atta continue to be sold at Rs905 and Rs1,810 respectively, the rates linked to old Rs3,000 wheat price. District Food Controllers have started calling mills to strictly observe the old rates, sources said.
Millers said the directive ignores current procurement costs and risks disrupting supply of small bags to consumers.To maintain supply, some mills have adjusted 10kg and 20kg atta prices in line with the 15kg bag rate as a benchmark. Leading brands have resumed limited production of 10kg and 20kg bags.
Industry sources said complaints have begun from various districts where officials are pressing for atta sales at the old notified prices, which is illegal.If the Food Directorate does not wake up to ground realities regarding new rates, availability of 10kg and 20kg atta in the retail market will remain disrupted, they added.
A flour miller said they have conveyed the cost structure to the authorities and are waiting for a revised notification. Until new rates are issued, most mills will not resume full-scale production of small bags because selling below cost is not viable. He warned that continued enforcement of old rates could lead to shortages of standard packs used by households.When contacted, a senior official of Food Directorate did not comment on fixing of new rates for atta bags as Rs3,500 plus wheat makes old price unviable.
