LAHORE:To arrest spiraling prices of wheat products through administrative measures, the Punjab government on Wednesday took extreme step of capping flour price at Rs2,060 per 20kg bag against market rate of over Rs2,200.
The directive mandates that flour mills sell 10kg bags at Rs1,030 and 20kg bags at Rs2,060 in the open market, with a warning that any mill charging above this rate will face departmental action.
The capping of retail price of flour has once again put administrative orders ahead of market dynamics, raising concerns about supply distortions and renewed shortages. While the intent is to provide relief to consumers struggling with inflation, the move, however, overlooked the cost structure of wheat procurement, milling, and transport that mills face, according to market insiders. When official rates are set below the prevailing market equilibrium, the immediate response from suppliers is either to hold back stocks, divert supplies to the informal market, or reduce production. This pattern has played out repeatedly in Punjab’s wheat and flour markets in recent weeks, leading to artificial scarcity despite normal grain availability.
The govt paired the price cap with a crackdown on what it calls speculators. A directive in this connection circulated on Wednesday to all Deputy Directors Food and District Food Controllers shares a list of individuals allegedly involved in speculation, violation of govt notifications, exploitation of farmers, and blackmailing flour mills over rates.
Officials have been instructed to trace these persons and ensure they purchase wheat equivalent to their trading volume. If they fail to comply, authorities are to check their food grains licences, stock registers, and Form-C, conduct inquiries.
