ICCI terms government wrong policy as cause of rising floor crisis and price hike
- July 05, 2020
Muhammad Ahmed Waheed, President Islamabad Chamber of Commerce and
Industry (ICCI) has said that flour crisis was emerging due to the wrong policy of the Punjab
government as it was forcing the flour mills to sell flour at retail price of Rs.42.5/Kg despite
the fact that flour mills have to purchase wheat @ Rs.48.75/Kg. He raised the question as to
how the flour mills could provide flour at a cheaper price by purchasing wheat at higher
price. He said that the Punjab government had set a wheat procurement target of 4.5
million ton, which could not be met despite the fact that the Punjab government seized the
wheat procured by the middlemen and flour millers under the pretext of hoarding
ordinance. He said that the official rate of wheat procurement has been set at Rs.1475 per
40 Kg while the private sector has to buy wheat @ Rs. 1950 per 40 Kg and urged that the
government should address this problem.
Â
Muhammad Ahmad Waheed said that it was not possible for the flour millers to sell a 20 Kg
bag of flour at retail price of Rs.850 by purchasing wheat @ Rs.1950 per 40 kg. He said that
no business could sell finished goods at cheaper rate by buying and processing material at
expensive rate and government should realize this fact. He said that the government has
allowed the private sector to import wheat but at least three months were required to
import wheat. He said that the government should issue wheat quota to the flour mills up
to their capacity to address flour shortage issue and warned that the flour crisis could
escalate if coercive tactics were used in the matter.
The ICCI President appealed to the Prime Minister of Pakistan and the Chief Minister of
Punjab to take the Flour Mills Association into confidence for formulating wheat issuance
policy as they were the key stakeholders in this matter and wheat policy should be finalized
in consultation with them. He said that in 2018-19, Punjab Food Department used to issue
55,000 tonnes of wheat daily while in 2019-20, 35000 ton wheat was being issued daily
which created shortage and price hike. He said that now the government wanted to issue
only 15,000 tonnes of wheat daily @ Rs. 1475 per 40 Kg and was asking flour mills to keep
retail price of flour at Rs. 850 per 20 Kg which was not possible for them as they have to buy
what @ Rs.48.75/Kg to meet their requirement. He said that for the last six months, crises
have been arising in the country and now the flour crisis was emerging. He appealed to the
Prime Minister of Pakistan to take notice of this situation and issue orders to the relevant
authorities for issuance of wheat quota to flour mills up to their capacity in order to avoid
any flour crisis in the country.