Punjab slashes flour price amid wheat glut

LAHORE: The Punjab government on Thursday cut flour prices after wheat prices sank further amid a grain glut in the province.

According to a notification issued by the Director Food Punjab, flour prices for all 39 districts of the province have been cut by Rs1 to Rs1.5 per kg with an immediate effect. The revision of price was notified about a month after Punjab’s maiden decision to fix flour prices based on the private wheat rate. The notification dated August 8, 2024 revises the maximum retail price of whole meal wheat flour (Atta) (PSQCA Standards-PS: 380-2018). The notification lists the maximum retail prices for 10-kg and 20-kg flour bags, ranging between Rs875 and Rs760 for a 10-kg bag and Rs1,750 to 1,520 for a 20-kg bag, and will remain so until further notice. Retailers are prohibited from charging prices higher than those specified. Each bag of flour must include specific labelling details as per PS:1485 for labelling prepackaged foods.

However, the step taken by the provincial government does not bode well for the flour milling industry. In what flour mill owners call dictating terms to the grain market, the price-fixing move is being seen against the free-market economy and in sheer contrast to the provincial government’s novel approach of not interfering in grain trade, which was exhibited in the procurement drive early this year.

The provincial Food Department kept making the mistake of interfering in the market again and again, said a flour mill owner on condition of anonymity. How come the department controls the free market mechanism, he asked. “As they cannot ensure wheat at a stable rate, how can they notify and fix Atta’s retail price?” The wheat market simply works on the economics of demand and supply. Both supply and demand vary due to multiple factors from district to district. There is selling pressure presently on the wheat trade due to rains and paddy sowing-related expenses, according to the flour miller. He warned the provincial government if the market bounced back, authorities would not have many options to respond.

Coming back to the notification issued by the Food Department, a table listing the maximum retail prices for 10-kg and 20-kg quantities for various districts was also produced. The prices vary between districts, with the highest prices seen in Rawalpindi (Rs875 for 10-kg and Rs1,750 for 20 kg) and the lowest prices are uniformly set at Rs780 for 10-kg and Rs1,560 for 20-kg across certain multiple districts. The lowest price of Rs760 per 20 kg and Rs1,520 per 20-kg has been fixed for Rajanpur, Muzaffargarh, Kot Addu, Lodhran, Bhakkar, Jhang and Layyah.

This is the second notification in a month, enforcing the regulation of retail prices for whole meal wheat flour (Atta) within a province. Earlier on July 6, 2024, Punjab for the first time notified the prices of privately bought wheat and its products. The government had fixed the district-wise maximum retail price of whole meal wheat flour (Atta) for 10-kg and 20-kg flour bags at Rs900 and Rs1,800, respectively.