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April 1, 2020

Wheat crisis resurfaces as supply tightens on lockdown

Business

April 1, 2020

LAHORE: Wheat flour crisis has resurfaced in the Punjab as the provincial official inventory of the staple food near end with thin supplies in sight due to delay in harvesting of the new crop and ban imposed by Sindh administration on grain transportation to other provinces.

Wheat and its flour shortage again started to surface within less than three months amid high demand by consumers because of panic buying in the wake of outbreak of coronavirus and pilferage of subsidised wheat to Khyber Pakhtunkhwa.

In these challenging circumstances, stress on stocks of the Punjab Food Department increased manifold. In the absence of any mechanism to check grinding of highly subsidised flour, there are rampant complaints of black-marketing of wheat and flour by influential mill owners with the connivance of provincial food department.

It is believed flour mills are not grinding a sizeable quantity of wheat out of the officially released cheap wheat. Instead, it is sold in open market by influential flour mills in connivance with officials of Food Department or being sent to Khyber Pakhtunkhwa, The News learnt. Contrary to vigorously checking wheat being released to flour mills, Punjab emphasised to increase quantity of issuance quota without plugging pilferage.

The Punjab Food Department increased daily release of wheat to flour mills by 25 percent in the last couple of weeks, which is certainly an excessive quantity as it should be sufficient even for whole population of the province according to its per capita consumption pattern. Interestingly, at least 50 percent population residing in rural areas uses their own wheat. That implies Punjab is issuing almost double the amount of wheat if this quantity is reconciled with per capita consumption of half of the population dependent on flour bags prepared with the subsidised wheat provided by the provincial government to flour mills.

So a multi-million-dollar question arises: where all this wheat is being drained from the hands of the food department officials through flour mill owners?

Punjab Food Department officially conceded that wheat issuance had partly been increased to meet requirements of Khyber Pakhtunkhwa. Even then, according to a conservative estimate, around 7,000 to 10,000 of wheat being released to flour mills daily is drained and not reaching to consumers in the shape of subsidised flour in the province.

If this trend continues and corrective measures are not taken, it is feared that Punjab government's wheat stock would come down to zero in a few weeks before arrival of the new crop and there would be severe paucity of wheat flour coupled with unbearable price hike in the province. In a desperate attempt, the clueless high-ups of provincial food department are trying to facilitate local flour mills to buy wheat from Sindh but to no avail. “This step is just to show some progress without any tangible gains,” said a market insider.

In an another step taken in a panic mode, Punjab Food Department has taken several steps for what it called to ensure effective procurement of wheat to meet the target during the year 2020/21. The provincial secretary suspended all the food grain licences issued by the district food controllers throughout the province, except flour mills and chakkies and those dealing with wheat products, till completion of wheat procurement drive. The action was taken in exercise of powers conferred under Section 3 of the Punjab Foodstuffs (Control) Act, 1958.

Disposal of the wheat stocks purchased by flour mills and chakkies would be subject to regulation by the licencing authority. All the feed mills are prohibited to procure and store wheat.

All the wheat stocks illegally hoarded would be sealed / seized by the licencing authority or the inspector as defined in Section 2 (iv) of Food grains (Licensing Control) Order, 1057. Purchase of wheat by seed companies would be regulated through standard operating procedures circulated by the director the provincial food department.