Rs100 drop in 20kg flour price expected next week

LAHORE:The Punjab government may start releasing wheat to flour mills at Rs1,950 per 40kg, thus, resulting in a decrease in flour price by about Rs100 per 20kg bag from the next week or so.

At the same time, wheat quota for targeted subsidy is said to be enhanced substantially, offering flour to low-income groups at the last year's rate of Rs 860 per 20kg. Hence, there will be two rates of flour in the province under the proposed wheat release policy of the provincial government.

The low-income group can get flour at the last year's rate of Rs 43per kg in specially designed 10kg bag at Rs430 while the rest of the population would buy flour at Rs55 per kg or 20kg flour for Rs 1,100 against the present rate of Rs 61 per kg or Rs 1,220 per 20 kg. Despite difference in wheat procurement rates in Sindh (Rs 2000 per 40kg) and Punjab (Rs 1800 per kg) provinces, the price of flour is likely to be the same across the country, Rs 55 per kg, it is learnt.

This step under the guidance of the federal government would help eliminate distortion from the market, making possible uniform flour rate in the country. With approval of the wheat release policy by the provincial cabinet next week or so, it is likely that grain issue price for flour mills would be Rs 1,950 per 40kg with ex-mill flour rate of Rs1,075 and retail price at Rs1100 for 20kg bag.

Sources said that Punjab could fulfil requirements of wheat till April 2022 provided strict monitoring of flour grinding is done. With a view to achieving smooth wheat flour supply in the market at reasonable rates, the biggest challenge will be proper monitoring and regulation of officially released wheat.

However, Food Department, according to an estimate, still needs at least 1.0 to 0.7 million tonne wheat to build stocks to a comfortable level. Therefore, imports are inevitable in order to maintain strategic grain stocks.