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Increased support price for wheat lead to flour prices soaring in Sindh

Sindh is experiencing a wheat crisis with prices skyrocketing. This is because of the increase in the support prices the government is offering the growers of wheat in the Province. PFMA wants the uniformity of support prices across the country.

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Sindh’s new wheat harvest has landed in Karachi’s wholesale market with a high price of Rs. 5000 per 100 kg bag.

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The sharp increase is due to an increase to Rs2000 per Maund in the support price by the Sindh government. With the procurement price of Rs1,400 per 40kg last year, the prices of the 100kg bag hiked to Rs. 4100.

On the other hand, market retailers further increased the price of branded flour of weight 5 kg to PKR 380 from PKR 370. Similarly, the prices of the 10 kg bag went up twenty rupees.

According to the retailers, the hike was just a transfer of the burden from the producers. According to them the millers had increased prices leading to the retailers selling to customers at higher prices.

Chairman Pakistan Flour Mills Association, Sindh blamed the price hike on the Sindh government for setting up a high price floor, which in turn drove up the prices of the commodity in the whole market.

The legal proceedings are underway, where the flour millers are arguing against the federal government to implement a policy of uniformity in wheat support prices all over the country. Currently, in Punjab, the support prices to farmers are fixed at Rs1650 per 40kg, and in Sindh, it is Rs2000 per 40 kg.

The PFMA has reportedly urged the center to work to maintain a consensus on the rate of wheat and flour to make the facilities fair for the masses.

Last year, the provincial government had collaborated to announce the support prices, and the difference this year could create frustration and chaos in the concerned markets.

All of the harvests from Sindh province will reach markets by 15th or 16th April, however, in Punjab, the crop will start arriving by the second week of May. The current harvest in Sindh has a very high moisture content, making it unfit for grinding to make flour for at least a week. Thus, the mills are using the imported wheat to make flour.

Regarding the claim by the retailers that the price hike by millers had led to the increase in the retail price of flour in the market, the PFMA said that the mills had not increased the rate for the last two months.

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The liberalization of purchase policy where the mills get wheat without any limit has caused damage to the smooth supply of floor and thus the stability in prices.