After sugar price shock, flour soars as wheat costs spike

• Market deregulation sparks surge in wheat prices.
• Wheat climbs to Rs3,100, flour bags costlier.
• Wheat jumps Rs1,000, flour bags up Rs500.
  

LAHORE: Wheat and flour prices have surged sharply, with wheat climbing by Rs300 this week to Rs3,100 per maund (40kg). 

The hike follows a month-long upward trend, during which wheat gained nearly Rs1,000 per 40kg and the price of a 20kg flour bag rose by about Rs500. 

This recent hike is part of a broader trend, as both wheat and flour prices have been steadily increasing. The steep increases have raised alarm over market manipulation and the absence of effective government oversight.

Critics claim that the provincial government’s abrupt decision to cease regulating the wheat market without prior notice has created an environment conducive to price manipulation. This lack of oversight may have empowered wheat hoarders to artificially inflate prices, further exacerbating the situation.

According to Pakistan Flour Mills Association (PFMA) Chairman Asim Raza, the government has been facing challenges in controlling wheat prices. Raza warned that the ongoing rise in wheat prices is likely to trigger a corresponding increase in flour prices in the near future.

In response to these developments, the association is actively focusing on the issue to better understand the underlying causes and potential implications for the market.

Nevertheless, the emerging situation, according to market insiders, highlights the complex interplay between government policies, market forces, and price dynamics in the wheat and flour sectors.

Progressive Flour Millers Group (PFMG) Chairman Khaliq Arshad cautioned that low wheat reserves in the country could be one of the leading reasons for the rising trend in its prices. 

According to him, Punjab has estimated reserves of over 2.5 million tonnes, both in the public and private sector, which are definitely not enough to meet the demand till April 2026.

He was of the view that prices of wheat and flour may continue to climb steadily if authorities failed to take corrective measures. The upward trend of grain prices prompted traders to sell stored wheat in the open market. That is why the wheat price reversed from Rs3,250 per 40 to Rs3,100.

To a question, he stressed the need to adopt a proactive approach by the federal and provincial governments for supplementing wheat stocks with a view to meeting domestic demand before the start of the next harvesting season. Import of wheat may be inevitable given the present and evolving situation, he warned.

PFMG President Majid Abdullah observed that stakeholders are closely monitoring the situation, anticipating potential impacts on the broader food market. 

He disclosed that the notification issued by the Punjab government about capping the price of wheat at Rs2,900 per 40kg and flour at Rs1,750 in the retail market is no more being followed in the market. The strong market dynamics have baffled many, and these are dictating demand and supply as well as prices now onwards, he added.

It is a simple matter of demand and supply, he emphasized, adding if the government wants to maintain flour price at certain level, policy needs to be revised according to ground realities.

When contacted, Special Assistant to CM, Price Control & Commodities Management Salma Butt was not available for comment on specific queries regarding the surge in wheat and flour prices that have been on the rise for about a month.