With the arrival of imported wheat at the rate of $145 to $148 per ton C&f Karachi, wheat price in open market is quoted at Rs 1040 per bag of 100 kg, and even slightly lower, with the facility of one-month credit or down to Rs 1025 in cash, against government issue price of Rs 1112.50 per bag of 100 kg with the result that the government stock offtake has declined to gross level.
The situation will further aggravate when six more ships carrying imported wheat arrive in November.
The regional food managers, most of them ad hoc promotees despite senior officials awaiting posting, are virtually groping in the dark and are seen running from one mill to another to improve offtake of their wheat stock without success, which will lead the food department to pay an additional amount of Rs 55.205 million per month or Rs 662.500 millionon whole year basis, according to Provincial Food Secretary statement at a meeting of Minfal, while the bank's mark-up continues its process on Rs 5 billion advanced to Provincial Food Department.
The import of wheat has no or very little impact on wheat and flour prices which can be judged by the fact that wheat flour prices in open market are vary from Rs 15 to Rs 16 at Karachi and Rs 13 to Rs 14 elsewhere in urban Sindh which indicates that Karachite are still paying the highest price of wheat flour in the country.
The situation calls for a U-turn in government policy with regard to duty-free import and flourmills. The food department should gradually withdraw from nursing the flourmills and let them stand on their feet and buy wheat from open market for their requirement as Food Department is under no obligation to provide subsidised wheat to flourmills, which more often than not commercially exploit.
The government claimed for providing a huge subsidy Rs 5 million annually to make available wheat flour at affordable price to consumers but the question remains to be answered as to where this subsidy has gone, as it has never been passed on to consumers.
This would not only help to check the commercial exploitation of government-subsidised wheat, cut the budget of empty gunny bags, help combat corruption but would also end the unholy alliance of corrupt food officials. The government should maintain a buffer stock which it should buy in open market whenever needed to check the exploitation of traders and grinding units by stabilising the price structure.
It remains a consensus opinion that the government should discontinue the present system, which has proved both expensive and exploitative against growers and consumers by recommending that the future objectives should be the market based economy, which allocates resources far more efficiently than any man-made system.
The minimum support price system to growers should be done away with and instead they should be given subsidy on quality seeds and other inputs including fertiliser.