As it has pointed out, with the arrival of imported wheat, at the rate of $145-$148 per tonne, C&F Karachi, the price of the grain in the open market is ruling at Rs 1040 per bag of 100 kg, and even slightly lower, with additional facility of one-month credit, or down to Rs 1025 in cash.
As against this, the government's issue price of wheat stands at Rs 1112.50 per bag of 100 kg, thereby leading to an evident slowdown in the movement of the government's stock to the flourmills.
The alarming situation thus created could worsen with expected arrival of six more shiploads next month.
As for the predicament of the Provincial Food Department in this regard, some idea may be had from the reportedly desperate bids of its regional food managers to improve the outflow of its stocks by persuading flourmills to lift their wheat stock, but without any visible success.
It will, thus, be seen that, as rightly pointed out in the Recorder Report, import of wheat has had little impact on the behaviour of wheat and flour prices.
As it is, wheat flour prices in the open market vary from Rs 15 to Rs 16 in Karachi, and Rs 13 to Rs 14, elsewhere in the urban areas of Sindh. This, incidentally, also reveals that the Karachiites are still paying the highest price of wheat flour in the country.
This has also been pointed out by the Provincial Food Secretary at a meeting of Minfal. All in all, the efforts of the government to ensure reduction in prices of wheat and flour through resort to import, will appear to be ending up in an exercise in futility, which should prove embarrassing for the government and make it think of other ways of satisfying its populist urges.
It may be worthwhile to recall that the Food Departments of Punjab and Sindh, and the Passco were reported to have purchased 2.4 million tonnes of wheat till May 10, that is, 50 percent of the year's procurement target of 4.8 million tonnes.
At the same time, the private sector and the flourmills were also stated to have been aggressively buying fresh wheat from the open market, competing with the public sector, which paid minimum support price of Rs 10 per kg to the farmers. This, certainly, then made the wheat situation look quite comfortable. However, as the ground reality pointed the other way as no respite from high prices of wheat and flour was discernible.
We had also pointed out that almost all the measures adopted to influence the behaviour of prices, in a manner inconsistent with the interplay of market forces of supply and demand, had met with failure as before.
One hopes that learning the right lessons from failure of the approach of duty-free import of wheat, the government would stop the food department from nursing the flourmills, and induce them, instead to buy their wheat requirements from the open market.