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Flour price high: Wheat imports

Karachi: Wheat imports from July to December 2013 have failed to control flour rate, with millers continuing to push up the commodity’s price on one reason or the other.

Traders, however, insist that wheat buying has brought some stability in the price.

According to the Pakistan Bureau of Statistics (PBS), total wheat import bill during July-January 2013-2014 stood at $107.2 million from arrival of 377,402 tonnes compared to nil imports in the same period of last fiscal year.

The figure of wheat imports in the last seven months was the second highest after palm oil imports, but the overall import bill of food items fell by nine per cent in terms of value due to 26.6pc drop in tea imports followed by 24pc in soya bean oil, 21pc in pulses, 10pc in palm oil and 15pc in other food items.

PBS figures revealed zero imports in January 2014 compared to 11,387 tonnes ($3.2m) in December 2013.

Traders and millers had already hinted suspension in wheat imports from January 2014 onwards due to rising prices in world markets coupled with new wheat crop arrival in March.

Despite a slight demand and supply gap, wheat imports were initiated from July 2013 to control prices. However, consumers continued to witness frequent flour price shocks in the last six to seven months. Flour millers cite different reasons for this, including increase in wheat support price, jump in cost of imports due to rupee devaluation against dollar, higher price of imported wheat, transportation charges due to rise in diesel rates, and massive hike in power rates.

Karachi Wholesalers Grocers Association (KWGA) chairman Anis Majeed offered a different view. “Wheat imports have actually stabilized flour rates from July 2013 till date. Otherwise, the prices would have risen alarmingly.”

Consumers are now paying Rs42 per kg for wheat flour No.2.5 while the rate of chakki and maida (super fine flour) is Rs50 per kg. Fine flour is priced between Rs47-48 per kg. When the present government took over in June last year, the rate of flour No. 2.5 was Rs37-38 per kg while chakki and fine flour were available at Rs44 and Rs42 per kg, respectively.

Locally produced wheat was available at Rs3, 200 per 100 kg bag in June 2013 compared to its current rate of Rs3, 850-3,875 in the open market. Imported wheat price in July 2013 was 3,300-3,400 per 100 kg bag after adding freight and transportation expenses compared to current rate of Rs3, 750.

On the contrary, wheat exports remained dismal as only 20,079 tonnes were shipped fetching only 7m dollars in July-January 2013-2014 compared to 138,567 tonnes ($43.4m) in the same period last fiscal.

In January 2013, wheat exports stood at 252 tonnes ($104,000) compared to 11,569 tonnes ($3.8m) in January 2013.

 

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