What caused the wheat flour crisis?

The country was recently hit by a serious wheat crisis and a moderate sugar crisis as the prices of these two indigenous agriculture commodities escalated beyond what is affordable by the common man.

In January, the price of the flour increased by five rupees due to a shortage of wheat supply. Fine flour was being sold between Rs 62/kg to Rs70/kg.

In Karachi, a sack of flour was sold for Rs500. In some parts of the city, a bag of 10kg flour which cost Rs450 before the crisis was sold for Rs700 after an increase of Rs250.

In Lahore, the Punjab Flour Mill Association increased the price of flour by Rs6 per kg, after which it was sold at Rs70 per kg across the province.

Likewise, the price of sugar also escalated from Rs65kg to Rs80 in the past six months.

The wheat flour crisis had been in the making for quite some time. There were clear signs that warned of disruptions to supply in several parts of the country; once the projections proved correct, the increase in the price of wheat flour was inevitable.

Yet, the authorities concerned remained silent, showing little inclination to take steps to protect the consumers from the rising cost of the staple food. Reports of growing shortages in major cities were dismissed nonchalantly by the very people who were supposed to take action to remedy the situation. No surprise then that a full-blown crisis gripped the entire country.

According to a report of Punjab food department, at least 204 mills have been found involved in the wheat shortage. The report alleged that most of the people found guilty of creating the flour crisis hail from strong political backgrounds.

Last week, the Federal Investigation Agency was tasked to probe the shortage of wheat across the country. The Punjab government launched a province-wide crackdown on wheat hoarders and profiteers to control wheat flour prices. The provincial government also decided to take strict action against those involved in creating artificial shortage of flour.

According to some sources, a prominent political figure belonging to the ruling party, was responsible for wheat flour crisis. He has also been chairing or attending numerous official meetings on agriculture, which were also reported by the media. According to media reports, the same figure a was among the beneficiaries of the rising sugar prices.

In March last year, it was reported in the Press that Pakistan was making efforts to open up a potential two million ton wheat export market in Afghanistan and had begun taking special measures based on demands of exporters. In May-June 2019, Pakistan Flour Mills Association (PFMA) had approached the government, seeking an immediate ban on the export of wheat. However, according to reliable sources, the government dismissed the proposal keeping in view the available wheat stocks in the country.

Later in July 2019, the government finally decided to impose a ban on export of wheat and wheat flour amid rising concern over the price hike trend of roti and other wheat-based products.

But in Oct 2019, a newspaper reported, “Pakistan resumed partial export of wheat flour related items to Afghanistan via Torkham border after about two months.” It added that the federal government had banned export of wheat flour and related commodities to Afghanistan since July 30 due to rising domestic demand. “The export quota of wheat flour had also exhausted by the end of July and thus its export was stopped,” the newspaper reported.

The report said that federal government had finally agreed to lift the ban on semolina (sooji), refined flour used in bakery items and fine atta (flour) on September 24 (2019) after prolonged negotiations with the exporters. However, the ban on regular wheat flour was intact.

Meanwhile, the smuggling of wheat flour through unfrequented routes to Afghanistan had picked up momentum during the nearly two-month ban.

The Sindh government didn’t procure wheat during the last harvest. It says it did not lift wheat stocks because of a cash crunch resulting from the centre’s failure to release funds. But that is not quite the explanation to satisfy an earnest inquiry.

Similarly, Punjab needs to come up with plausible reasons for its own inaction against the hoarders said to be responsible for hiking grain prices in the market. The abrupt restrictions it imposed on the inter-provincial movement of wheat and its products had also halted supply to KP and elsewhere.

Above all, the federal government cannot absolve itself of blame. Its decision to allow excessive wheat exports in summer despite the lower-than-targeted harvest has forced it to import wheat to cover the shortages for the next two months. Unchecked smuggling of wheat flour across the porous borders with Afghanistan, and major supply disruptions caused by weather conditions and a strike by goods’ transporters played their part in complicating matters. More importantly, it is poor management and lack of coordination among different tiers of government that led the crisis to overwhelm the poor to low-income population groups, who are already struggling to cope with the rising cost of food. It is they who are suffering the consequences of the authorities’ indifference and negligence.

 

Asad Malik

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