Flour price falls as market flooded with cheap wheat

LAHORE : Domestic wheat sector is facing a severe crisis, resulting in a significant price crash. The price of 20kg wheat flour bag plummeted to as low as Rs1,200. Lahore Atta Dealers Association President Haji Yousaf has said that major flour mills have reduced the ex-mill price of their brand of 20 kg flour bag by Rs100 and its price has decreased to Rs1,300 while the retail price dipped to Rs1,400.

Similarly, the ex-mill price of a 20-kg bag of small flour mills has decreased from Rs1,220 to Rs1,120 and the retail price has decreased from Rs1,300 to Rs1200. The drastic price reduction has left farmers and millers reeling, as they struggle to cope with the sudden loss of revenue. Several factors have contributed to the wheat flour price crash including lack of Support Price or failure in enabling private sector for playing proactive role in grain purchase.

The Punjab and Sindh governments have not announced a wheat support price, leaving farmers vulnerable to market fluctuations. This lack of clarity has discouraged farmers from planting enough wheat for local consumption, potentially resulting in looming wheat import. The International Monetary Fund’s repirtex conditions for deregulation of agricultural markets have added to the uncertainty.

The government's policies including the decision to ditch the minimum support price for wheat have left farmers at the mercy of the private sector, causing prices to crash. The wheat crisis has had a devastating impact on growers. Farmers are forced to sell their wheat at throwaway price, incurring significant losses. The cost of production has doubled since 2023, while prices of major crops have dropped by 25 percent, making farming unviable. Farmers have announced nationwide protests, threatening not to cultivate wheat crops next year if their demands are not met. They demanded a fair price for their wheat. Farmers are also seeking government support to ensure fertiliser and other inputs availability at reasonable prices and to enforce its writ to prevent market exploitation.