NationalVOLUME 15 ISSUE # 13

What caused the flour crisis?

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

In January, the price of flour increased by five rupees per kg due to a shortage of the wheat supply. Fine flour was sold between Rs 62/kg and Rs70/kg. In Karachi, a 20kg 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 Rs65/kg to Rs80 in the past six months. The flour crisis had been in the making for quite some time. There were clear signs that warned of disruptions to the 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 officials who were supposed to take action to rectify the situation. No surprise then that a full-blown crisis gripped the entire country.

According to a report of the Punjab food department, at least 204 mills were found involved in wheat shortage. The report alleged that most of the people found guilty of creating the flour crisis hail from strong political backgrounds. The Federal Investigation Agency (FIA) was tasked with probing the shortage of wheat across the country. The Punjab government launched a province-wide crackdown on wheat hoarders and profiteers to control 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 the flour crisis. He has also been chairing or attending numerous official meetings on agriculture. According to media reports, the same figure 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 the demands of exporters.

In May-June 2019, the 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 the 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 the Torkham border after about two months.” It added that the federal government had banned the 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 the 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. On the other hand, 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 federal government’s failure to release funds. But that is not quite the explanation to satisfy an earnest inquiry.

Similarly, the Punjab needs to come up with plausible reasons for its own inaction against the hoarders 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 supplies to Khyber-Pakhtunkhwa and elsewhere.

Above all, the federal government cannot absolve itself of the blame. Its decision to allow excessive wheat exports in the 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 the government that led the crisis to overwhelm the poor and low-income groups, who are already struggling to cope with the rising cost of food. They had to face the consequences of the authorities’ indifference and negligence.