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Wheat crisis: ‘Higher exports to Afghanistan lead to flour shortage’

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By Ijaz Kakakhel
Daily Times (Pakistan)
Sunday, December 09, 2007

ISLAMABAD: Export of wheat flour to Afghanistan in large quantities lead to a flour shortage in the country that forms the very genesis of the current wheat crisis, officials in the ministry of food, agriculture and livestock (MINFAL) told Daily Times here on Saturday.

As usual 1,200 to 1,300 tonnes of flour was exported to Afghanistan per day and the government made proper preparation for it but recently about 2,000 tonnes of wheat were exported to Afghanistan, said Additional Secretary and Spokesman, MINFAL Raja Hussain Shahid. The demand for flour has jumped up in Afghanistan that was why the export to Afghanistan increases.

In order to ensure smooth supply of flour in domestic market, the government has imposed 35 percent duty on export of the commodity to Afghanistan. However, the imposition of such duty has no impact on export of wheat flour to Afghanistan due to higher demand as well as higher prices there, he maintained.

The government provides subsidy on wheat to flour mills for selling the commodity in local markets on lower prices. But the millers are exporting the commodity to Afghanistan to earn abnormal profits instead of selling it in the local markets.

Keeping in view higher demand for flour export to Afghanistan, the private sector had announced the export of one million tonnes flour to Afghanistan this year. Earlier, the private sector exported 0.6 million tonnes of flour to Afghanistan.

The government took several measures to ensure smooth supply of flour to residents through utility stores and other means. A 20-kg flour bag is being sold for Rs 260 at utility stores, but store managers said that the demand was high because of artificial shortage. Although, the government was supplying the grain to the flourmills at the lowest possible rates, the mills were selling their quota in the local market at high rates and the MINFAL termed it a reason behind the present flour crises in the country.

Although the prices of flour did not register a big increase in its price but the people expected that it might be increased in next few days as happened during the month of Ramdan, said another official. At present the prices of flour in the local market vary from Rs 300 to Rs 320 per 20 kg bag. People demand flour at reasonable prices in the markets, not only at a handful of utility stores.

The government seems helpless to control such type of crises (either wheat or sugar), which has made the lives of common people miserable. Due to unemployment and price hike, the middle and lower middle classes are more under pressure as compared to other segments of the society. Hoarding, unethical and illegal practices under the connivance of the authorities concerned, the big businesses, middlemen and retailers are in nexus to exploit the situation. These three form a mafia and they create artificial shortage of a commodity to reap huge profit at the cost of the poor.

People accused the authorities of giving a free hand to the profiteers. No action is being taken against hoarders, who are artificially raising the prices of flour, flour purchasers told this scribe.

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Written by afghandevnews

December 10, 2007 at 8:17 pm

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