Wheat prices in Hyderabad's open market have surged to new highs, with a 100-kilogram bag selling at Rs11,800 on Sunday, up from Rs11,100 a week earlier. This marks a rise of Rs700 over the past five days, driven by allegations of government inaction against the wheat mafia and hoarders. The spike has raised fears that flour prices will increase again across Sindh, as retail flour currently sells at Rs44 per kilogram in most areas of the city.
Procurement failures and hoarding
According to market sources, the Sindh Food Department has failed to meet its wheat procurement target for this year. The Sindh government and the department are accused of leaving the wheat mafia and hoarders unchecked, allowing them to exploit the public. As a result, the mafia is selling wheat at self-determined rates in the open market, and the cost is being passed on to consumers in the form of expensive flour.
Traders claim that influential wheat mafia groups, along with investors linked to the trade, are stockpiling wheat on a large scale in various warehouses across Hyderabad and adjoining districts. Officials are reportedly aware of these stocks, but no action is taken due to the mafia's alleged official patronage. Market insiders also noted that Hyderabad's open market sets the tone for wheat prices in the province; when wheat becomes expensive there first, Karachi sees a hike, followed by other cities in Sindh.
Price increase over three months
The Hyderabad Flour Mills Owners Welfare Association reported that three months ago, when the new wheat crop arrived in Sindh, a 100-kilogram bag was priced at Rs7,800. However, due to hoarding and the Food Department's failure to buy wheat, the price has increased by Rs4,000 per bag in just three months.
Association General Secretary Haji Najamuddin Chohan said, “We have been writing to the prime minister and the Sindh chief minister for a long time, urging wheat imports to avoid a possible crisis. We have been highlighting the emerging situation and requesting the government to import wheat to prevent it, but there has been no response from either government, which is further emboldening the mafia.”
Warehouse capacity and government stock
Chohan claimed that the Food Department Sindh is facing serious difficulties in achieving the government's 1 million metric ton wheat procurement target. According to the association, Hyderabad's three major warehouses – Sasso Godown at Hala Naka Bypass, Pasco Godown at SITE, and Qasim Road Godown – have a combined capacity to store 500,000 to 600,000 bags. But currently, only 1,800 to 2,000 government-procured bags are present in these warehouses. Chohan said this shows that the mafia bought wheat cheaply from farmers and hid it.
Delayed impact on retail flour prices
A flour mill owner, requesting anonymity, explained why retail flour prices do not rise immediately after wheat becomes expensive. He said every mill owner has wheat stock for a few days of milling, which delays the pass-through of higher wheat costs to consumers. However, with wheat rates climbing, traders say a further increase in retail flour prices is now likely.
