The widening gap between official and market prices of flour has raised fears of a supply crisis in Karachi after the city administration fixed new retail rates despite a sharp rise in wheat prices in the open market. The Karachi commissioner issued a notification fixing the official retail price of regular flour at Rs125 per kilogram, fine flour at Rs135 per kilogram, and chakki flour at Rs145 per kilogram.
Millers Reject Official Rates as Economically Unviable
Flour millers and chakki owners have rejected the rates as economically unviable, arguing that soaring wheat prices have pushed production costs well above the government's prescribed prices. According to the notification, the wholesale price of regular flour has been fixed at Rs122 per kilogram and fine flour at Rs132 per kilogram, while chakki flour has been capped at Rs145 per kilogram.
Market Prices Remain Significantly Higher
Despite the official rates, market prices remain significantly higher. Regular flour is currently selling between Rs145 and Rs150 per kilogram, fine flour between Rs160 and Rs170 per kilogram, while chakki flour is being sold at around Rs160 per kilogram across the city. This discrepancy has led to concerns that flour may disappear from regulated outlets, forcing consumers to pay higher prices in the open market.
Flour Mills Association Chairman Junaid Aziz warned the Sindh Food Department that mills could not purchase wheat at prevailing market rates and sell flour at government-fixed prices. He stated that wheat in the open market had climbed to Rs116 per kilogram and prices continued to fluctuate daily, making the notified rates unsustainable. Aziz emphasized that the official pricing mechanism only worked when the government supplied subsidized wheat to mills.
Potential Supply Disruptions
Industry insiders fear that the price cap could lead to hoarding and artificial shortages, as millers may reduce production to avoid losses. The Karachi administration has not yet announced any subsidy or intervention to bridge the gap, leaving the market to adjust on its own. Consumers are already feeling the pinch, with many reporting difficulty in finding flour at the official price in designated shops.
The situation mirrors previous crises in the city, where price controls without adequate supply-side measures led to black markets and increased hardship for low-income households. The Sindh government has been urged to either provide subsidized wheat to mills or revise the official prices to reflect current market realities.
