KARACHI: Wheat and flour prices have surged sharply in Karachi’s wholesale market, raising fresh concerns about food inflation and market supply, despite government assurances of sufficient national stocks.

Wholesale wheat now sells for Rs90 per kg, up from Rs72 in mid-August and Rs62 in July. This increase has pushed the price of flour no. 2.5 to Rs97 per kg and fine flour to Rs103, compared with Rs81 and Rs85, respectively. In early August, these prices were Rs74 and Rs79 per kg.

Chakki flour varieties are now available at wholesale rates between Rs110 and Rs135 per kg, marking an average rise of Rs20 per kg. According to the Sensitive Price Index (SPI) for the week ending Aug 28, the price of a 10kg wheat bag climbed to Rs794 from Rs640. Consequently, 20kg wheat flour bags now sell between Rs1,700 and Rs2,100, while one kg of fine flour is priced at Rs106 — up from Rs1,350–1,700 and Rs93, respectively, in early August.

With flour prices continuing to rise, a further burden on consumers is expected once roti and naan (bread) sellers adjust their prices to reflect higher input costs.

Despite govt claims of adequate stocks, wholesale wheat rate hits Rs90/kg in Karachi

This surge comes despite a statement last week by National Food Security and Research Minister Rana Tanveer Hussain, who, while chairing the 8th Wheat Board meeting, claimed the country had 33.47 million tonnes of wheat against a requirement of 33.58m tonnes — a marginal shortfall of just 0.11m tonnes. He said the situation was under control and ruled out wheat imports, asserting that existing stocks were sufficient.

However, market stakeholders dispute the government’s assessment. Chairman of the Karachi Wholesalers Grocers Association (KWGA), Rauf Ibrahim, said the claimed availability figure includes 400,000-500,000 tonnes from last year’s leftover stock. He estimated the actual crop size at 29-30m tonnes this year, of which 3-4m tonnes have already been diverted for livestock feed.

He questioned the disconnect between rising prices and the government’s claim of ample stocks. He criticised the government’s decision to suspend wheat procurement by flour mills and remove the support price under the IMF programme, saying it had created a free-market environment that benefits hoarders, speculators, and flour millers — but not consumers.

Rauf warned that the discontinuation of wheat procurement had left flour millers without official quotas, which previously helped stabilise the market. He added that farmers who sold wheat at Rs2,200 per 40kg are now at a loss, while flour millers continue to store grain in private silos.

With the next wheat crop due in March/April 2026, he urged the government to act urgently to curb hoarding and safeguard consumers, warning that flour prices could exceed Rs200 per kg in the coming months if left unchecked.

A flour miller echoed concerns about the stock data, claiming the total crop size this year is closer to 28m tonnes. He also feared that flooding in Punjab may have damaged some of the carryover stock being counted in the government’s total availability figures.

Asad Ali of Topline Securities said the recent wheat price rebound could incentivise farmers in the upcoming Rabi season. After facing depressed returns in the previous crop cycle, the recovery in prices may boost sowing sentiment.

Agricultural growth slowed to 0.6pc in FY25 from 6.4pc in FY24, as adverse weather, water shortages, and rising input costs undermined farm profitability. Major crop output fell 13.5pc year-on-year, with wheat production declining by 9pc. According to FFC estimates, farmers lost Rs10,695 per acre this year, compared with profits of Rs13,572 per acre last season.

SBP estimates an 11pc decline in wheat production for FY25 due to weak profitability, which discouraged sowing. Asad noted that although current wheat prices remain 43pc below the previous peak of Rs1,256 per 10kg, the latest price spike offers some relief to struggling farmers.

He added that the current rebound may help restore confidence in wheat cultivation, provided the government ensures better market regulation and protection for farmers.

Published in Dawn, September 2nd, 2025