Faced with a surge in wheat and flour prices, the Punjab government is preparing to release grain from its reserves, setting a fixed price of Rs2,900 per 40kg to counter market volatility. The proposal is awaiting approval from Chief Minister Maryam Nawaz, according to the provincial Commodities and Price Control Department.
Prices Spike Amid Tight Supply
Wheat prices in Punjab jumped by Rs300 per maund (40kg) this week, hitting Rs3,100, while flour has risen by Rs500 per 20kg bag over the past month. This rapid increase is already squeezing households and threatening further hikes in roti prices, with tandoor operators warning of a possible Rs2 increase per loaf from the current Rs14.
The province currently holds 0.89 million tonnes of carryover wheat, which could be released to flour mills in a bid to cool the market.
A Shortfall in National Output
Pakistan’s 2024-25 wheat harvest has fallen well short of expectations, totaling 28.98 million tonnes from 22.5 million acres, compared to last year’s 31.8 million tonnes and a target of 33.58 million tonnes. With a population of over 250 million and per-capita consumption around 115kg annually, the country faces a supply gap even before accounting for the 1.2 million tonnes needed for seed and livestock feed.
Market Liberalization and Its Fallout
This year marks a departure from Pakistan’s longstanding wheat policy. Under commitments to international lenders, both federal and provincial governments have largely withdrawn from direct procurement and avoided setting a minimum support price. For years, Punjab alone purchased over 4 million tonnes annually, releasing stocks later to curb seasonal price hikes.
Critics argue that stepping back from regulation has created room for speculative trading. Maryam Nawaz recently accused “mafias” of manipulating the market by buying cheap from farmers and reselling at inflated rates—a trend that pushed procurement prices as high as Rs4,000 per 40kg last season.
Why It Matters
The coming weeks will test whether Punjab’s intervention can bring relief to consumers. With a supply crunch, speculative buying, and global wheat prices also rising, any delay in government action risks further inflationary pressure on basic food staples.
