Nearly 40 percent of flour mills in the Rawalpindi and Islamabad region have shut down after suffering sustained losses, with industry representatives warning that more closures could follow unless the Punjab government revises its wheat and flour policies.
The warning was issued in an appeal addressed to Punjab Chief Minister Maryam Nawaz by former Pakistan Flour Mills Association Punjab Vice Chairman Chaudhry Afzal Mahmood. The appeal claimed that inconsistent policies, unequal wheat distribution and administrative intervention in pricing had pushed the flour milling industry in the twin cities into a severe crisis.
According to the industry representative, two flour mills owned by him have already ceased operations after recording losses over the past two years. He claimed that around 40 percent of mills in the region have closed, resulting in the erosion of billions of rupees in private investment and reducing government revenues generated through electricity related taxes and income tax collections.
Millers argued that flour producers in southern Punjab enjoy a significant advantage because of easier access to locally produced wheat, while mills in Rawalpindi and Islamabad must procure wheat from private markets at additional transportation costs of Rs. 200 to Rs. 250 per maund. They alleged that this disparity has created an uneven competitive environment across the province.
The appeal further alleged that flour supplied by Punjab-based mills through official channels is being sold at lower rates in the twin cities, putting additional pressure on local millers. Industry representatives claimed that flour prices are being fixed through administrative measures while mill operators are being forced to sell below their actual production cost.
According to the document, mills in the region are currently receiving permits for only 40 tonnes of wheat, or approximately 400 bags, every four days. Millers described the allocation as insufficient to maintain viable operations. They claimed that while the official wheat price stands at Rs. 4,100 per maund, flour prices are effectively being fixed at around Rs. 4,000 per maund. After accounting for electricity costs, salaries and other operating expenses, they estimate losses of up to Rs. 600 per maund.
The industry also criticized what it described as excessive bureaucratic control over the sector and alleged that policy decisions are frequently communicated through informal channels without long term planning. Millers argued that repeated policy changes have created uncertainty and made business planning increasingly difficult.
The appeal warned that the closure of mills has already resulted in job losses for thousands of workers and reduced collections under social security, workers’ welfare and other government revenue streams linked to the industry.
Industry representatives called on the government to ensure equal wheat distribution across regions, restore wheat quotas for closed mills, adopt a uniform flour pricing mechanism and replace administrative controls with a market based system.
The flour milling sector also argued that providing low markup financing directly to millers for wheat procurement could have increased competition and improved flour availability while helping consumers benefit from lower prices and better quality products. The Punjab government has not yet publicly responded to the industry’s latest concerns.
