Wheat crisis deepens as KP-Punjab price gap widens, PPP alleges procurement irregularities

A sharp Rs680 per maund difference in government wheat release prices between Khyber Pakhtunkhwa (KP) and Punjab has opened a new fault line in the country's grain market, with critics warning the gap could fuel smuggling and hoarding.

According to a notification issued by the Food Directorate of Khyber Pakhtunkhwa on July 27, 2026, the provincial cabinet approved the daily release of 2,000 metric tonnes of wheat to operational flour mills across KP at Rs11,200 per 100 kilograms, inclusive of bardana — working out to Rs4,480 per 40-kilogram maund. 

The decision, based on recommendations from the Cabinet Oversight Committee on Wheat made on July 17, 2026, cited prevailing high prices and grain shortages.

Punjab, by contrast, continues releasing wheat to flour mills at Rs3,800 per maund, meaning KP mills now pay 17.9% more for the same government wheat than mills in Punjab.

Market insiders said the disparity is unsustainable given the severity of the wheat crisis and warned it creates two serious problems. First, it opens the door to inter-provincial smuggling, as traders can buy wheat at Punjab's lower rate and transport it to KP or other wheat-deficit areas where open market prices are higher, with the Rs680 margin remaining profitable even after transport costs. 

Second, it distorts the milling sector, as mills have little incentive to sell flour at controlled rates when they can instead resell government-purchased wheat in the open market or to other provinces.

Since KP produces far less wheat than it needs and relies heavily on Punjab supplies, the price gap risks triggering wheat leakage from the neighbouring province.

Punjab's lower issuance price has also added to the provincial exchequer's burden, since wheat procured by the Pakistan Agricultural Storage and Services Corporation (PASSCO) is being bought at around Rs4,200 per maund — a higher subsidy cost compared to KP's pricing mechanism, which involves no subsidy.

To improve transparency, KP has introduced compliance conditions requiring flour mills lifting government wheat to maintain moisture levels not exceeding 13.5% and install CCTV cameras with at least 30 days of video storage, aimed at preventing diversion, smuggling, and the sale of substandard flour.

The Director General (DG) Food Punjab did not comment when contacted regarding the province's lower wheat release price.

PPP alleges irregularities in Punjab's wheat procurement

Separately, the Pakistan Peoples Party (PPP) criticised the government's wheat procurement policy, alleging that contracts in Punjab were awarded to 11 companies using public funds, with police involvement in the process.

Addressing a press conference at the PPP Central Secretariat in Islamabad on Monday, PPP Central Information Secretary Nadeem Afzal Chan, Sindh Provincial Minister Saeed Ghani, MNA Mehreen Bhutto, and Sindh government spokesperson Sadia Javed said the party had already warned of a looming wheat shortage.

Chan claimed Pakistan recorded a wheat surplus only during the PPP's tenure, alleging that despite the federal government announcing procurement of one million tonnes of wheat, farmers were not being paid directly. 

He also criticised the Punjab government over recent flooding, saying the damage stemmed from sewerage system failures and poor planning rather than heavy rainfall, and questioned the ownership of the 11 companies awarded wheat contracts.