Nearly 40 percent of flour mills in the Rawalpindi and Islamabad region have shut down after suffering continued losses, with industry representatives warning that more closures could follow unless the Punjab government changes its wheat and flour policies.
The concern was raised in an appeal to Punjab Chief Minister Maryam Nawaz by former Pakistan Flour Mills Association Punjab Vice Chairman Chaudhry Afzal Mahmood, who said the milling industry in the twin cities was facing a deep crisis due to inconsistent policies, unequal wheat distribution, and official intervention in flour pricing.
According to Mahmood, two flour mills owned by him have already closed after posting losses over the past two years. He claimed that around 40 percent of mills in the region had ceased operations, leading to billions of rupees in lost private investment and a decline in government revenues collected through electricity-related taxes and income tax.
Industry representatives said flour mills in southern Punjab have a major cost advantage because they have easier access to locally produced wheat. In contrast, mills in Rawalpindi and Islamabad have to buy wheat from private markets and bear additional transport costs of Rs. 200 to Rs. 250 per maund.
Millers argued that this cost difference has created an uneven business environment across the province. They also alleged that flour supplied by Punjab-based mills through official channels is being sold at lower prices in the twin cities, adding further pressure on local producers.
The appeal said flour prices are being effectively controlled through administrative measures, while mill owners are being forced to sell below their actual production costs.
According to the document, mills in the region are currently being issued permits for only 40 tonnes of wheat, or about 400 bags, every four days. Industry representatives said this allocation is too low to keep mills running efficiently.
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 including electricity bills, salaries, and other operating costs, millers estimate losses of up to Rs. 600 per maund.
The flour industry also criticised what it called excessive bureaucratic control and said policy decisions are often communicated informally without long-term planning. According to millers, repeated policy shifts have created uncertainty and made business planning increasingly difficult.
The appeal warned that mill closures have already caused job losses for thousands of workers and reduced government collections linked to social security, workers’ welfare, and other industry-related revenue streams.
Industry representatives have urged the Punjab government to ensure equal wheat distribution across regions, restore wheat quotas for closed mills, adopt a uniform flour pricing system, and move away from administrative controls in favour of a market-based mechanism.
They also said that low-markup financing for wheat procurement could help millers increase competition, improve flour availability, and offer consumers better prices and quality.
The Punjab government has not yet issued a public response to the latest concerns raised by the flour milling industry.
