Urban consumers across Pakistan are facing the prospect of a severe flour shortage as the All-Pakistan Flour Mills Association (PFMA) initiated a nationwide strike on Thursday. The strike is in response to a newly imposed withholding tax, which has sparked widespread disruption in flour supply chains in numerous urban centers.
The protest has seen support from owners of atta chakkis (small wheat grinding units) and flour dealers in various towns, further intensifying the impact on flour availability. PFMA Chairman Asim Raza has declared that the strike will persist until the association’s demands are met.
Mr. Raza voiced strong objections to the withholding tax, highlighting that it compels flour mills to act as withholding agents for tax collection. He pointed out that this measure would increase flour prices by Rs8 per kilogramme.
“The tax measure is unacceptable and impracticable as flour dealers are refusing to lift their consignments instead of sharing their tax details for withholding tax purposes,” Mr. Raza explained, warning that the strike would significantly disrupt the supply chain.
The imposition of a Rs600 tax on a Rs11,000 flour bag was described by Mr. Raza as inappropriate, countering Punjab Food Minister Bilal Yasin’s claim that the strike had been postponed until after Ashura (July 17). “Neither the government nor the FBR has contacted us for talks or to reconsider the strike,” he added.
The strike has effectively halted wheat grinding and supply nationwide, leading to widespread flour shortages. “We don’t wish to trouble the public during Muharram, which is why the industry continued to supply flour to the market until July 10 despite bearing a tax burden of millions of rupees,” said Iftikhar Ahmed Mattoo, chairman of PFMA’s Punjab chapter.
However, Mr. Mattoo stressed that the tax burden had become unsustainable. “Extreme measures have to be taken,” he stated, noting that flour mills across the country had joined the strike to ensure the industry’s survival.
“We are not against the tax. But it’s impossible to be a withholding tax collection agent for flour dealers, particularly because the tax amount to be withheld by the dealers will be more than the wheat grinding charges of flour mills,” Mr. Mattoo explained. He added that millers are already under financial strain due to rising electricity bills, and the additional 2.5 per cent withholding tax “will further ruin our business.”
“The government needs to reconsider and withdraw the tax on wheat products; otherwise, it will inevitably increase prices, affecting consumers and retailers alike,” he urged.
With 1,725 flour mills in Pakistan — 1,100 in Punjab, 300 each in Sindh and Khyber Pakhtunkhwa, and 25 in Balochistan — the daily national flour consumption stands at around 45,000 tonnes, according to the PFMA. The ongoing strike has already halted flour supply to grocery stores in Lahore, with market stocks expected to last only one week.
An official of the Grocery Stores Association has called for dialogue between the government and flour mills to resolve the issue and avoid an extreme measure like a strike.
In Karachi and Hyderabad, flour mill owners have also joined the strike, stopping wheat grinding and causing flour shortages in restaurants. Aamir Abdullah, PFMA’s chairman for Sindh, confirmed an indefinite strike until the government withdraws the tax measures, noting that the suspension of wheat supply has also affected the bran supply for livestock.
Similar reports have emerged from Peshawar and Balochistan, where flour mills and dealers have joined the strike, causing market closures and exacerbating flour shortages.