India imposes stock holding limits to curb wheat price rise, hoarding
INDIA—The Indian Central Government has imposed stock-holding limits on traders, wholesalers, retailers, and processors to check the rise in wheat prices and hoarding, effective immediately.
These restrictions will remain in force until March 31, 2025, across all states and Union Territories, the statement read.
This decision follows a high-level meeting last week, chaired by Home Affairs and Cooperation Minister Amit Shah, in which officials were directed to monitor wheat prices closely.
The government had indicated its readiness to intervene in the market to ensure consumer price stability.
Under the new regulations, retail outlets and individual stores of large retail chains are permitted to stock up to 10 tonnes of wheat.
“Setting stock limits was just one measure. We have several other methods to ensure that wheat prices do not spike unreasonably,” said Sanjeev Chopra, secretary, Department of Food and Public Distribution.
The secretary also confirmed that there is no shortage of wheat. Wheat prices have risen by 5.5-6% over the past year. In August, consumer inflation for cereals was notably high at 8.7% compared to the same period last year.
As of April, wheat stocks in state warehouses had fallen to 7.5 million metric tons, the lowest level in 16 years. To control rising prices, the government had to sell a record 10 million tons to flour millers and biscuit makers. At the beginning of April 2023, government warehouses held 8.2 million metric tons of wheat.
The government has mandated all entities to declare their stock positions and regularly update them on the Department of Food and Public Distribution’s portal.
“They have been allotted a 30-day period to comply with the updated limits, which mirror those established last year,” he said.
The limits specify 3,000 tonnes for wholesalers, 10 tonnes for individual retailers, and 10 tonnes per outlet, with a maximum of 3,000 tonnes for large chains.
For processors, the limit is set at 70% of their monthly installed capacity (MIC) multiplied by the remaining months of the 2024-25 fiscal year.
India had imposed a ban on wheat exports in 2022, and according to Chopra, there are no plans to lift this restriction. Similarly, there are no proposals to ease export restrictions on sugar and rice.
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