Centre imposes stock holding limit on wheat; says no shortage anywhere

The decision to re-impose the stock limit that ended in March 2024 was taken even though wheat production in FY24 is expected to be over 112 million tonnes

The central government has again imposed the stock-holding limit on wheat with immediate effect to bring down prices and check hoarding.

It said it was open to exploring all options to bring down prices.

The government imposes 40 per cent import duty on wheat while the effective duty is almost 44 per cent due to cess and surcharge.

The decision to re-impose the stock limit, which was over in March 2024, was taken even though wheat production in FY24 is expected to be over 112 million tonnes.

Addressing a press conference, Union Food Secretary Sanjeev Chopra said there was no wheat shortage in the country, and the Centre had adequate reserves to meet all requirements.

“We had an opening stock of wheat of around 7.5 million tonnes while the opening stock last year on April 1 was 8.2 million tonnes. Therefore, the stock this year is 0.7 million tonnes less, to begin with. Furthermore, wheat procurement this year till now is 26.6 million tonnes, which is 0.4 million tonnes more than last year. Therefore, on a net-net basis, availability is just 0.3 million tonnes lower than last year, so there is no shortage of wheat in the country,” Chopra said.

 

He said despite this stock-holding limits were being re-imposed to keep speculators at bay and check hoarding by traders holding on to their stocks.

Chopra said there was no proposal to lift the ban on wheat export or the curbs on rice export. Under new rules, retail outlets and individual stores of big chain retailers are allowed to stock up to 10 tonnes of wheat, an official statement said.

Traders, wholesalers, and large depots of big chain retailers face a cap of 3,000 tonnes each.

For processors, the limit is set at 70 per cent of their monthly installed capacity (MIC) multiplied by the remaining months of 2024-25.

The government has asked all entities to declare their stock positions and regularly update them on the Department of Food and Public Distribution’s portal.

Those holding stocks above the prescribed limits have been given a 30-day window to comply with the new norms. The decision comes after a high-level meeting, chaired by Union Home Affairs and Cooperation Minister Amit Shah, held last week, and officials were asked to monitor wheat prices closely.

The government has said it is ready to intervene to ensure price stability for consumers.

Chopra said wheat procurement, particularly in Madhya Pradesh, was lower than the target this year due to some concern affecting the harvest there because temperatures were higher than normal last winter and farmers sold their produce to private traders because they got higher prices.

The official data shows wheat and wheat flour prices have risen up to Rs 2 per kg over last year.

As of June 20, the average retail price of wheat stood at Rs 30.99 per kg, up from the Rs 28.95 a year ago.

Wheat flour prices have climbed to Rs 36.13 against Rs 34.29 last year.

Consumer Affairs Secretary Nidhi Khare, who was present at the press conference, said the stock limits imposed on tur (pigeon pea) had started bearing results and prices had softened by Rs 50-200 per quintal in major centres after the order.

She said the government had good stocks of onions and the good monsoon should increase the area under cropping.

“We have targeted growing onions in around 353,000 hectares this Kharif as against last year’s acreage of 285,000 hectares and hope the target will be met,” Khare said.

She said a slight late harvesting of kharif onions was beneficial because it ensured that peak supplies started during the festival season when demand was usually high for the bulb.