Centre imposes stock limit on wheat until FY25 to prevent hoarding, speculation and ensure price stability

The government on Monday imposed stock limits on wheat wholesalers, retailers and processors effective from 24 June in a bid to crack down on hoarders and speculators and prevent the food security situation from worsening.

The permitted stockholding limit was notified as 3,000 tonnes for wholesalers, 10 tonnes for retailers, 10 tonnes for each outlet and 3,000 tonnes at all depots for big chain retailers, and 70% of monthly installed capacity multiplied by the remaining months of the current financial year in the case of processors.

“The decision has been taken to take care of hoarders and black marketers who are trying to gain as sentiment around wheat prices (are) going up amid rumours of the country not having adequate wheat. We want prices of wheat to be stable,” food and public distribution secretary Sanjeev Chopra told reporters.

Chopra said the stock limit has been imposed in view of recent media reports that the prices of essential commodities, including wheat, are increasing.

‘No shortfall of wheat in the country’

“There is no shortfall of wheat in the country. Wheat production is 4-5 million tonnes higher than the previous year,” he added.

Read Also: India plans to reduce wheat import duty from July in a bid to cool prices

The government estimates wheat production in the 2024-25 season to be on par with last year at 112.9 million tonnes.

Chopra said the opening stock of wheat was 8.2 million tonnes (MT) on 1 April 2023 while it was 7.5 MT on 1 April 2024. He said 26.6 MT of wheat has been procured this season against 26.2 MT procured last season. 

Therefore, the shortage of wheat in the opening stock for the next year is 300,000 tonnes, which he claimed is not a concern as the annual requirement of wheat for the national food security Act (NFSA) and other welfare schemes is 18.4 mt and closing stock requirement as of 31 March 2025 is 15.7 mt.

Quoting government officials, Mint on Sunday reported that the government was considering such a move.

Also This: Govt misses wheat procurement target for second consecutive year, procures 26.6 mt—28.7% lower than target

As per February stock limits, wholesalers were permitted to keep only 500 tonnes, retailers 5 tonnes, big chain retailers 5 tonnes for each outlet and 500 tonnes at all depots, processors 60% of monthly installed capacity multiplied by remaining months till April 2024.

Chopra said there is no proposal to review the export ban on sugar and wheat.

On plans for open market sales for wheat, Chopra said, “All options are open to maintain stability in price. We will use one of these tools as and when it is required.”

Meanwhile, consumer affairs secretary Nidhi Khare said pulse prices have cooled off since Friday after stock limits on tur and chana were imposed. Prices in key wholesale markets came down by ₹50-200 per quintal for chana and tur and by ₹100-300 per quintal for Kabuli chana.

The government has come up with a plan to increase the sowing area under tur, urad and onion. “There was no buffer stock for tur in the past two seasons. This will not only moderate pulses, especially tur prices, but will also help us build a buffer stock of 1 million tonnes of tur this year,” Khare told reporters.

Additionally, “farmers are getting higher realization from Rabi onion and the area under kharif onion is expected to be higher at 353,000 hectares against last season’s 285,000 hectares,” Khare added.

The pace of onion procurement for the govenrment buffer this year is comparable with last year, despite a 20% decline in estimated rabi production. Till 20 June, the quantity of onions procured was 70,987 tonnes compared with 74,071 tonnes in the corresponding period last year.