June 24th 2024.
The Indian government made an announcement on Monday regarding the imposition of restrictions on the storage of wheat by wholesalers, retailers, and processors. This decision was made in an effort to prevent hoarding and control the prices of wheat. These stock limits will remain in effect until March 31, 2025. Additionally, the government stated that they have no plans to lift the ban on wheat exports at this time. However, they may consider other measures, such as reducing import duties, if necessary, to keep retail prices stable. Currently, there is a 40% import duty on wheat.
The Union Food Secretary, Sanjeev Chopra, assured the public that there is an ample supply of wheat in the country. The purpose of these stock limits is to prevent market speculations and hoarding of the food grain. He emphasized that the government wants to dispel any concerns about a shortage of wheat and maintain stable prices. Last week, similar stock limits were imposed on tur and chana dals to regulate their prices.
Chopra explained that the stock limits will apply to traders/wholesalers, retailers, big chain retailers, and processors in all States and Union Territories. They will be required to report their wheat stocks every Friday on a designated portal. If their stocks exceed the prescribed limit, they must bring it down within 30 days of the notification. The government issued the Removal of Licensing Requirements, Stock Limits, and Movement Restrictions on Specified Foodstuffs Order, 2024, which will be in effect from June 24, 2024, until March 31, 2025.
The stock limits will vary depending on the entity, with traders/wholesalers allowed to hold 3000 tonnes, retailers 10 tonnes for each outlet, big chain retailers 10 tonnes per outlet and 3000 tonnes at all their depots, and processors 70% of their monthly installed capacity multiplied by the remaining months of the 2024-25 financial year. In a recent estimate, the Union Agriculture Ministry reported a record wheat production of 112.92 million tonnes for the 2023-24 crop year, compared to 110.55 million tonnes in the previous year.
Chopra also stated that the government has procured 266 lakh tonnes of wheat as of June 18, 2024, for the 2024-25 marketing year, compared to 262 lakh tonnes in the previous year. The opening stock of wheat on April 1, 2023, was 82 lakh metric tonnes, and on April 1, 2024, it was 75 LMT. This shows a shortage of only 3 LMT, which Chopra assured is sufficient for the government's food law and other welfare schemes. He also clarified that the stock limit was imposed due to reports of rising prices of essential commodities, including wheat, and is just one of the tools the government can use to tackle this issue.
When asked about the possibility of sugar exports, Chopra stated that the government is not currently considering any proposals. They have not issued any permits for sugar exports in the 2023-24 marketing year. According to Consumer Affairs Secretary Nidhi Khare, the government's decision to impose stock limits on tur and chana dals has led to a decrease in their retail prices. Overall, these measures are aimed at maintaining stable prices and preventing hoarding of essential commodities.
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