Centre reduces wheat stock limits to control prices
What's the story
The Indian government has imposed new stock limits on wheat for wholesalers, retailers, and processors. The move is aimed at keeping prices stable and ensuring adequate food grain supply across the country. The new stock limit will remain in force till March 31, 2025. The move comes as part of the government's efforts to regulate wheat prices amid inflationary pressures.
Revised regulations
New stock limits for wholesalers and retailers
Under the new regulations, wholesalers can now hold up to 250 tons of wheat, a major drop from the earlier limit of 1,000 tons. Retailers also had their stock limit revised down to four tons per retail outlet from an earlier cap of five tons. Each outlet of a large retail chain can stock up to four tons of wheat. The total stock across all outlets and depots is limited to four tons times the total number of outlets.
Processor guidelines
Stock limits for processors and registration requirements
Processors can now hold 50% of their Monthly Installed Capacity (MIC) multiplied by remaining months till April 2025. All entities dealing with wheat stocking must register on the wheat stock limit portal and update their stock position every Friday. Entities failing to register or violating these stock limits will face punitive action under Section 6 & 7 of the Essential Commodities Act,1955.
Oversight measures
Government's monitoring of wheat stock position
The Department of Food and Public Distribution is closely monitoring the stock position of wheat to control prices and ensure its availability. Entities holding stocks higher than the newly prescribed limit must reduce their stocks to the mandated limits within 15 days of the notification's issue. This measure is part of broader efforts by the government to manage food security, prevent hoarding, and curb speculative practices.
Market trends
Wheat production and pricing trends
The average retail price of wheat stood at ₹32.82/kg on Thursday, a 6.28% increase from ₹30.88/kg a year ago. The average retail price of wheat flour also increased by 5.37% to ₹38.06/kg from ₹36.12/kg during the same period last year. Despite excessive heat before harvesting and unseasonal rains in March affecting wheat harvests in recent years, India recorded a total production of 1,132 lakh tons during Rabi 2024 season, indicating ample availability of wheat in the country.