New Delhi: Govt tightens wheat stock limits to control prices
The Indian government has tightened wheat stock limits for traders, wholesalers, and processors to stabilize prices and prevent hoarding. Effective until March 2025, the revised stock limits reduce holdings for traders from 3,000 to 2,000 tonnes. Big-chain retailers’ depot limits will now depend on the number of outlets, and processors face reduced stock limits from 70% to 60% of installed capacity.
New Delhi: The government on Friday tightened wheat stock limits for traders, wholesalers, big-chain retailers, and processors, a move intended to bolster food security and curb price volatility.
The stock limit provisions announced on 24 June will now be in effect until 31 March 2025 across all states and Union Territories, the consumer affairs ministry said in a statement.
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The revision is part of the government’s broader effort to moderate wheat prices and prevent hoarding and speculative practices.
“For traders and wholesalers, the stock limit has been reduced from 3,000 tonnes to 2,000 tonnes,” it said.
This reduction is intended to limit the quantity held by large-scale entities and ensure a more balanced supply in the market.
The ministry added that India’s wheat production reached about 112.9 million tonnes during the rabi or winter sowing season of 2024, “ensuring a sufficient supply of wheat across the country”.
For big chain retailers, a sharp cut
Retailers will see no change in their stock limits, which remain at 10 tonnes per retail outlet. This measure will ensure that small-scale retailers can continue to operate without undue restrictions while still contributing to market stability.
Big chain retailers will also experience a modification in their stock limits. Previously set at 10 tonnes per outlet and 3,000 tonnes across all depots, the new rules set the depot limit to 10 times the total number of outlets.
The “10 times the total number of outlets” refers to the number of outlets operated by a big chain retailer. If a retailer operates 50 outlets, the new stock limit for their depots would be 500 tonnes (10 x 50), compared to the previous fixed limit of 3,000 tonnes.
This adjustment aligns depot stock limits more closely with the retailer’s operational scale.
For processors, the stock limit adjustment involves a reduction from 70% of the monthly installed capacity (MIC) multiplied by the remaining months of the fiscal year 2024-25 to 60% of the MIC, the ministry said.
The revised stock limits are part of the removal of licensing requirements, stock limits, and movement restrictions on specified foodstuffs (amendment) order, 2024.
The government’s proactive stance is expected to stabilise wheat prices and prevent market disruptions during the upcoming months.
“All wheat stocking entities have to update their stock information every Friday and failure to register or adhere to the stock limits will result in penalties under Sections 6 and 7 of the Essential Commodities Act, 1955,” the ministry said in its statement. “Entities exceeding the new stock limits must reduce their holdings to the prescribed levels within 15 days of the notification.”
Retail inflation in August inched up to 3.65% from July’s 3.6% rise, above the 3.5% increase economists polled by Mint had expected, chiefly on account of stubborn food prices. But it was the second lowest in 12 months, the lowest being in July, and within the Reserve Bank of India’s target range of 2-6%.
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