Govt tightens stock controls for wheat to boost supplies holding limits
By Sandip Das
To improve supplies of wheat and prevent its hoarding, the government on Thursday halved the stock holding limits of the grain for traders, wholesalers, big retailers and processors, while extending the controls to March 31, 2024.
In June last year the stock holding limits for wheat were imposed till end of current fiscal.
According to a food ministry statement, the stock holding limits have been revised downwards to 500 tonne from 1,000 tonne for traders and wholesalers. For big chain retailers, the wheat stock limit has been reduced to 500 tonne tonne at all their depots from 1,000 tonne.
Under the revised norm, processors can now hold 60% of their monthly installed capacities multiplied by remaining months till April, 2024 from the earlier norm of 70% of monthly installed capacities. The ministry also asked wheat traders to update their stock-holding on a weekly basis with it.
“Officials of central and state governments will be closely monitoring enforcement of these stock limits to ensure that no artificial scarcity of wheat is created in the country,” according to an official note. Officials said that through reducing stock limits for wholesalers which would improve supplies and offloading of stocks of the Food Corporation of India (FCI) under open market sale (OMSS), the possibility of rise in the prices till end of March is curbed.
Inflation in wheat declined further to 4.69% in December from 6.36% in November on year because of improvement in supplies due to open market sale being carried out by the FCI. Until Wednesday, the government has sold 8 million tonne (MT) of wheat through weekly electronic-auction to the bulk buyers since June, 2023. The aim is to sell 10 MT of wheat by March through weekly e-auctions as FCI has allocated 0.5 MT of wheat for weekly e-auction under OMSS.
Under OMSS, the corporation had sold 3.3 MT of wheat in the open market in 2022-23. The highest quantity of wheat sold was 8.1 MT in 2018-19 for bulk buyers such as flour millers. Wheat stock with FCI on Wednesday was 12.79 MT, lowest since 2016 against the buffer of 7.46 MT for April 1. Following the offloading of 10 MT of wheat in the market, the government stock is likely to fall close to buffer by April 1.
As per earlier policy, the corporation had been selling surplus wheat to bulk buyers like flour millers only during the lean season (January-March). New crops for the current rabi marketing season (2024-25) starts arrivning in the market across key producing states – Punjab, Haryana, Uttar Pradesh, Rajasthan and Madhya Pradesh starting middle of March.
Procurement of wheat for the 2024-25 marketing season (April-June) would commence from April 1.
The government has set a higher wheat production target of a record 114 MT for the 2023-24 crop year (July-June) against an estimated output of 110.5 MT in 2022-23.
This article has been republished from The Financial Express.