Centre imposes caps on wheat stock held by traders, import option open
- In Reports
- 12:19 PM, Jun 25, 2024
- Myind Staff
On Monday, the government imposed stock limits on wheat for wholesalers, retailers, and processors, effective from 24 June, to crack down on hoarders and speculators and prevent the food security situation from worsening.
The permitted stockholding limit was set at 3,000 tonnes for wholesalers, 10 tonnes for retailers, 10 tonnes per outlet and 3,000 tonnes across all depots for large chain retailers, and 70% of the monthly installed capacity multiplied by the remaining months of the current financial year for 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 stated that the stock limit has been imposed in response to recent media reports indicating that the prices of essential commodities, including wheat, are rising.
Asked if the government could consider importing wheat, Chopra said, “All options are open and import is one of the options.” He, however, added there was no shortage of wheat in the country. “Wheat production is 4-5 million tonnes higher than the previous year," he said.
Although consumer inflation eased to a 12-month low of 4.75% in May compared to the previous year, food prices remained high at 8.69%, driven by cereals and pulses, according to the latest official data. Wheat prices increased by nearly 6% year-on-year.
“I would like to dispel the notion that there is a wheat shortage. There is no shortage. Vested interests are creating an impression that stocks are low. Traders are holding back on stocks,” Chopra said.
The limits on wheat stocks follow similar caps imposed last week on two varieties of pulses: tur (pigeon pea) and chana (chickpea). The stockholding limit on pulses has resulted in an immediate fall in prices by ₹50-200 a quintal (100 kg) in the case of pigeon pea and ₹100-300 a quintal in the case kabuli chana, a chickpea variety, consumer affairs secretary Nidhi Khare said.
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 realisation 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.
India currently imposes an effective duty (including cess) of 44% on wheat imports. If the government decides to reduce or eliminate this duty, it would enable India to import wheat for the first time in six years.
The Food Corporation of India, the main grain-handling agency of the Centre, has procured 26.6 million tonnes of winter wheat as of June 18. This falls short of the procurement target of 30-31 million tonnes. The government needs 18.4 million tonnes to meet the requirements of the public distribution system, which provides free grains to 800 million people, as well as other food-based welfare schemes.
Image source: Hindustan Times
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