India has lowered the stock limit of wheat that traders, processors, and retailers can hold to increase the grain’s availability and moderate prices, as stated by the food ministry on Thursday.
The restriction on wheat stocks held by traders and wholesalers has been reduced to 500 metric tonnes from the previous limit of 1,000 tonnes. Similarly, major chain retailers can now hold 500 metric tonnes of grain at their depot, down from the previous allowance of 1,000 tonnes. Processors, on the other hand, are now permitted to retain 60% of their monthly installed capacity multiplied by the remaining months until April 2024, a decrease from the earlier allowance of 70%.
After a severe heatwave diminished yields and drove prices up in May 2022, India, the world’s second-largest producer of wheat, imposed restrictions on cereal exports. Subsequently, in the following year, untimely rainfall further affected yields, prompting the government to maintain the ban.
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Despite export restrictions, prices remained high, prompting the food ministry to release wheat from its reserves even during the harvest season, a practice ongoing to this day. With general elections looming this year, the government is exerting considerable effort to curb inflation, particularly in food prices, to maintain public support.
Additionally, the government is distributing wheat in the retail market via Central Co-operative organizations such as NAFED, NCCF, and Kendriya Bhandar, branded as ‘Bharat Atta’, at a subsidized rate of INR 27.50 per kilogram through both physical and mobile outlets.
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“Areas where prices are reigning higher have been identified, and the agencies are undertaking targeted sales in these areas. 7.5 LMT of wheat has been allocated for converting into Atta and sale under ‘Bharat Atta’ brand,” the food ministry said in a statement.
This year, the government anticipates a bumper wheat harvest in at least three states – Punjab, Haryana, and Madhya Pradesh – with a projected record yield of 114 million tonnes.
