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India Imposes Wheat Stock Limits

Date: 27/06/2024 – Wheat

The Indian government has imposed stock limits on wheat holdings for traders, in a move to stabilize wheat prices and prevent hoarding. This decision aims to ensure adequate supply in the market and curb inflationary pressures on this essential commodity.

It may also abolish or reduce import tax on the grain if pressure continue, with wheat in India, the world’s second-largest producer, rising in recent weeks on the back of supply concerns. “Imposing stock limits was just one option. We have many other tools at our disposal to ensure that wheat prices do not rise abnormally,” food secretary Sanjeev Chopra told reporters.

Stock Limits

The stock limits were imposed starting June 12, 2023, and will remain effective until March 31, 2025, with the stock limits as follows:

  • Retailers: 10 metric tons per outlet.
  • Wholesalers: 3,000 metric tons.
  • Big Chain Retailers: 10 metric tons per outlet and 3,000 metric tons at all depots.
  • Processors: 75% of their monthly installed capacity multiplied by the remaining months until March 2025.

Market Impact

Price Stabilization

To further enhance supply, the government plans to offload 1.5 million metric tons (MMT) of wheat from the central pool to bulk consumers and traders under the Open Market Sale Scheme (OMSS).

Supply Assurance

These measures are intended to stabilize wheat prices, which have seen a significant uptick due to speculation and hoarding. The government has noted an 8% increase in wheat prices at the mandi (marketplace) level over the past month.

Additional Measures

Monitoring & Compliance

Entities holding wheat stocks must register on the wheat stock limit portal and update their stock positions weekly. Non-compliance will result in punitive actions under the Essential Commodities Act.

Procurement & Reserves Building

The government’s wheat procurement for the 2024 season is estimated at 26.6 million metric tons, slightly higher than the previous year.


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