Implementation of the Essential Commodities Act
The Indian Government has invoked the Essential Commodities Act to impose stock limits on wheat. This decision aims to stabilize domestic prices and prevent hoarding in the middle of speculation about a potential wheat shortage. The Food Ministry has directed all stakeholders to comply with the prescribed stock limits within the next 30 days. As outlined in The Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs (Amendment) Order, 2024.
Specific Stock Limits
Under the new regulations, traders or wholesalers can hold a maximum of 3,000 tonnes of wheat at any given time. Retailers, including large chains, are limited to 10 tonnes, while their depots can store up to 3,000 tonnes. For processors, the stock limit is set at 70% of the monthly installed capacity (MIC) multiplied by the remaining months of the fiscal year 2024-25. For instance, a flour miller with a 10,000-tonne MIC can store a maximum of 0.63 million tonnes during July-March and 0.56 million tonnes during August-March.
Continuation of Stock Declarations
Although the previous stock limit expired on March 31, 2024, the government continued to require stakeholders to declare their wheat stock positions. Stakeholders must submit their stock positions on a specific portal and update them every Friday. The Food Ministry stated that these declarations help manage overall food security and prevent hoarding and speculative activities.
Assurance of Sufficient Wheat Supply
Officials assured that there is no wheat shortage in the country. They noted that the current year’s wheat procurement reached 26.6 million tonnes, compared to 26.2 million tonnes last year, indicating an increase of 0.4 million tonnes. Additionally, the opening stock of wheat on April 1, 2024, was 7.5 million tonnes, slightly lower than the 8.2 million tonnes on April 1, 2023, showing a marginal gap of 0.3 million tonnes. Officials also mentioned that the resumption of the Open Market Sales Scheme (OMSS) for wheat from official reserves is being processed, indicating ongoing efforts to manage wheat supply and prices effectively.
The Indian Government’s decision to impose stock limits on wheat aims to stabilize domestic prices and prevent hoarding. Despite concerns about wheat shortages, officials ensure sufficient supply and ongoing procurement efforts. Export policies remain unchanged, focusing on maintaining domestic food security. Exporters should stay informed about these regulations and market conditions.