Indian govt tightens wheat stock holding limits to curb rising prices

These restrictions limit traders, including aggregators, wholesalers, and large retailers, to holding 1,000 MT of wheat, down from 2,000 tonnes previously, while retailers are limited to 5 MT per outlet.

Big chain retailers can hold 5 MT per outlet, with a total cap based on their number of outlets.

Processors' stock limit is revised to 50% of their monthly installed capacity until April 2025.

All entities stocking wheat must register on the wheat stock limit portal https://evegoils.nic.in/wsp/login and update their stock levels every Friday. Failure to register or comply with stock limits will lead to penalties under the Essential Commodities Act, 1955.

Entities exceeding the prescribed limits must reduce their stocks within 15 days of the notification. The Department of Food and Public Distribution is closely monitoring wheat stock levels to stabilize prices and ensure adequate supply nationwide.

The Centre’s order follows the rabi 2024 season's wheat production of 113.2 million tonnes, with the government asserting “ample availability of wheat in the country.”

Such restrictions are typically implemented to address supply issues and stabilize prices during periods of scarcity or inflation.

India's inflation remains a concern, with October 2024 retail inflation reaching 6.21%, driven by food inflation at 10.47%.

Despite a slowdown in economic growth, the Reserve Bank of India recently held its benchmark interest rate steady at 6.5%, citing ongoing inflation risks.

India, the world's second-largest wheat producer, had previously banned wheat exports following weather-induced yield declines in 2022 and 2023.

This export ban was reversed earlier this year.