The government has introduced stockpile limits for wheat traders and may reduce or eliminate import taxes on wheat to stabilize prices, a senior government official announced on Monday. This move comes as wheat prices in India, the world’s second-largest wheat producer, have surged due to supply concerns.
“Setting stock limits was just one measure. We have several other methods to ensure that wheat prices do not spike unreasonably,” stated Sanjeev Chopra, Secretary of the Department of Food and Public Distribution. Sanjeev Chopra also emphasized that there is no shortage of wheat despite recent price increases, noting that wheat prices have risen by 5.5-6% over the past year. In August, consumer inflation for cereals was notably high at 8.7% compared to the same period last year.
As of April, wheat stocks in state warehouses decreased to 7.5 million metric tons, the lowest level in 16 years. The government responded by selling a record 10 million tons to flour millers and biscuit makers to curb rising prices. At the beginning of April 2023, government warehouses held 8.2 million metric tons of wheat.
To ensure compliance with the new stock limits, retailers and others are required to submit weekly price reports through the portal managed by the Department of Food and Public Distribution (DFPD). They have been given a 30-day period to adhere to the updated limits, which are similar to those established last year. The limits specify 3,000 tonnes for wholesalers, 10 tonnes for individual retailers, and 10 tonnes per outlet, with a maximum of 3,000 tonnes for large chains.
India had imposed a ban on wheat exports in 2022, and according to Sanjeev Chopra, there are no plans to lift this restriction. Additionally, there are no proposals to ease export restrictions on sugar and rice. India remains the world’s largest rice exporter and the second-largest producer of sugar.
