In anticipation of a robust harvest and heightened procurement, the government has decided against extending stock holding limits imposed on wheat beyond March 31.
However, the food ministry through a communication has asked traders, wholesalers, and big chain retailers to declare wheat stock on a weekly basis from April 1 on its portal. The decision according to the ministry is aimed at managing the overall food security and to prevent hoarding and unscrupulous speculations.
The holding limits were imposed in June last year; such a step was previously taken in 2008.
Last month to improve supplies of wheat and prevent its hoarding, the government had halved the earlier stock holding limits of the grain for traders, wholesalers, big retailers and processors. The wheat stock holding limits were revised downwards to 500 tonne from 1,000 tonne for traders and wholesalers.
For big chain retailers, the wheat stock limit had been reduced to 500 tonne tonne at all their depots from 1,000 tonne. Earlier the government has made it mandatory for the declaration of rice across categories.
Meanwhile, wheat stocks in the central pool fell to a 16 years low of 7.71 million tonne (MT) on Wednesday due to low procurement for the last two years and aggressive selling of grain in the open market by Food Corporation of India (FCI) this fiscal.
Sources told FE that the wheat stock is likely to be precariously close to the buffer of 7.46 MT for April 1. The last time wheat stocks were below the current levels was back in 2008. It had then dropped to 5.8 MT on April 1.
Retail inflation in wheat declined further to only 2% in February from 12% in July,2023 on year because of improvement in supplies due to a record offloading of 9.6 MT of wheat by FCI in the current fiscal.
Meanwhile, the government’s wheat procurement drive by agencies for 2024-25 rabi marketing season (April-June) has commenced early in Rajasthan and Madhya Pradesh. So far 0.16 MT of wheat has been purchased from farmers in these two states. While in the previous years, procurement of grain used to be marginal in March.
Although the wheat purchase usually commences from April 1 for the next marketing season, this year the government had urged states to MSPs operations of wheat early. Sources said that the agencies are likely to purchase around 31 MT of wheat from the farmers in the 2024-25 season.
Punjab is aiming to purchase 13 MT of wheat this season, while the government agencies in Madhya Pradesh and Rajasthan, which have announced a bonus of Rs 125/quintal over the minimum support price (MSP) of Rs 2275/quintal, are likely to purchase 8.2 MT and 2 MT of grain respectively.
FCI annually requires around 18 MT of wheat annually for distribution of grain under the free ration scheme – Pradhan Mantri Garib Kalyana Anna Yojana. “We need sufficient stock to carry out open market sale of grain to the bulk buyers next year,” an official said.
The government has set a higher wheat production target of a record 114 MT for the 2023-24 crop year (July-June) against an estimated output of 110.5 MT in 2022-23.