The Indian government has imposed a cap on the quantity of wheat stocks that traders and retailers can hold in the country as part of its efforts to rein in surging prices of the grain. The stock limit will be valid till March 31, 2024, Sanjeev Chopra, Secretary, Food and Public Distribution, told reporters on Monday evening.

The move comes after wheat prices in mandis rose by almost 8 per cent in the past month, creating artificial scarcity by some “unscrupulous elements” who are holding the stock. The government fears that the wholesale and retail prices will also go up as modal mandi prices are showing upswing.

According to the order, the stock limit on wheat for processors has been fixed at 75 per cent of annual installed capacity or quantity equivalent to monthly installed capacity multiplied by the remaining months of 2023-24, whichever is less. For traders/wholesalers, the limit is 3,000 tonnes; for retailers, 10 tonnes; for each outlet of big chain retailer, 10 tonnes; and for all their depots, 3,000 tonnes.

The stock holders have been directed to declare the stock position and update them regularly on the portal of the Department of Food and Public Distribution. In case, the stocks held by them are higher than the prescribed limit, then they have to bring the same to the prescribed stock limits within 30 days of the issue of this notification.

To improve domestic availability and check prices, the government has also decided to offload 15 lakh tonnes of wheat to bulk consumers and traders from the central pool from month-end under the Open Market Sale Scheme (OMSS). Apart from wheat, rice will be offloaded to bulk buyers under the OMSS and the quantity will be decided in due course of time.

The government made it clear that it has no plans to tweak the wheat import policy as the country has ample stock. It further said the ban on wheat export would continue and further export of sugar will be not permitted as of now.

The stock limit on wheat has been imposed for the first time in 15 years. Last time, the stock limit was imposed in 2008. The government hopes that this measure will help control prices and ensure adequate supply of wheat in the market.

For the 2023/24 season, it is anticipated that the country's wheat production will reach 109 million metric tons. Imports are projected to be around 20-25 thousand metric tons, while wheat exports are estimated to reach 500 thousand metric tons. The consumption forecast for wheat stands at approximately 100 million metric tons.