India Cuts Wheat Stock Limit by 75% to Control Prices by Amit Gupta, Kedia Advisory
The Indian government has slashed the wheat stock limit for traders from 1,000 tonnes to 250 tonnes, aiming to stabilize prices. Retailers and big chain outlets must now hold a maximum of 4 tonnes. The decision follows a sharp rise in wheat prices during the Food Corporation of India’s (FCI) recent e-auction, where the highest bid in Uttar Pradesh reached Rs.3,159 per quintal. Traders must offload excess stock within 15 days, with the new rule in effect until March 31, 2025. Entities must register on the wheat stock limit portal or face penalties under the Essential Commodities Act. The move aims to prevent hoarding and ensure food security.
Key Highlights
* Wheat stock limit for traders reduced from 1,000 tonnes to 250 tonnes.
* Retailers can now hold only 4 tonnes, down from 5 tonnes.
* Recent FCI e-auction saw wheat prices spike above Rs.3,000/quintal.
* Traders must offload excess stock within 15 days.
* Non-compliance may lead to penalties under the Essential Commodities Act.
India has tightened its wheat stock limits to curb rising prices. The government has reduced the stock limit for traders from 1,000 tonnes to just 250 tonnes, effective immediately. Retailers and big chain outlets can now hold only 4 tonnes, down from the previous 5 tonnes. This decision follows a sharp increase in wheat prices during the Food Corporation of India’s (FCI) recent e-auction.
The wheat price surge was evident in Uttar Pradesh, where the highest bid reached Rs.3,159 per quintal on February 19, compared to Rs.3,010 per quintal a week earlier. The lowest bid also jumped from Rs.2,520 to Rs.2,958 per quintal. Of the 4 lakh tonnes offered by the FCI, nearly all were sold, indicating strong demand despite price volatility.
To counter hoarding and speculative trading, the government has mandated that all wheat stocking entities register on the wheat stock limit portal and update their stock positions weekly. Violators face penalties under the Essential Commodities Act, 1955. The revised stock limits, first imposed in June 2024 and modified in December, are now stricter to ensure price stability and food security.
While the government assures adequate wheat availability, traders have 15 days to comply with the new stock limits, making the order effective only after March 5. Additionally, processors must maintain stocks only up to their monthly installed capacity until April 2025.
Finally
The wheat stock limit cut is a bold step to control inflation and prevent hoarding. With stricter regulations, the government aims to ensure steady supply and protect consumer interests.
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