India: Centre cuts wheat stock limits until March to curb hoarding, stabilize prices

As part of its ongoing efforts to regulate supply and curb price volatility, the government on Thursday revised wheat stock limits for traders, retailers, and chain store retailers, tightening the cap until 31 March. The move comes in response to concerns over hoarding and speculative trading despite ample availability of wheat following a good Rabi 2024 procurement of 1,132 lakh metric tonnes (LMT).

According to an official statement from the Ministry of Consumer Affairs, Food & Public Distribution, the Centre has significantly revised the stock limits on wheat for different entities. Traders and wholesalers, previously allowed to stock up to 1,000 tonnes, will now be restricted to 250 tonnes.

Retailers’ stock limit has been reduced to 4 tonnes per outlet from 5 tonnes. Similarly, big chain retailers, previously allowed to stock 5 tonnes per outlet, can now stock only 4 tonnes of wheat, with an overall cap based on the number of their outlets.

Any violation of the prescribed limits or failure to register will invite punitive action under the Essential Commodities Act 1955. Entities holding stocks beyond the revised cap must bring them within the limit within 15 days of the notification’s issuance.

The stock restrictions, first imposed through an order in June 2024 and revised in September and December last year, aim to ensure that wheat remains accessible and prices remain stable for consumers.

As per the Consumer Affairs Ministry, the average retail price of wheat was ₹32.82/kg on Thursday, compared to ₹30.88/kg a year ago, reflecting an increase of 6.28%. Similarly, the average retail price of wheat atta was ₹38.06/kg, up from ₹36.12/kg a year ago, marking a 5.37% rise.

As per Agriculture Ministry data, wheat sowing this season has increased to 32 million hectares (Mha), compared to 31.56 Mha last year, and is higher than the average sown area over the past five years.

Excessive heat before harvesting and unseasonal rains in March have adversely impacted wheat harvests in the last three years.

According to the Agriculture Ministry data, wheat output in the 2023-24 crop year (July-June) is estimated at 113.29 million tonnes (MT). The crop estimate for the 2024-25 crop year has not yet been released but is expected soon.

Inflation in wheat stood at 8.8% in January 2025 on a year-on-year basis. It has remained in single digits since August 2023.