The decision comes in view of the hike in wheat prices on the National Commodity & Derivatives Exchange Limited.
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In a bid to check the rising wheat prices, the government has stepped in with the decision to reduce the stock limit on wheat to 2,000 tonnes for traders, wholesalers, and big-chain retailers. Previously it was 3,000 tonnes. Food and Public Distribution Secretary Sanjeev Chopra said the stocks need to be reduced, in order to meet the revised limit by October 12. During an interaction with the media on September 14, Sanjeev Chopra said that the decision had been taken due to the hike in wheat prices on the National Commodity & Derivatives Exchange Limited, despite a sufficient stock of wheat being available. “Wheat prices on the NCDEX in the past month have gone up by about 4 percent. And we are finding that although there is adequate availability in the country of wheat, still I think there are some elements that are trying to create artificial scarcity,” he said. He added, “Although the prices at the retail level are still holding good, we are anticipating that with this uptick in NCDEX prices, there may be a reflection of these prices in the retail market.”
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Notably, the government’s decision to reduce the limit comes after a limit of 3,000 tonnes was announced in June. Sanjeev Chopra informed that the limit was imposed in view of the next harvest coming from April 2024. Now, the harvest is three months closer and therefore, it is in the “natural scheme of things” to reduce the limit. This is necessary to avoid offloading any excess stock and to ensure that there is no “hoarding for the next financial year”.
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For those unversed, last month saw the wheat prices on the NCDEX increasing by 4% to Rs 2,550 per quintal. As a result, the average prices of the grain shot up 1.3% on a month and 10.4% on a yearly basis. Sanjeev Chopra, in his interaction, also informed that the country currently has 25.5 million tonnes of wheat against a requirement of 20.2 million tonnes. Moreover, a surplus of 3 million tonnes of wheat is also available above the buffer stocks for market intervention. On the other hand, another 5.7 million tonnes was deployed for market intervention.
