The Centre has decided not to extend stock limit on wheat after it expires on March 31 while continuing the mandatory weekly stock declaration from April 1. This will help it to keep a tab on who is buying how much. However, traders and stockists are apprehensive of re-imposition of stock limit at any time depending on the open market price.

The government has decided that traders, wholesalers and retailers including big chains and processors in all States and Union Territories shall continue to declare their stock position of wheat on the specific portal and update it on every Friday till further orders, the Food Ministry said in a statement on Friday.

The decision has been taken in order to manage the overall food security and to prevent hoarding and unscrupulous speculation, the Ministry said. The Department of Food and Public Distribution is maintaining a close watch over the stock position of wheat and rice to control prices and ensure easy availability in the country, it said.

Return of stock limit?

The order for stock declaration of rice by all categories of entities is already in-place since February this year whereas the same stipulation for wheat is in place from June 12, 2023, when the stock limit on wheat was also announced. Under stock limit, every entity is prescribed how much maximum quantity one has to keep at any point of time.

“As the stock declaration has been retained, it shows that stock limit can return anytime and what will happen to the stock if we buy for the entire year. Whenever limit is imposed, we get 30 days to conform to the norm which is impossible to meet. Farmers got good price last year as there was more demand and less availability. This year may not be the same as the crop forecast by all sections indicate a bumper production,” said a Delhi-based stockist.

UP fiat to traders

Recently, Uttar Pradesh government unofficially asked big traders, processors and stockists to stay away from market until its target of procuring six million tonnes (mt) is complete. After Madhya Pradesh and Rajasthan government announced ₹125/quintal bonus over and above the MSP of ₹2,275/quintal for wheat, most of the private sector players move towards UP to buy the grain. Punjab and Haryana are not preferred destinations due to high rate of mandi fees and other cess and commission.

According to Agmarknet portal, the total mandi arrivals recorded at 27.72 mt between March 1, 2023, and March 12, 2024. Besides, the Centre had purchased 26.2 mt for the official reserves and this leaves about 37 mt which could have been directly purchased by traders/processors. As the government’s production estimate was 110.55 mt for 2023-24, the market arrivals should have been 90.65 mt after assuming 18 per cent of output kept by farmers for their own use.