Monsoon uncertainty: Centre imposes stock limits on wheat, after tur and urad

By Harikishan Sharma

IN A sign of nervousness about the progress of the monsoon ahead of Assembly polls in key states, the government has imposed stocking limits on wheat. It comes despite the Union Agriculture Ministry estimating a record production of the cereal grain this year. Earlier this month, the ministry had clamped stock limits on arhar/tur (pigeon pea) and urad (black gram).

The Department of Food and Public Distribution Monday fixed the maximum quantity of wheat that traders and wholesalers can hold at any given time at 3,000 tonnes. The same has been fixed at 10 tonnes for retailers and 3,000 tonnes for big chain retailers at all their depots.

Millers and processors have been allowed to stock up to 75 per cent of their installed annual capacity or the quantity equivalent to the monthly installed capacity multiplied by the remaining months of 2023-24, whichever is lower.

The stock limits will come into force “with immediate effect”. In the event of the trade/ processors holding more than the notified quantities, “they shall bring the same to the prescribed stock limits within 30 days of issue of this notification”.

What is interesting is that the Agriculture Ministry has estimated the 2022-23 wheat crop, harvested and marketed this April-June, at an all-time high of 112.74 million tonnes (mt). This is as against 107.74 mt of 2021-22, 109.59 mt of 2020-21 and 107.86 mt of 2019-20. Moreover, government agencies have procured 26.19 mt of wheat in the current rabi marketing season. Although lower than the record 43.34 mt of 2021, it is more than a 15-year-low of 18.79 mt purchased last year.

The imposition of the stocking limit is being seen as a pre-emptive move in the light of a not-too-great monsoon so far. The country as a whole has received a cumulative area-weighted rainfall of just 20.6 millimetres during June 1-12, 52.4 per cent below the normal long-period average of 45 mm for this period.

While the southwest monsoon season extended from June to September, there is not much optimism over the rainfall prospects in the coming months because of El Niño, whose arrival has already been declared by global weather agencies such as the US National Oceanic and Atmospheric Administration.

The National Statistical Office, on Monday, released data showing consumer food price inflation for May at only 2.91 per cent year-on-year. However, retail cereal inflation was higher at 12.65 per cent. And the Modi government does not want to take any chances ahead of key state elections in November, followed by the big national one in April-May 2024.

This article has been republished from The Indian Express

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