The Centre on Monday said traders and wholesalers could hold only a limited quantity of wheat, finally attempting to check rising food inflation in the country.
This decision has been informed by attempts to increase availabilities and reduce soaring high prices of wheat, which the authorities attribute to stockpiling and not scarcity. Annual food inflation has been persistently at 8% for the past eight months, biting the consumer and keeping the overall retail inflation above the benchmark set by the Central Bank at 4%.
The floor price for wheat stocks came with similar restrictions put in the week before restricting two major pulses, that is tur, which is referred to as pigeon pea, and chana, also known as chickpea, and has already started lowering the prices.
Interacting with the media on the occasion, Food Secretary Sanjeev Chopra dismissed the reports, stating that the government has a variety of instruments, including import, to regulate wheat prices.
He, however, categorically moved down any sentiments of a wheat shortage term and warned that there was an intention by what he referred to as vested players to drag the available stocks’ impression downwards.
According to the new order, traders and wholesalers must reduce their stocks to the least 3000 metric tons within 30 days. The limit of stock retailers, those who buy from manufacturers and sell the commodities to end users, can store 10 tonnes per outlet. In contrast, food processors can store 70% of the installed capacity monthly.
The government’s grain agency has procured 26 percent of its targeted state-command grain from the countryside to feed city dwellers. Six million tonnes of the winter wheat crop is below the estimates due to the difficulties authorities face in managing food inflation.
