The government on Wednesday ruled out imposing a stocking-holding limit for wheat anytime soon to curb a spike in the retail prices of the cereal. Sanjeev Chopra, secretary, department of food and public distribution, told FE that though there has been a marginal increase in retail and wholesale prices of wheat in recent weeks, the situation may not warrant imposition of stock holding limit.

“The government is regularly monitoring the price scenario of wheat and other essential commodities,” he said.

According to the department of consumer affairs’ price monitoring cell data, the modal retail price of wheat and flour (atta) on Wednesday rose to Rs28/kg and35/kg, respectively, from Rs 23/kg and Rs 28/kg three months ago.

Wheat output in the 2021-22 crop year (July-June), as per the agriculture ministry, has declined by around 3% on year to 106.8 million tonne (mt) because of heat waves during the flowering stage of the crop in March.

The annual domestic consumption of wheat is estimated around 84–85 mt. India has exported around 4.5 mt of wheat in the current fiscal, out of which around 2.1 mt was shipped prior to the imposition of ban on export in May 2022.

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Meanwhile, the Food Corporation of India’s wheat stock had declined to 21 mt on November 1, a six-year low, against the buffer requirement of 13.8 mt for the beginning of the next year.

The FCI’s procurement in the 2022-23 season fell by more than 56.6% to only 18.8 mt against 43.3 mt purchased from the farmers in the previous year. “Reduction in wheat procurement during the 2022-23 season was due to increase in market price and demand supply mismatch on account of geopolitical situation,” according to a food ministry note.

Sources said that the FCI is likely to offer 2-3 mt of wheat under the Open Market Sale Scheme to bulk buyers to curb rising prices of the grains in the current marketing year (2022-23), despite the stocks hovering around the buffer.

As per the latest assessment, the wheat stocks held with the FCI on April 1, 2023 would be around 11.3 mt against a buffer of 7.5 mt. “We are considering a proposal to offer wheat to bulk buyers from our stocks,” a official said.

In May 2022, India banned wheat exports for ensuring domestic supplies.

Inflation in cereals was 12.08% in October, up from 11.55% in September. Meanwhile, wheat retail inflation rose by 17.6% in October 2022.Meanwhile, rice inflation also increased by 10.2% in October, 2022 while prices rose by 9.2% in the previous month.

“There is negligible hike in retail prices of rice and prices are under control,” the food ministry’s note stated.

India’s rice production in the current kharif season for the 2022-23 crop year (July-June) is expected to decline by around 6% to 104.99 mt against 111.76 mt in 2021-22, according to the first advance estimate of foodgrain production released by the agriculture ministry recently.

The government also banned broken rice exports as well as put additional export duties of 20% on the certain varieties of non-basmati rice exports.