India tightens wheat stock restrictions

India will lower the limit on the amount of wheat stocks traders and millers can hold, but it has no immediate plans to remove import duties on the grain, a senior government official said, pointing to ample local supplies. Reuters reports this.

Traders, wholesalers and large retailers will be allowed to hold only 2,000 tonnes of wheat against 3,000 tonnes allowed earlier, said Sanjeev Chopra, the most senior government official at the Ministry of Consumer Affairs, Food and Public Distribution.

India will also release more wheat shares to the open market if required to curb prices in the upcoming festive season, he said.

“There is adequate availability of wheat, rice and sugar in the country, but some unscrupulous elements are trying to take advantage of supply rumors,” Chopra said.

After falling production, India banned wheat exports last year, followed by a ban on white rice, a non-basmati variety, this year. New Delhi has restricted sugar exports this year and is unlikely to allow mills to ship the sweetener next season, starting in October.

Chopra said recent export curbs have helped India ensure adequate availability of key ingredients such as rice, wheat and sugar.

“Despite sufficient reserves, there is a feeling of artificial shortage in the country,” he said.

His comments will allay concerns about a potential supply crunch during a series of festivals in October and November.

“The government is fully prepared to meet the festival requirements for rice, wheat and sugar,” Chopra said.

According to him, in August the country's sugar reserves amounted to 8.5 million tons, which is a sufficient condition to meet the requirements for more than three and a half months.
“There were some concerns about the sugarcane crop due to inadequate rains in August, but September rains in Maharashtra and Karnataka helped the crop,” he said, referring to India's top cane-growing states.

India is the world's second largest producer of sugar, wheat and rice.

Edible oil prices have declined in the last few weeks, tracking price movements in overseas markets, but there is no proposal to increase import duty on it, he said.

Wheat prices remained near a seven-month high in trading, while sugar prices rose to a six-year high on Thursday.