Govt announces more stringent measures to tame food prices | Latest News India - Hindustan Times

Govt announces more stringent measures to tame food prices

Sep 14, 2023 06:34 PM IST

Union food secretary Sanjeev Chopra said there was sufficient availability of key commodities but there were attempts to create artificial scarcity

NEW DELHI: The Union government on Thursday imposed more stringent measures to control cereal inflation, prescribing new limits for quantities of wheat that can be stockpiled by traders and tighter monitoring of rice stocks in the run-up to a festive season beginning next month.

Workers fill sacks with wheat at the market yard of the Agriculture Product Marketing Committee on the outskirts of Ahmedabad (REUTERS FILE PHOTO)
Workers fill sacks with wheat at the market yard of the Agriculture Product Marketing Committee on the outskirts of Ahmedabad (REUTERS FILE PHOTO)

Union food secretary Sanjeev Chopra said the availability of key commodities, including rice, wheat and sugar, was sufficient and even surplus in the case of wheat but the government had found that attempts were being made to “create artificial scarcity on the pretext of a poor monsoon”.

The food secretary added the government expects a bumper rice crop despite a patchy monsoon because of robust acreage as reported by the agriculture ministry.

The government has 25.5 million tonnes of wheat against a minimum stock requirement of 20.2 million tonnes, according to food ministry data.

“We have 8.7 million tonnes of wheat over and above the buffer requirement and 5.7 million tonnes were being offloaded in the markets,” he said.

The official said sugar stocks stood at 8.5 million tonnes, which is sufficient for the next three-and-a-half months. Crushing of cane from summer harvests will begin next month.

On industry estimates of a possible decline in sugar output this year, which could fan prices, the official said: “There was some concern in August because of rainfall deficiency. But good rains in September, particularly in the critical states of Karnataka and Maharashtra, have revived cane crops. So, we don’t subscribe to the view that there will be any big dip in production.”

Effective Thursday, the government has set 2,000 tonnes as the quantity of wheat that traders, wholesalers and supermarkets can store, a measure known as stock limits imposed primarily to boost supplies in retail markets. Millers can stock 75% of their total installed capacity. In June, the government prescribed a limit of 3,000 tonnes.

The new curbs on wheat follow a 4% rise in spot prices of wheat on the National Commodity and Derivatives Exchange Limited despite a ban on exports that may reflect in retail prices. “We don’t want traders and wholesalers to hold more stocks than they need and create any artificial scarcity,” Chopra said.

Consumer inflation in August rose at a slower pace at 6.83% from a year ago than in the previous month, but it continued to be above the Reserve Bank of India’s target of 4% (+/-2), according to official data. Despite a raft of measures to cool grain inflation, cereal prices remained elevated at 11.6% in August, in comparison to 13% in July.

“We are concerned that rice inflation has been 10%. Rice is on our radar. We are going in for intensive enforcement of stock limits in cooperation with states. Hoarding will be dealt with severely and we can turn more aggressive to control prices,” the official said.

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