Imposition of storage limit on wheat has no significant impact on prices

30-May-2025 02:22 PM

New Delhi. Although the Central Government imposed a storage limit on wheat on 28 May to increase supply and availability in the domestic market and control rising prices—surprising many traders—data shows that the decision has not had any significant impact on wheat prices.

The maximum quantity of wheat permitted under the stock limit order is nearly in line with normal levels, and traders and flour millers usually do not maintain stock exceeding this approved limit.

Demand for wheat remains strong, contributing to price stability. On 27 May, a day before the imposition of the storage limit, the wheat price in Delhi was Rs 2755 per quintal.

It slightly rose to Rs 2760 on 28 May but fell back to Rs 2755 on 29 May, indicating that the market remains largely unaffected by the new order.

Traders and flour millers holding stocks below the limit may now see this as an opportunity to increase their purchases.

Flour millers and processors are allowed to hold stock equivalent to 70 percent of their milling or processing capacity. Wholesale traders can store up to 3000 tonnes of wheat, and they are permitted to trade amounts beyond this within 15 days.

While government procurement of wheat has nearly come to a halt, commercial buying continues. Wheat continues to arrive steadily in key mandis of major producing states, and the pace of trading remains normal.

The Central Government has estimated domestic wheat production to reach an all-time high of 1175.10 lakh tonnes, though this figure is considered by many to be unrealistic.

It will be important to monitor the wheat market in the coming days to evaluate the actual impact of the stock limit.