 "food prices")
With food inflation remaining elevated amid concern over kharif and rabi harvests, the Central government in the past 48 hours initiated measures to tame prices and ensure key items are available.
This starts with stopping the production of ethanol from sugarcane juice, followed by a ban on exporting onion till March 2024.
The decisions triggered protests in the politically important state of Maharashtra with farmers taking to the streets to protest the ban on onion export.
Maharashtra Deputy Chief Minister Ajit Pawar said in the Assembly the Centre’s ethanol decision was “sudden” and many sugar mills in Maharashtra had invested heavily in setting up ethanol plants.
Farmers blocked the Mumbai-Agra highway at three places in Nashik and stopped auctions in wholesale markets on Friday. Both onion and sugarcane are grown in a major way in Maharashtra, where the BJP is a prominent coalition partner in the state government. The steps to control inflation are also being viewed as attempts to control prices ahead of Lok Sabha elections next year.
Retail prices of onion have climbed from minus 15.92 per cent in April this year to 42.08 per cent in October while those of wheat and wheat products (non-PDS) have dropped from 15.39 per cent in April to 7.61 per cent in October.
Earlier, also late on Thursday, the government allowed duty-free imports of yellow peas till March 31. On Friday, Union Food Secretary Sanjeev Chopra told reporters the government had tightened stockholding norms on wheat for wholesalers, retailers, big chain retailers, and processors with immediate effect to curb hoarding and check price rise.
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He said the stock limit had been reduced to 1,000 tonnes from the existing 2,000 tonnes for traders/wholesalers, while for retailers it had been brought down to 5 tonnes instead of 10 tonnes.
For big-chain wheat retailers, it will also be 5 tonnes for each depot and 1,000 tonnes for all their depots. Processors can hold 70 per cent of the monthly installed capacity multiplied by the remaining months of 2023-24, Chopra said.
“This has been done to prevent artificial scarcity and curb hoarding. The revised stock limits will be applicable with immediate effect,” the secretary said.
On June 12, the food ministry had first imposed stockholding limits for different kinds of traders till March 2024. Chopra said the ministry was planning to offload an extra 2.5 million tonnes of wheat with Food Corporation of India to bulk consumers during January-March 2024 under the Open Market Sale Scheme.
So far, FCI has offloaded 4.46 million tonnes to processors through weekly e-auctions. For sale of wheat flour under the “Bharat Atta” brand at a subsidised rate, Chopra said the quantity had been increased from 250,000 tonnes to 400,000 tonnes till the end of January 2024.
India produces 28-30 million tonnes of onion a year and is among the world’s largest producers. The crop is usually planted three times in a year.
