NEW DELHI, Dec 8 (Reuters) – India has lowered the inventory restrict of wheat that merchants and millers can maintain to extend the grain’s availability and average costs, the meals ministry’s most senior civil servant stated on Friday.

Indian authorities are nervous about volatility in meals costs forward of common elections due by May. Food costs account for nearly half of the retail inflation basket and the federal government is taking provide facet steps to tame meals inflation.

It has halved the restrict on wheat shares held by merchants and wholesalers to 1,000 tonnes whereas reducing stock limits for millers and retailers, stated Sanjeev Chopra, secretary on the Ministry of Consumer Affairs, Food and Public Distribution.

“The idea is there should not be any artificial scarcity… Whatever people are holding has to come out in the market so we have given them 30 days’ time to adapt to the new stock limits. Additional availability will have cooling effect on the prices.”

Chopra additionally stated the federal government is ready to launch a further 2.5 million metric tons of wheat out there if required to rein in costs.

The Reserve Bank of India held its charges for the fifth consecutive assembly on Friday, citing an unsure outlook for inflation on the again of meals value rises remaining above 6%.

After a drop in output, India has banned wheat and non-basmati rice exports. New Delhi capped sugar exports this 12 months and on Thursday directed sugar mills to not use cane juice or syrup to supply ethanol.

India’s retail inflation possible picked up in November as a result of larger meals costs after declining for 3 months, a Reuters poll discovered.

In September, India had tightened limits on wheat shares held by millers, merchants and retailers.

Leading commerce physique Indian Sugar Mills Association estimates India’s sugar productionwill fall 8% to 33.7 million tons within the 2023/24 advertising and marketing 12 months as decrease and premature rains in key producing states dent yields.

Our Standards: The Thomson Reuters Trust Principles.