Wholesalers and big chain retailers of food have been exempted from the current stock limit order with immediate effect, as per the order issued by the Ministry of Consumer Affairs, Food & Public Distribution Government. This will allow them to keep various varieties and brands of edible oils, which they were unable to keep due to a stock control order that was in force.
Kumar Rajagopalan, CEO, Retailers Association of India (RAI), said, “The stock limit for wholesalers and chain store retailers did not account for large chain stores that have come up in the country over these years.” This is a welcome move by the government as it recognizes that the stocking limits have to be seen separately for chain store retailers and hypermarkets.
According to RAI, wholesalers and chain store retailers were facing problems in their daily operations as the limits specified were insufficient to meet demand, and the daily replenishment of shelf stocks within city limits was challenging. And this move will not only smooth supply chain issues but also increase the market’s size as wholesalers and chain store retailers will now be able to add more varieties and brands of edible oils.
The Government of India had imposed stock limits on oil and oilseeds to cool down the domestic prices of edible oils. The high volatility of prices was leading to hoarding, profiteering, and black marketing. The stock limits were to be in force until December 31, 2022. However, the limits were based on those imposed in 2008, a time when big chain food retailers either did not exist or played a minor role compared to today. and therefore, were not relevant in today’s scenario.
The department decided to review the stock limit given the challenges food retailers were facing concerning stocking and restocking and the decline in edible oil prices in international as well as domestic markets.