Coronavirus: Govt monitors supplies to ease panic buying crunch
Coronavirus in India: Albinder Dhindsa, co-founder and CEO of online grocery delivery service Grofers, said they continue to observe panic buying among consumers across states.Updated: Mar 21, 2020 07:08 IST
Consumers around the country are panic buying household items in stores as well as online, retailers said, prompting the Union government to set up inter-ministerial teams to monitor supplies and talk to manufacturers, apart from capping prices of all kinds of alcohol-based sanitisers, and easing public ration distribution norms.
Shelves have been emptied in neighbourhood shops in cities like Delhi, and home deliveries by online sellers, such as Amazon, have either been disrupted or delayed.
“In the short term, this is having an impact on how we serve our customers. In particular, you will notice we are currently out of stock on some popular brands and items, especially in household staples,” Amazon India said in a public notice.
Albinder Dhindsa, co-founder and CEO of online grocery delivery service Grofers, said they continue to observe panic buying among consumers across states. “We have seen a rise in both the number of orders at 65% as well as order value at 20%. Cities like Kolkata saw a growth of 140%...”
He said compared to last month, Grofers witnessed a 93% increase in the sale of disinfectants, 90% in personal hygiene products and 74% in groceries and staples across India.
To curtail panic buying, the company has put a cap on the number of items a customer can buy. “We are taking a hard approach to hoarding of essential commodities. To ensure supplies to genuine customers, we are proactively blocking people who are trying to game the system to acquire items,” Dhindsa said.
The consumer affairs ministry has allowed the Food Corporation of India, the Centre’s main grain-stocking arm, to sell food stocks to private markets under Open Market Sale Scheme (OMSS).
The demand surge has now broadened from mainly urban centres to semi-urban regions too, according to Rohit Aggarwal of Comtrade, a commodities trading firm.
“There is neither any shortage of foodgrains nor are we worried about its availability. Besides, we are resorting to sale in open markets through OMSS, whereby rice is being sold at ₹22.50 a kilo,” food and consumer affairs minister Ram Vilas Paswan said.
Easing norms under the public distribution system or PDS, the Union government has decided that state governments could withdraw up to six months’ of foodgrains in advance, according to their usual monthly allocations.
Punjab has been the first to demand a full six months’ supplies, while Odisha has ordered two months’ quota in advance. “If more states demand, we can give,” an official said on condition of anonymity.
The government is also talking to major industries and FMCG firms to ramp up supplies, the official said.
According to the ministry’s food inventory data, till April 1, about 13.5 million tonne of rice and 7.4 lakh tonne of wheat are needed for public distribution under the National Food Security Act, which covers 67% of the poorest Indians. “This works out to a total of, say, 21 million tonne foodgrains which are required, whereas we have total stocks of approximately 64.6 million tonne. This means we have a surplus of nearly 43.5 million tonne,” the official said.
The consumer affairs ministry also capped prices of all raw materials used for making hand sanitisers, such as alcohol, under the Essential Commodities Act. “Prices of the alcohol used in manufacturing the hand sanitisers have been exorbitantly increased by producers. It has been notified that raw materials used in essential commodities are also essential commodities under the Act. States can now ask manufacturers of these alcohols not to increase prices of their products without the concurrence of the central government,” a consumer affairs ministry spokesperson said.
The country also expects a robust rabi or winter-sown harvest, which is underway and should meet demand. Since all production data points to a robust harvest of several commodities, there should be no shortage and anti-hoarding measures will be put in place if the situation warrants, an official from the inter-ministerial team said, requesting anonymity.
According to data from the food ministry’s second advance estimates of foodgrain production, which covers the rabi or winter-sown 2020 season, the wheat output is expected to be an all-time high of 106.21 million tonnes.
Gram output is likely to be 11.22 million tonne, up 12.8% from last year. Production of mustard, the largest winter-grown oilseed crop, is projected to fall only marginally to 9.11 million tonnes, 1.54% less than last year. Total winter foodgrains, which also include pulses and coarse cereals, are projected to be 149.60 million tonne, up 4.10% from last year.
The consumer affairs ministry is a key part of efforts to track supplies and is reporting regularly to the Cabinet Secretariat. The second official quoted above said the government was open to using all options, including anti-hoarding measures and bringing any items under the Essential Commodities Act if deemed necessary.
“Since people are panic buying, stores may be running out of stocks, but our reports suggest they will be replenished quickly,” he said.
According to RS Sodhi, managing director of Amul, milk supplies are stable and there were no demand-supply mismatch reports.
Amazon India said it was working “round the clock with our selling partners to ensure availability on all products, and bring on the additional capacity to deliver all orders”.
Other online retailers such as Bigbasket, too, have been overwhelmed by panic buying. According to Sheshu Kumar Tirumala, who heads buying and merchandising at Bigbasket, customers using its app had jumped up to 70% from two weeks ago, clogging deliveries.