Hoarding of essential items like wheat, barley, rice and oil etc during periods of shortages with the intention of selling them at higher rates to people who are compelled to purchase them is Harām and a Greater sin. It is promised Hell-fire.
The Messenger of Allah (S) says that he heard from Jibrīl (a.s.) that there was a valley in hell and fierce fire blazed in it. When he asked the caretaker of Hell about those who would be put there he said that it was for Three groups: The hoarders, the drunkards and those who earned commission on unlawful deals.1
He (S) also said that only the sinful people resort to hoarding goods. Also that if a person buys food items and hoards them for forty days so that prices rise in the Muslim markets, he has committed such a serious sin that if he were to later sell all the hoarded material and donate all the income it will not expiate for his sin.2
Some traditions have called the hoarders accursed. The traditions also say that one night divine retribution descended on Bani Israel. By next morning four groups of people had died: The drummers, the singers, the hoarders and those who ate pork.3
The Prophet (S) also says that one who hoards some goods for forty days will not be able to perceive the fragrance of Paradise, while the fragrance of Paradise reaches upto a distance of five hundred year’s journey. When even the fragrance of Paradise is prohibited to him there is no question of his entering Heaven.4
He (S) also said that one who hoards food items for forty days in anticipation of rise in their prices has distanced himself from Allah and Allah tires of him and breaks off connection with him.5
Hoarding is not Harām under Three conditions. A person can hoard essential commodities when people do not need those items or if the need arises it is possible for people to fulfil their needs. Also when hoarding is done to fulfill the future needs of your family and not with the intention of selling it at a higher price. Other than this it is Harām and a Greater sin. It is the duty of the Hakim al-Shara to convince him to sell at a reasonable rate. But if he does not agree the Hakim al-Shara has the authority to purchase it at moderate rates and sell the food grains to the needy people.