Stock limits on sugar traders extended for another 6 months

New Delhi: Government on Thursday decided to extend stock limits on sugar traders by another six months till April 2017 in order to check sweetener prices, which at present are ruling around Rs 40 per kg.

A decision in this regard was taken in the Cabinet meeting chaired by Prime Minister Narendra Modi.

"The Union Cabinet has given its approval for extending the validity of the existing Central Order in respect of Sugar for a further period of six months from October 29, 2016 to April 28, 2017," an official statement said.

The main objective of the decision is to enable states to issue control order with the prior concurrence of central government, for fixing stock limits/licensing requirements in respect of sugar, whenever need is felt by them, it said.

"This is expected to help in the efforts being taken to improve the availability of these commodities to general public at reasonable rates, and control the tendencies of hoarding and profiteering," it noted.

The Centre will notify the current decision and will communicate to all the States/UTs.

Early this year, the government had reimposed stock limits on sugar traders after a gap of five years due to rise in sugar prices following drop in domestic production.

The stock limits on sugar traders were imposed for six months ending October. Traders were allowed to hold sugar stock of up to 10,000 quintals in Kolkata and 5,000 quintals in other parts of the country.

As per the stock limit order, a dealer was allowed to stock up to 10,000 quintals of sugar in Kolkata, which is the largest trading centre for the commodity in the country. However, the limit was kept 5,000 quintals for rest of the country.

It had also prescribed that a trader has to sell his stock within 30 days from the date of receiving the sugar.

Retail sugar prices are ruling around Rs 40 per kg in most places due to likely fall in domestic production due to back-to-back drought.

Sugar production of India is likely to decline to 23.2 million tonnes in 2016-17 marketing year (October-September) from 25 million tonnes in the previous year.