With sugar prices still ruling around Rs. 44 a kg in the retail market, the Centre has extended till September the stock limit order to prevent hoarding of the commodity for speculation. States are empowered to take action against hoarders and black marketeers under this order.

The validity of the anti-hoarding order which was extended last July till January 31, has been further extended till September, official sources official told The Hindu.

As per the notification issued, under Section 3 of the Essential Commodities Act, 1955, (10 of 1955), read with clause 5 of the Sugar Control Order, 1966, a sugar dealer has to sell his stocks within 30 days from the date he receives the consignment. While a recognised (registered) dealer can stock only up to 2,000 quintals, each dealer in Kolkata and its adjoining areas can keep a maximum of 10,000 quintals at any point of time as West Bengal caters to the entire north-eastern region. However, for obvious reasons, the order exempts sugar stocks held on government account or for the Public Distribution System or held by the Food Corporation of India.

According to sources, of all the States that had notified the sugar control order, only Madhya Pradesh, Rajasthan, Maharashtra, Andhra Pradesh and Punjab had taken actions to de-hoard illegally held sugar stocks. There has been “some action” in Tamil Nadu as well but the other States had not so far reported any action despite soaring sugar prices. About 20 sugar-producing States have notified the stock limit order.

They expect some action in other States in view of the coming Chief Ministers’ Conference here on February 6.

Although sugar prices in the retail market have dipped slightly, it is expected that they will rise again on the high demand during the coming ‘holi’ festival. The crisis remains as sugar industry does not find it feasible to import currently as global sugar prices are high.

While 4.5 million tonnes has been contracted for import so far, sources said another 1.6 million tonnes would have to be imported to bridge the gap between demand and supply. Sugar production is expected to be 16 million tonnes in 2009-10 season as against domestic demand of 23.5 million tonnes.

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