The Hindu : National : Stock-holding limit being planned for sugar

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Wednesday, Sep 13, 2006
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Stock-holding limit being planned for sugar

Gargi Parsai

Price still ruling high

NEW DELHI: The Centre is considering imposing a stock-holding limit for sugar as its price shows no sign of declining from Rs 21 a kg in the retail market. This is also a demand made by industry, which is accusing middlemen and traders of hoarding for speculation on the eve of the festival season.

Despite measures such as imports, the prices of wheat, rice, atta, gram, tur, vanaspati, groundnut and mustard oil also remain higher than what these were those six months ago, causing concern to the government. Officials admit that the prices of wheat, sugar and milk are contributing heavily to the inflation rate.

Sources said the Government is trying to keep sugar prices under check through its monthly release mechanism, but if the retail prices do not decline, it will invoke the stock-holding limit and turnover limit through the Sugar Control Order under the Essential Commodities Act. The order was in place till July 2000. The stock-holding limit, which was up to 1,000 quintals then, will be raised to 2,000 quintals a trader/licensee.

Under the turnover limit, a factory has to sell in the open market its free-sale quota within the month or face penalty. According to Vinay Kumar, Managing Director of the National Federation of Cooperative Sugar Factories, the ex-factory price is Rs. 1,700 a quintal in western Uttar Pradesh. "If still the price remains Rs. 21 or 22 in the retail market, then it is clear that middlemen are hoarding," he said.

Even as the area under groundnut showed a slight decline this kharif season, the price of groundnut refined oil now at Rs. 89 a kg is already higher by Rs 4 a kg over six months ago. Mustard refined oil at Rs 53 a kg is also high compared to Rs. 50 in March. Vanaspati showed a sharp increase from Rs. 47 to Rs. 55 last week. The price of loose tea price appreciated by Rs 3 a kg over the past six months.

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