Govt cuts sugar dealers' stock holding period to 15 days to curb hoarding

The government has reduced the stock holding period for sugar dealers to 15 days and capped the quantity they can hold at 1,000 quintals to prevent hoarding and ensure smooth supplies during the festive season.

The revised norms will come into effect from October 15 and remain in force till November 30, the Ministry of Consumer Affairs, Food and Public Distribution said on Thursday.

The stock holding limit will be 2,000 quintals for Kolkata and its extended metropolitan areas and Assam.

Under the revised norms, dealers cannot hold sugar for more than 15 days from the date of receipt of the stock and cannot hold more than 1,000 quintals at any time or at any place across the country.

Kolkata sources sugar from Uttar Pradesh, Maharashtra and Karnataka and supplies it to eastern India, including the North-Eastern region, the ministry said.

The higher limit for Assam has been allowed keeping in view geographical constraints, transportation logistics and consumer interest in the North-Eastern region.

“The measure is particularly aimed at further curbing hoarding, discouraging speculative trading and preventing accumulation of sugar stocks by dealers,” the ministry said.

“By limiting the quantity and duration for which sugar can be held, the Government seeks to facilitate an orderly movement of sugar through the supply chain and ensure its continuous availability to consumers at reasonable prices,” it added.

Retail prices down 15%

The ministry said average retail sugar prices have declined 15% from their August peak, while ex-mill prices have fallen by around 28% and remained stable over the last three weeks.

Retail prices are expected to decline further as the benefit of lower ex-mill prices passes through the supply chain, it said.

Sugar mills, dealers, wholesalers and other market participants have been asked to ensure continuous movement of sugar and prevent artificial accumulation or speculative hoarding.

The ministry urged wholesalers and retailers to immediately pass on the benefit of the decline in ex-mill prices to consumers.

The government said sugar mills have already been advised to begin crushing operations in accordance with agro-climatic conditions prevailing in their respective regions.