The central government had imposed stock holding limit on sugar producers for September and October with a view to increase supply of the sweetener during the festival season and deter producers and distributors from profiteering.
The government has invoked the Essential Commodities Act, 1955 and the Sugar (Control) Order, 1966 and directed sugar producers not to hold any stock of sugar in excess of quantities available at the end of the month.
For September 2017 the order has set a stock limit of 21 per cent of the total sugar available with them during 2016-17 sugar season while for October the stock holding limit has been set lower at 8 per cent of the total sugar available with them during 2016-17 sugar season.
The government has estimated the total availability of sugar with individual producer as the difference between the total of opening stock on 1 October and sugar that would be produced and sugar imported minus exports.
''Opening stock of sugar as on 1st October, 2016 + sugar produced during 2016-17 sugar season – sugar exported during 2016-17 sugar season + sugar imported during 2016-17 sugar season''.
Further, the centre has also authorised state governments and union territory administrations to enforce the Sugar Control Order, 1966 to keep prices steady during the festival season.
The intervention comes amidst rising sugar prices. The sweetener is currently selling at more than Rs40 per kg, while the branded sugar is being sold at Rs50 per kg.
The government hiked import duty last month from 40 per cent to 50 per cent to curb inward shipment and check price rise.
India, the world biggest sugar consumer, produced less sugar in the 2016-17 marketing year ended 30 September 2016, raising concerns of a shortage for the upcoming festive season.
The centre also on Tuesday asked state governments to hold de-hoarding operations for onion and act against speculators and profiteers.
Onion prices have soared from Rs15 per kg in July to Rs28, while the increase has been much steeper in the metros. Onion is currently being sold at Rs31 per kg in Chennai, Rs38 per kg in Delhi, Rs40 per kg in Kolkata and Rs33 per kg in Mumbai.