To check spiralling price of sugar which has crossed Rs.40 per kg, the government on Thursday imposed stock limits on sugar mills during the festival season till October-end.
The decision to impose stock limit on millers would boost availability of sugar in the open market and help in controlling the price rise.
"It has been decided to impose stock limit on sugar stock to be held by sugar mills at the end of September and October, 2016," Food Minister Ram Vilas Paswan tweeted.
This is the first time that the government has imposed curbs on the Rs.80,000-crore sugar industry ever since it was partially decontrolled in 2013.
As per the decision, mills should not, at the end of September, hold more than 37 per cent of their total sugar available with them during the entire 2015-16 marketing year.
At the end of October, the sugar stock should not be more than 24 per cent of the total supply. Sugar marketing year runs from October to September.
"The stock limit on sugar at the end of September 2016 is 37 per cent of the total sugar available with sugar mills during 2015-16 sugar season.
"The stock limit on sugar at the end of October, 2016 is 24 per cent of the total sugar available with sugar mills during 2015-16 sugar season," he tweeted.
Stock holding limits are already in place on sugar dealers/traders.
Sugar prices have started inching up as domestic production has fallen to 25.1 million tonnes in the current 2015-16 marketing year as compared to 28.3 million tonnes in the last year.
The outlook for the next 2016-17 marketing year is also not very encouraging. Industry body ISMA has projected sugar output to fall to 23.26 million tonnes although it feels that there would be sufficient supply to meet the domestic demand.
Retail price of sugar is ruling at Rs.42 per kg in the national capital, while in some locations the price is as high as Rs.52 per kg.
The government has recently imposed 20 per cent export duty on sugar check prices. The Consumer Affairs Ministry has also recommended ban on futures trade in sugar.