Government moves to keep sugar, onion prices in check

New Delhi, Aug 29 (IANS) The union government has imposed stock limit on sugar mills to keep sugar prices under control during the festive season and also enabled states to impose control measures on traders of onion in view of "abnormal rise" in its prices in recent weeks despite better production than last year.

Food and Public Distribution Minister Ram Vilas Paswan said on Tuesday that stock limit had been imposed on sugar mills for the next two months.

Paswan said in tweets that there was "no shortage" of sugar for domestic consumption in the country.

"For keeping the prices of sugar under control during the festival months of September and October 2017, stock limits have been imposed on sugar mills," he said.

"Stock limit for September 2017 is 21 per cent of total sugar available with sugar mills during 2016-17 sugar season. Stock limit for October 2017 is 8 per cent of total sugar available with sugar mills during 2016-17 sugar season," he added.

India is the second largest producer of sugar in the world. The government had last month increased import duty on sugar to 50 per cent to control the dumping of sugar in the country when international prices go down.

Sugar prices in the country are currently above Rs 40 per kg in the retail market while branded sugar is priced over Rs 50 per kg.

In another decision, the government also enables states and union territories to impose control measures on traders and dealers of onion to ensure its adequate availability at reasonable prices.

The Ministry of Consumer Affairs, Food and Public Distribution on Tuesday said in a press release that the government had on August 25 notified its decision that states could now impose stock limits on onions and take measures for de-hoarding and action against speculators and profiteers.

"This has been necessitated due to the abnormal rise in prices of onions in recent weeks particularly from July-end of this year onwards, though the production and supply of onions in the market is better than last year during the same period," the release said.

It said that as per all India average retail price, the prices have increased from Rs 15 per kg to Rs 28.94 per kg. In the metros, the rise has been even steeper -- Rs 31 per kg in Chennai, Rs 38 per kg in Delhi, Rs 40 per kg in Kolkata and Rs 33 per kg in Mumbai.

"After examination of all the circumstances, the government has inferred that there are some reasons other than shortage of onions contributing to the abnormal price rise of onions like hoarding, speculation etc.," the release said.

It said there was need to enable states to take action against those traders who were engaged in speculative trading, hoarding and profiteering in onions.

"The measure is expected to bring the prices of onions down to a reasonable level to give an immediate relief to the consumers," it added.