Stock Limits Imposed on Sugar Mills

IAS Prelims 2023

The central government has imposed stock-holding limits on mills.

Sugar mills now cannot hold stocks in excess of 37 per cent of their total inventories as on September 30, 2016, while as on October 31, 2016, no mill can have stocks above 24 per cent of total inventories.

Holding sugar in excess of this specification would attract penal action.

50-60 sugar mills would be directly impacted by this order as they were holding stocks much more than the specified quantum.

Why this step ?

Retail sugar prices have been rising in the past few months to reach Rs 40-42 a kg now.

Sugar mills with the help of unscrupulous traders could further push up prices during the festival season, taking advantage of the supply shortage.

To prevent this, the government has unleashed a series of measures such as withdrawal of incentives on export, production of ethanol, and imposition of duty on exports.