Sugar stock coating for 6 months more

NEW DELHI: The government on Friday extended the stock holding limit on sugar for traders till January 8, 2010, to check the unrelenting high retail prices of the sweetener at a time the country is talking about the possibility of a deflation.

The decision to extend the notification of March 9 that set limits on stock holding and turnover for sugar traders for four months was taken at a meeting of the Union Cabinet.

"India imposes a stock limit on sugar to ensure adequate supply. It would help tackle problem of rising prices of sugar," home minister P Chidambaram told reporters after the meeting.

Prime Minister Manmohan Singh has also directed cabinet secretary K M Chandrashekhar to pressurise state governments to exercise the option immediately, officials said.

So far, only five states-Maharashtra, Delhi, Punjab, Karnataka and the Andaman & Nicobar Islands-have imposed stock holding limits despite repeated requests from the central government and the notification.

Under the stock limit order, a dealer can stock up to 2,000 quintals of sugar. Also, a trader has to sell his stocks within 30 days from the date he receives them.

While the Centre has prescribed the maximum quantity a trader can keep, states are free to lower it.

In Kolkata, the largest trading centre for the commodity in the country, however, the stock holding limit is 10,000 quintals.

The prices of the sugar have risen by over 25% since October when the 2008-09 season began as production is estimated to decline to 15 million tonnes from 26.4 mt in the previous season (October-September).

The government set stock holding limits to check suspected hoarding that was believed to have contributed primarily to spiralling prices.

The CCEA also fixed the minimum support price (MSP) for raw jute at Rs 1,375 per quintal for current financial year, up Rs 125 per quintal compared to 2008-09. "The increase in the MSP of raw jute is expected to encourage the farmers to step up investment in jute cultivation and thereby production and productivity of jute in the country, Mr Chidambaram said.

An another decision the Cabinet Committee on Economic Affairs (CCEA) approved the implementation of a gas-based power project in Tripura by North Eastern Electric Power Corporation Ltd (NEEPCO). The 100-mw power project is estimated to cost Rs 421.01 crore. "The project shall be funded with debt and equity ration of 70:30. The debt portion shall be met through commercial borrowing and equity from internal resources of NEEPCO," the home minister said.