India’s biggest sugar producing state imposed limits on the quantity of sugar that traders can keep as the authorities try to arrest rising prices of the sweetener.
India’s western state of Maharashtra issued late on Thursday an order that prohibits traders from holding more than 500 tonnes of sugar. The federal government asked states last month to impose the limit to avoid hoarding.
“Stock limit will deter speculators keen to hoard sugar. As far as traders are concerned, they can function normally even with the stock limit,” said Ashok Jain, president of the Bombay Sugar Merchants Association.
India, the world’s biggest sugar consumer, is likely to become a net importer of the sweetener in 2016/17 as back-to-back drought years dried irrigation channels and ravaged cane fields, with output in the country’s biggest producing state seen dropping over 40 percent.