In order to check the hoarding of sugar to avoid price rise during the festival season later this year, the government today extended the validity of de-hoarding notification issued to states in early March this year till January 8 next year.

While extending the stock limit order imposed on sugar traders, under the Essential Commodities Act, by six months till January 8, 2010, in the meeting of the Union Cabinet today, Prime Minister Manmohan Singh also directed Cabinet Secretary to talk to chief secretaries of states through video-conferencing insisting the implementation of the de-hoarding notification.

Though traders can stock up to a maximum of 2,000 quintal of sugar under the stock limit order, imposed for four months from March 9 this year, states are free to lower these limits. The notification stipulates that traders sell their stock within 30 days from the date of receiving the sugar.

Singh’s instruction to the Cabinet secretary comes in the backdrop of the fact that only five states have notified the de-hoarding order so far with only two more states promising to enforce it soon.

“This (extension of the order) is expected to help in the efforts being undertaken to tackle the problem of rising prices of sugar and also improve its availability,” home minister P Chidambaram told reporters after the Cabinet meeting.

The move was necessitated after the prices of the sugar rose by over 25 per cent since October last year. Production is also estimated to decline to 15 million tonnes from 26.4 million tonnes in the previous season (October-September), as against the annual domestic demand of 22.5 million tonnes.