In what smacks of a return to the licence-permit raj, the government is likely to impose stockholding limit on sugar mills and ban futures trading in sugar with an objective to push more supplies into the market in a desperate bid to tame rising prices. The food ministry is considering a proposal to ask mills to stock a maximum quantity of 29 per cent of their annual production and to dispose off the remaining sugar in the open market, sources said. Besides, the government is also considering a ban on futures trading in sugar to check rising prices. Finance minister Arun Jaitley met food ministry officials on Monday (August 22) to discuss the proposed ban. Food minister Ram Vilas Paswan said on Wednesday, “We don’t want (sugar) prices to rise further. In the interest of consumers, we have recommended ban on sugar futures trading.” Stockholding limit on mills and ban on futures trading would be fourth and fifth in a series of measures to control rising sugar prices that have failed to tame sentiments so far. In April, the Centre empowered states to impose stockholding limit on dealers and traders for up to a maximum of 500 tonnes, after retail prices crossed Rs 40 a kg. For West Bengal, the limit was set at 1,000 tonnes. Only Uttar Pradesh, Maharashtra, Karnataka and Delhi have imposed the limit so far. In May, the government withdrew export incentive to sugar mills, while it imposed an export duty of 20 per cent in June to divert supplies to the domestic market. Commenting on the government’s several failed attempts to manage supplies, a well-placed industry insider said, “It is akin to bringing back the controls that were lifted in 2013. How can the mills be held accountable if traders do not lift sugar?” Sugar traders have curtailed their daily purchases because of the stockholding limit, he added, while insisting not to be named. By imposing the stockholding limit on mills, the government expects to force them to dispose off their excess inventory in September, so that there is no shortage in the market when the festival season commences in October, officials said. The government has estimated this year’s (October-September) sugar output at around 25 million tonnes. So, asking mills to retain a maximum limit of 29 per cent will ensure an opening stock of at least 7.2 million tonnes as of October 1, which is sufficient to meet the demand for three months. Sugar mills start crushing cane from November and continue to do so till May to cater to the entire year’s demand. Due to two consecutive years of drought and lower area planted under sugarcane, the industry estimates output to decline to 23 million tonnes in 2016-17 season.