The Union Cabinet on Wednesday approved an extension in the validity of a government order to enable state governments to regulate the production, sale, supply, stock and movement of sugar.

In a meeting on October 27, 2016, the Cabinet had approved the order to allow state governments to regulate supply of sugar in the market for six months. 

The Cabinet's decision on Wednesday will extend the validity of this order -- which otherwise would have expired this month -- for another six months.

"The main objective of Wednesday's decision is to enable the state governments to issue control orders with the prior concurrence of the central government, for fixing stock limits/licensing requirements in respect of sugar, whenever the need is felt by them," an official statement said.

"It is expected to help improve availability of the commodity to the general public at reasonable rates, and control/curb hoarding and profiteering," it said.

The price of sugar is being monitored by the Department of Food and Public Distribution regularly at the factory gate as well as in the domestic market, the statement said.

It said the step was taken in September 2016 after retail prices of sugar showed a sudden spurt.

"The price rise appeared to be more on sentiment than actual shortage. In order to regulate supply of sugar and address issue of speculative pricing, fixing of appropriate stock limits on need basis was essential," the statement said.

The government also allowed the import of restricted quantity of five lakh tonnes of raw sugar at zero duty to keep prices in control.