New Delhi, Sept. 1 -- The government on Tuesday halved the stock holding limit for sugar dealers to 2,000 quintals from 15 September, tightening curbs on hoarding and speculative trading ahead of the festive season and seeking to ensure adequate domestic supplies at stable prices, the ministry of consumer affairs, food and public distribution said in a statement.

Average retail sugar prices surged 37.5% to Rs.63.28 per kg on 31 August from Rs.46.02 per kg a year earlier, according to government data. Demand for sugar typically rises ahead of the festive season.

The move also assumes significance as India's retail inflation accelerated to 4.45% in July, driven by higher food and fuel prices. Sugar and confectionery have a combined weight...