There are certain pressing issues that the sugar industry is confronting today, upward revision in sugar MSP is one of them. The industry has been talking about an increase in ethanol procurement price also commensurating the increase in cane FRP, which they feel will financially support the industry in its endeavour to supply ethanol for the blending programme and S L Sharma, Executive Director of Uttam Sugar, advocates for an increase in the sugar MSP to at least Rs. 38 per kg for the ongoing season. Supporting his statement, Sharma cited the Rangarajan Committee Report on Revenue Sharing Formula, which recommended a sugarcane price based on 70% of revenue from sugar and primary by-products or 75% of revenue from sugar alone (with a 5% weightage to primary by-products).
“When the sugarcane FRP was Rs. 275 per quintal, the sugar MSP was calculated at Rs. 36.57 per kg. However, the Government has since increased the FRP to Rs. 315 per quintal, which means the sugar MSP now works out to Rs. 40.87 per kg,” he said. For the new season of 2024-25, beginning October 2024, the Government has further raised the sugarcane FRP to Rs. 340 per quintal, the sugar industry has requested an upward revision of sugar MSP to offset the higher cane FRP.
Regarding ethanol prices, Sharma noted that since ethanol prices are linked to revisions in the sugarcane FRP, the price of ethanol derived from B-heavy molasses and SugarCane Syrup should increase proportionately.
He suggested that the price of ethanol from B Heavy Molasses should be around Rs. 62.50 per litre, and the price of ethanol from Sugarcane Syrup should be around Rs. 68 per litre for the ongoing sugar season.
It should be noted that the ethanol prices have remained static, and there was no revision at the beginning of the Ethanol Supply Year of 2023-24.
Additionally, Sharma mentioned that due to higher than initially estimated sugar production in the current season, the Government should lift restrictions on ethanol production from B-heavy molasses and Sugarcane Syrup.
