Amid rise in sugarcane Fair and Remunerative Price (FRP) by Rs 25 per quintal to Rs 340 per quintal for the 2024-25 season, sugar industry is again urging the government to increase the diversion of B Heavy Molasses and sugarcane juice for ethanol production.
West Indian Sugar Mills Association (WISMA) emphasises that increase in sugarcane FRP will put pressure on sugar industry. WISMA President Mr. B. B. Thombare while speaking to Chinimandi said, “Due to ethanol restrictions, the sugar industry is already bedridden, and on top of that, an increase in FRP for 2024-25 sugar season will exacerbate our troubles.”
“A rise of Rs. 250 per tonne is the highest so far, which will further put pressure on the sugar industry. We used to make prompt FRP payments because of ethanol, but now defaults are occurring. More than 50 percent of sugar mills in Maharashtra are in default. To ensure smooth payments, we request the government to increase sugar diversion for ethanol production. The government had estimated sugar production at 290 lakh tonnes, but now output is projected to reach 325 lakh tonnes. Domestic consumption of 285 lakh tonnes is achievable, and carryover stock is around 100 lakh tonnes. Unless the government allows diversion of B Heavy Molasses and sugarcane juice for ethanol production, it will be difficult for us to sustain, as we have no cash flow. With only one and a half months left in the sugar season, the government should consider our plea, so we can recover the losses incurred in the last three months. We urge the government to prioritize the liberalization of the ethanol policy and then permit the diversion of BHM and sugarcane juice for ethanol production. Otherwise, we will not be able to afford the revised FRP. The government should also consider increasing the sugar MSP proportionately to at least Rs. 3500 per quintal,” he further added.
The Food Ministry, in early December, directed sugar mills not to use cane juice or syrup to produce ethanol. In a U-turn, the central government, in mid-December, allowed the utilization of juice as well as B-heavy molasses to produce ethanol but capped the diversion of sugar at 17 lakh tonnes for the current marketing season.
The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi approved the FRP of sugarcane for Sugar Season 2024-25 at Rs 340/quintal at sugar recovery rate of 10.25%. This is historic price of sugarcane which is about 8% higher than FRP of sugarcane for current season 2023-24. The revised FRP will be applicable w.e.f. 01 Oct 2024.
With this approval, sugar mills will pay FRP of sugarcane @ ₹ 340/quintal at recovery of 10.25%. With each increase of recovery by 0.1%, farmers will get additional price of ₹ 3.32 while the same amount will be deducted on reduction of recovery by 0.1%. However, ₹ 315.10/quintal is the minimum price of sugarcane which is at recovery of 9.5%. Even if sugar recovery is lesser, farmers are assured of FRP @ ₹ 315.10/quintal.
