New Delhi: Indian Sugar Mills Association (ISMA) on Monday urged the government to increase the minimum support price (MSP) of sugar from the current level of Rs 31 per kg to Rs 38 per kg in line with fair and remunerative price (FRP) of cane.
In a communication to the food ministry, ISMA President Aditya Jhunjhunwala has said, “MSP of sugar was fixed for the first time, by the government on 7th June, 2018 at the rate of Rs. 29 per kg, when the FRP of sugarcane was Rs. 2550 per ton. In the sugar year 2018-19, the FRP was increased to Rs. 2750 per ton and the MSP of sugar was also increased to Rs. 31 per Kg on 14th February, 2019. There has been no increase in MSP since 2018-19 despite FRP going up significantly.”
“We had previously informed that the cost of production of sugar was Rs 36 per Kg and now which has gone up to Rs. 38 per Kg due to increase in FRP and also other cost elements”, he further added.
The apex sugar body in the letter dated 25th January, 2023 had informed government that the cost of production of sugar has gone up to Rs. 37 -38 per Kg at the current FRP. This includes increase in FRP over the last year plus factual drop in recovery of sugar by 0.20 per cent (between SS 2022-23 and 2021-22) resulting in significant increase in cost of production of sugar.
ISMA claims that besides cost of raw material, cost of other components have also gone up:
- Cost of steel and other metal impacting the repair and maintenance;
- Significant increase in cost of important chemicals like sulphur, lime etc.;
- Significant increase in price of packing materials especially jute bags and HDPE/ PP bags (due to HDPE granules price increase);
- Increase in cost of manpower,
- Significant increase in interest rates (REPO rate up by 1% over last year) impacting term loans and working capital ISMA communication also stated that Commission for Agricultural Costs and Prices (CACP) and other expert bodies like Group of Ministers, Committee of Secretaries, Niti Aayog, and various state governments have recommended for increase in the MSP of sugar to appropriate level duly considering the increase in FRP of sugarcane. Hike in MSP would enable the sugar mills to make timely payment to the sugarcane farmers.
