According to Union Food Minister Pralhad Joshi, the government is considering increasing the minimum selling price (MSP) of sugar.
Various sugar bodies have issued an appeal to the government, urging timely policy interventions to support the sustainability of the sugar industry.
The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) recently highlighted the need to promptly increase the sugar MSP to Rs. 39.14 per kg for the 2024-25 sugar season.
M Prabhakar Rao, President, ISMA, said, “We need urgent support from the Govt. to increase the MSP of sugar to reduce losses being faced by the industry. The increase of MSP will protect the minimum ex-factory price particularly during the crushing season during which the prices tend to go below the cost of production, bleeding the Mills and making them financially unviable. This may lead to a delay in payment of cane arrears and sometimes defaults to the farmers. Based on the historical MSP declared by the Government, ISMA has been requesting to revise the MSP to at least Rs. 39.14 per kg, based on the same formula that was used for fixing the MSP in 2017-18 and 2018-19”.
“Even if the MSP for sugar is fixed at Rs. 39.14, the increase of the sugar prices over the last 10 years will be only 0.95 % per annum, much lower than the consumer price increase of 2.23% per year. As such, more than 60% of the sugar is consumed by the beverages, confectionary and other food industries, who are capable of absorbing these prices. There is no cost implication to the ex-chequer”, he, added.
The sugar MSP has remained unchanged at Rs. 31 per kg since February 2019. During this period, the Fair and Remunerative Price (FRP) of sugarcane has increased five times, with the FRP now standing at Rs. 340 per quintal for the 2024–25 sugar season.
According to sugar bodies, the production cost of sugar at the national level stands at Rs. 41.66 per kg, and therefore an increase in the sugar MSP is necessary.
Recently, the West Indian Sugar Mills Association (WISMA) also met with the Food Minister to discuss key issues impacting the sugar industry. The association highlighted the need to raise both the sugar MSP and the ethanol purchase price. According to the sugar body, the Minister assured that recommendations would be made to the Union Cabinet Committee and promised to increase the prices of both sugar and ethanol.
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