Government Poised to Raise Minimum Selling Price of Sugar

The government is nearing a decision on increasing the minimum selling price (MSP) of sugar, which has been unchanged since 2019, to support mills amid rising production costs. This follows industry calls for a hike to Rs 42 per kg. The upcoming season's sugar production looks promising.

The government is on the brink of deciding whether to raise the minimum selling price (MSP) of sugar, a move that could happen in the coming days, Union Food Secretary Sanjeev Chopra announced on Saturday.

At a conference organized by the All India Sugar Trade Association (AISTA), Chopra revealed discussions are underway about the current MSP proposal. Despite annual increases in the fair and remunerative price (FRP) paid to sugarcane farmers, the MSP has stagnated at Rs 31 per kg since 2019.

Industry bodies such as the National Federation of Cooperative Sugar Factories (NFCSF) have been pressing the government to elevate the MSP to at least Rs 42 per kg to help sugar mills stay operational amidst escalating production costs. Chopra also highlighted a promising outlook for sugar production in the 2024-25 season, with an increase in sugarcane sown areas.

The 2023-24 season is set to yield 32 million tonnes of sugar, less than the previous season's 32.8 million tonnes, but enough to meet the domestic demand of 27 million tonnes. In addition, he mentioned that preliminary research from the agriculture ministry shows ethanol derived from sugarcane might require less water than ethanol from maize and rice.

(With inputs from agencies.)