Government Considers Ethanol Price Hike and Sugar MSP Increase for 2024-25 Season

The government is contemplating an increase in ethanol prices, raising the minimum selling price (MSP) of sugar, and reviewing sugar exports for the 2024-25 season. Food Minister Pralhad Joshi announced that discussions with the petroleum ministry are ongoing, while a committee of secretaries is deliberating on the sugar MSP. Favourable monsoon conditions are optimistic for next year's production.

The government is considering increasing ethanol prices, raising the minimum selling price (MSP) of sugar, and reviewing sugar exports for the 2024-25 season, according to Food Minister Pralhad Joshi.

"The petroleum ministry is seized of the matter. We are in touch with the petroleum ministry. It is well under consideration to hike the ethanol price," Joshi told reporters at an industry conference.

Regarding sugar exports, Joshi stated that a decision will be made after evaluating next year's production and sugar availability. He also mentioned that a committee of secretaries is deliberating on a proposal to increase the minimum selling price of sugar, which has remained at Rs 31 per kg since February 2019.

Joshi expressed optimism about sugar production for the 2024-25 season, starting in October, citing favourable monsoon conditions. Ethanol prices, which are set by the government, have not been raised since the 2022-23 supply year (November-October). Current rates of ethanol produced from cane juice, B-Heavy molasses, and C-Heavy molasses are Rs 65.61, Rs 60.73, and Rs 56.28 per litre, respectively.

The food minister also noted that the introduction of sugar MSP in 2018 has significantly reduced cane dues to farmers, with about 99 percent of Rs 1.14 lakh crore paid. Over the last decade, India's sugarcane cultivation area has increased by 18 percent to 6 million hectares, with production up 40 percent to 491 million tonnes.

Food Secretary Sanjeev Chopra echoed this optimism, stating that the sugarcane crop outlook for 2024-25 is "very good" thanks to favourable monsoon conditions. ISMA President M Prabhakar Rao advocated for increasing the sugar MSP to at least Rs 39 per kg and allowing the export of 2 million tonnes.

ISMA has projected gross sugar output at 33.9 million tonnes for the 2024-25 season, with an upward revision due to good monsoon conditions. With the diversion of 4-4.5 million tonnes for ethanol production and a closing stock of 8.3 million tonnes, there will be 2 million tonnes available for export.

"Exports should be allowed immediately as global prices have firmed in the last two weeks due to a likely drop in Brazil's crop. We can regain the lost market," added ISMA Vice President Gautam Goel.

(With inputs from agencies.)