As the year 2024 comes to an end, the sugar industry is still hoping for an increase in the Minimum Selling Price (MSP) of sugar, arguing that this move would help address the financial difficulties they are facing.
Sugar millers say they are struggling due to a drop in sugar prices at the start of the new season. This price decline is making it more challenging for mills to generate sufficient revenue to make timely payments to farmers for their sugarcane.
While speaking with ChiniMandi, Tarun Sawhney, Vice Chairman & Managing Director of Triveni Engineering and Industries Ltd, stressed the need to increase the sugar MSP. He said, “The recent fluctuations in domestic sugar prices, including an 18-month low earlier this year, highlight the need for a thoughtful reassessment of the Minimum Selling Price (MSP) for sugar. While seasonal demand has provided slight relief, the current MSP of Rs 31 per kg unchanged since 2019, no longer aligns with the rising production costs and the increased Fair and Remunerative Price (FRP) for sugarcane. Adjusting the MSP to Rs 39.14 per kg could prove to be a pivotal step towards ensuring the sustainability of the entire sugar value chain. This adjustment would not only stabilize the financial health of mills but also secure fair and consistent returns for sugarcane farmers, creating a balanced ecosystem that supports long-term growth.”
“India’s sugar industry has immense potential, as seen in rising domestic consumption, strong export opportunities, and increasing focus on ethanol production. A proactive approach to revisiting the MSP will ensure that we address current challenges while capitalizing on these growth opportunities. Collaborative efforts from all stakeholders, including policymakers, can pave the way for a more sustainable future for Indian sugar,” he further added.
In June 2018, the Indian government set the MSP of sugar for the first time at Rs. 29 per kg, when the Fair Remunerative Price (FRP) for sugarcane was Rs. 2,550 per tonne. However, while the FRP has been steadily increasing, the MSP for sugar has remained unchanged since February 2019. The FRP of sugarcane climbed significantly from Rs. 2,550 per tonne in 2017-18 to Rs. 3,400 per tonne in the 2024-25 season. In contrast, the MSP of sugar has remained at Rs. 31 per kg since 2018-19.
Highlighting the growing gap between the rising FRP for sugarcane and the stagnant sugar MSP, the industry is urging the government to address this issue by raising the sugar MSP.
Millers are optimistic that the government will respond favorably to their request for a higher MSP, which they believe could ease their financial challenges and ensure that farmers are paid on time.
