UPSMA : Sugar industry faces stress as SAP hike increases production cost
UP Sugar Mills Association warned that the recent Rs 30/quintal SAP hike will raise production costs by Rs 250–275/quintal, worsening losses since selling prices already trail costs. With rising sugar surplus and weak consumption, prices are expected to remain flat or decline. The association also sought removal of the 25% molasses reservation rule.
Lucknow: The UP Sugar Mills Association (UPSMA) said the recent hike of Rs 30 per quintal in the State Advisory Price (SAP) would further stress the sugar industry while increasing the cost of production by Rs 250-Rs 275 per quintal.
The association made this projection while submitting a memorandum to CM Yogi Adityanath on Oct 30.
UPSMA stated that the average selling price of sugar so far was Rs 3933 per quintal while the cost of production was Rs 4143 per quintal. This gap of Rs 210 per quintal already had the industry under stress, and now the additional deficit of Rs 250 to Rs 275 per quintal makes the dent even more severe. “This cost cannot be absorbed or passed on,” the association said.
Sugar recovery has been in drastic decline, and its resultant impact on the cost of production of sugar is major. Nationwide, sugar production for the season 2025-26 is estimated to be around 340 lakh metric tonnes (LMT), with domestic consumption projected to be around 270 to 280 LMT. After taking into account the diversion for ethanol of 30 to 35 lakh tonnes by the end of the season, the country would have a surplus of sugar of over 30 LMT. This will keep the prices of sugar suppressed.
The association predicted that the sugar price for the next 12 months will remain flat. It is expected to go downward amid falling consumption in the country, it said.
The UPSMA further demanded that the condition of reserving 25% molasses for country liquor should be done away with. The association pointed out that while the market price of C-heavy molasses was Rs 100 per quintal, it was levied by the country liquor lobby at Rs 152 per quintal, resulting in a loss of Rs 1200 crore.
To Read more about Sugar Industry continue reading Agriinsite.com
Source : The Times Of India
