Sugar industry seeks MSP hike to Rs 4200–4500 per quintal
India’s sugar industry has urged the Centre to raise sugar MSP to ₹4,200–4,500 per quintal after higher cane FRP increased production costs. Mills cited stagnant sugar, ethanol, and power prices, limited exports, and rising interest burdens, warning that financial stress threatens long-term viability of the sector.
Pune: The sugar industry has urged the central government to raise the minimum selling price (MSP) of sugar to between Rs 4200 and Rs 4500 per quintal, citing rising production costs and financial stress across mills.
The demand comes after the Centre increased the Fair and Remunerative Price (FRP) of sugarcane by Rs 100 compared to last year, fixing it at Rs 365 per quintal for a 10.25 per cent recovery rate, including harvesting and transportation costs. Over the past seven years, FRP has risen by about Rs 900 per tonne, but the MSP of sugar has remained unchanged during the same period, Sakal reported.
Industry stakeholders said the mismatch between rising input costs and stagnant sugar prices has put mills under pressure. They also pointed out that power tariffs have not been revised by state governments, while ethanol prices have not been increased by the Centre. In addition, sugar exports have remained limited, further affecting revenues.
According to industry representatives, sugar prices have largely remained in the range of Rs 3000 to Rs 3700 per quintal over the past decade, leaving many mills operating with thin or negative margins. They believe that a revision in MSP is essential to restore financial stability in the sector.
Hrishikesh Gaikwad, Director of Someshwar Sugar Factory, said the MSP was Rs 2900 per quintal in June 2018 and was raised to Rs 3100 per quintal in February 2019, when the FRP stood at Rs 275 per quintal. He said a substantial increase in MSP is now necessary.
Nitin Shinde, Executive Director of Vrudheshwar Sugar Factory, said the cost of raw materials has increased significantly, while the price of finished sugar has not kept pace. This, he noted, has pushed the interest burden to between Rs 300 and Rs 600 per tonne, adding to the financial strain on mills.
Chandrakant Dhage, Executive Director of Bhimashankar Sugar Factory, said the MSP should be linked to the cost of production. He added that without a meaningful increase to around Rs 4400 to Rs 4500 per quintal, the industry will continue to face financial difficulties.
Industry leaders said a timely revision in MSP would be critical to sustaining operations and ensuring the long-term viability of the sugar sector.
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Source : ChiniMandi
