Cane price up, revenue stagnant: Tarun Sahwney flags growing viability concerns
Triveni Engineering & Industries Ltd. welcomed India’s increase in sugarcane FRP to ₹365/quintal for 2026-27, boosting farmer incomes by ₹15,000–20,000 crore. However, it warned mills face financial strain unless sugar MSP rises to ₹40/kg alongside higher ethanol procurement prices.
The Government has increased the sugarcane FRP for the 2026-27 sugar season. A decision hailed by the sugar industry, however, concerns remain regarding the widening gap between cane FRP and revenue from sugar sales.
Tarun Sawhney, Vice Chairman and Managing Director, Triveni Engineering & Industries Ltd., said that the government has raised the cane FRP for the 2026-27 season. He said that, indeed, it’s a farmer-friendly policy; however, the industry faces financial challenges unless there is a corresponding increase in the sugar MSP and the procurement price of sugarcane-derived ethanol, in line with the FRP.
“The government’s decision to increase the Fair and Remunerative Price (FRP) of sugarcane by Rs 10 per quintal to Rs 365 per quintal for the 2026–27 sugar season, marking a 2.81% increase over the previous year, is a positive and welcome step. This revision is expected to generate an additional income of over INR 15,000–20,000 crore for farmers, taking total cane payments to around Rs 1.3 lakh crore in the upcoming season. A strong and resilient sugar sector must be anchored in a prosperous farming community, and ensuring remunerative returns to cane growers remains fundamental to sustaining rural livelihoods and agricultural productivity,” he stated.
Sawhney said that the FRP increase has raised concerns across the sugar industry. Mills continue to operate under a sugar MSP of Rs 31 per kg (Rs 3,100 per quintal), which has remained unchanged since February 2019, while sugarcane-based ethanol procurement prices have also seen limited revisions despite rising input and operational costs.
“Aligning sugar MSP and ethanol pricing with the revised FRP is essential to maintain balance across the value chain. The sugar MSP should be increased to a minimum of ₹40 per kg, to help sustain industry viability while safeguarding farmer interests and ensuring timely cane payments,” he mentioned.
While the FRP increase rightly supports farmers, it also elevates the cost of raw material for mills, making a proportionate revision in output prices critical to avoid financial stress and ensure timely cane payments.
“Over the longer term, a more structured and formula-based pricing framework that links FRP, sugar MSP and ethanol prices to market realities, inflation and recovery trends would help create a more predictable and sustainable ecosystem for all stakeholders,” he said.
Sawhney called for a balanced policy framework that will be critical to ensuring that such efforts translate into long-term value for both farmers and the industry.
To Read more about Sugar Industry continue reading Agriinsite.com
Source : ChiniMandi
