Sugar industry seeks price alignment with higher cane FRP, warns of surplus
ISMA urged the government to revise ethanol procurement rates and sugar MSP to match the higher FRP, warning current rates make ethanol production unviable and strain mills. It proposed an MSP of Rs 40.2/kg and exporting 20 lakh tonnes to manage surplus, ensuring farmer income, industry viability, and supporting ethanol blending goals.
The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) has urged the government to revise ethanol procurement prices and the minimum selling price (MSP) of sugar in line with the higher Fair and Remunerative Price (FRP) of sugarcane, warning that the current mismatch is rendering ethanol production unviable and straining sugar mill finances.
In a letter to Union Minister for Consumer Affairs, Food and Public Distribution Prahlad Joshi, ISMA highlighted that while the FRP of sugarcane has increased by nearly 16.5 per cent since 2022–23, ethanol procurement prices have remained unchanged since 2023–24. The association noted that the cost of producing ethanol from B-heavy molasses and sugarcane juice has now reached Rs 66.09 and Rs 70.70 per litre, respectively — higher than the current procurement rates.
“The prevailing misalignment has made ethanol production economically unviable, discouraging diversion of sugar towards ethanol and raising the risk of surplus sugar,” the industry body stated.
ISMA projects India’s 2025-26 sugar season (SS) to produce 349 lakh tonnes of sugar — an 18 per cent increase over the current year — with around 50 lakh tonnes expected to be diverted for ethanol production. However, without a price revision, this diversion may fall sharply, it warned.
The association also called for an MSP hike for sugar to Rs 40.2 per kg, up from the current Rs 31 per kg, last revised in 2019. ISMA argued that the cost of sugar production for 2025–26 is around Rs 40.2 per kg, based on the FRP of Rs 355 per quintal, and that automatic linkage between MSP and FRP is necessary to ensure fair returns for farmers and millers alike.
Additionally, ISMA sought government permission to export around 20 lakh tonnes of sugar in 2025–26 to manage the expected surplus.
ISMA Director General Deepak Ballani said the timely revision of ethanol and sugar prices is crucial for ensuring 5.5 crore sugarcane farmers’ income, maintaining industry viability, and supporting India’s ethanol blending and energy security goals.
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Source : Business Today
