Sugar mills seek higher sugar prices as rising FRP intensifies financial stress
India’s sugar mills are facing financial strain as sugarcane FRP has risen from ₹2,750 to ₹3,650 per tonne since 2018–19, while sugar’s minimum selling price has remained at ₹3,100 per quintal since 2019–20. The industry is seeking higher sugar and ethanol prices, loan restructuring, subsidies, and other government support measures to improve viability and ensure timely farmer payments.
Kolhapur: Rising sugarcane prices and unchanged sugar rates are increasing financial pressure on sugar mills, with industry representatives calling for immediate policy support from both the central and state governments to improve viability and ensure timely payments to farmers.
Over the last seven years, the Fair and Remunerative Price (FRP) for sugarcane has risen sharply from Rs 2,750 per tonne in the 2018–19 season to Rs 3,650 per tonne for the current season. In contrast, the minimum selling price of sugar was increased only once during the same period—from Rs 2,900 per quintal to Rs 3,100 per quintal in 2019–20—and has remained unchanged since then.
Industry stakeholders say the mismatch between rising cane procurement costs and stagnant sugar prices has made it increasingly difficult for mills to maintain operations and meet FRP commitments.
The sector is demanding that the minimum selling price of sugar be raised to at least Rs 4,100 per quintal so that mills can absorb increasing production costs and improve cash flow.
At the same time, industry representatives said sugar price increases often trigger concerns over inflation and impact public sentiment. As a possible solution, they have proposed introducing a dual pricing model under which sugar sold for commercial use would carry a higher price while household consumption remains protected.
According to the industry, nearly 60% to 65% of total sugar production in the country is consumed by commercial users, while only around 35% is used at the household level. Stakeholders argue that this creates room for differentiated pricing without significantly affecting consumers.
To ensure transparency and avoid misuse, another suggestion is for the government to procure sugar from mills and supply it to commercial users at revised rates.
The industry has also expressed concern over the pace of policy action. The Maharashtra government constituted a committee under the Chief Secretary on April 24, 2026 to study challenges in the sugar sector and submit recommendations within three months. However, stakeholders say there has been no visible progress and believe any recommendations may not be implemented in time for the upcoming season.
The sector has submitted a wider set of demands to policymakers.
At the central level, the industry is seeking a Rs 10 per litre increase in ethanol prices across all categories, equal ethanol allocation for all distilleries and revision of sugar prices in proportion to FRP increases.
At the state level, demands include restructuring all sugar mill loans for 12 years, government support for 50% of interest costs, directions to banks for short-term funding to clear pending FRP dues, protection from action until FRP payments are completed, conversion of short-term loans into long-term borrowings, restoration of Rs 1.50 per unit subsidy for cogeneration projects, immediate clearance of pending dues from Mahavitaran and a subsidy of Rs 500 per tonne for producers on the lines of Punjab.
Industry representatives said timely intervention is necessary to maintain the financial health of mills and protect returns to sugarcane farmers.
To Read more about Sugar Industry continue reading Agriinsite.com
Source : ChiniMandi
