Sugar prices in Maharashtra firm up by Rs 100 per quintal on reports of MSP hike; UP crushing seasons ends

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Sugar prices in Maharashtra have firmed up by around Rs 100 per quintal over the last 10 days amid market speculations of the Centre announcing a possible rise in the Minimum Support Price (MSP). The current MSP of sugar stands at Rs 3,100 per quintal.

The state’s food secretary Sudhanshu Pandey had said last week that the government is considering a proposal to increase the MSP of sugar from Rs 3,100 per quintal in order to help millers clear fair and remunerative price (FRP) dues of about Rs 22,000 crore to farmers.

The Niti Aayog recently recommended a rise in MSP to Rs 3,300 per quintal while industry body Indian Sugar Mills Association (ISMA) has suggested that MSP be raised to Rs 3,500- Rs 3,600 per quintal.

The demand for a rise in MSP has also picked up with the Commission of Agricultural Cost and Pricing (CACP) recommending a Rs 100 per tonne rise in FRP.

Maharashtra cooperative mills have sought a grade-wise rise in MSP to counter the dominance of mills from Uttar Pradesh that have captured the entire market.

However, even as the Uttar Pradesh government is basking in the ‘historic’ glow of Rs 1 lakh crore cane payments made to farmers by the end of crushing season 2019-20, the state’s mills still have whopping arrears of around Rs 14,800 crore piled against the cane purchased from farmers, the highest ever cane dues in the state.

Over 119 sugar mills in UP have already paid Rs 20,800 crore, while Rs 14,800 crore is still pending, out of which the 92 private sugar mills owe approximately Rs 13,300 crore, while the UP Cooperative sugar mills owe Rs 1,280 crore and the UP Sugar Corporation owes Rs 230 crore. The payment of Rs 20,800 crore is slightly more than 58% of the total cane dues during the season, when mills crushed 1,116 lakh tonne of sugarcane to produce 126.5 lakh tonne of sugar, again an all-time high figure.

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