Indian Sugar Mills Association (ISMA) has urged the government to increase the minimum support price (MSP) of sugar from the current level of Rs 31 per kg to at least Rs 36-37 per kg in line with fair and remunerative price (FRP) of cane. MSP of sugar was last announced in February 2019.
In a communication to the food ministry, ISMA President Aditya Jhunjhunwala has said ‘the government had fixed MSP of sugar at Rs 31 per kg in February 2019 when the FRP of sugarcane was Rs 275 per quintal. Since then, FRP of sugarcane has increased twice,’.
Since 85% of the sugar mills’ revenue comes from the sales of sugar, it is an important component to pay the cane price to farmers, it stated.
“The cost incurred on account of interest on term loans and depreciation of plant and machinery and other raw material cost have increased substantially,” ISMA stated.
In June, 2018 the government had introduced the concept of MSP of sugar so that industry could get at least the minimum cost of production of sweetener so as to enable them to clear cane price dues of farmers.
ISMA communication also stated that several state governments as well as the Niti Aayog, committee of secretaries, group of ministers as well as the Commission for Agricultural Costs and Prices (CACP) have recommended for increasing the MSP of sugar to appropriate levels.
It may be mentioned that the sugar body had earlier written to the Prime Minister’s Office (PMO) to increase the MSP of sugar to prevent shortage of liquidity with mills and the resultant high cane price arrears in the next season.