New Delhi: The government is expected to increase the minimum selling price (MSP) of sugar by around 23% to Rs. 38 per kg, marking the first revision in nearly seven years, according to people familiar with the development, according to The Economic Times.
Centre may raise the ethanol procurement price for sugarcane-based feedstock, the people said, reported The Economic Times.
These moves are likely to follow the Centre’s recent decision to allow the export of 1.5 million tonnes of sugar for the 2025–26 season (October–September).
The MSP of sugar has been unchanged at Rs. 31 per kg since February 2019. The sugar industry has been urging the government to revise the rate, pointing to rising production costs. A higher MSP is expected to improve cash flow for sugar mills and support timely payments to cane farmers.
In a letter to Union food and public distribution minister Pralhad Joshi, the National Federation of Co-operative Sugar Factories said, “Based on the provisions of Section 9 of the Sugar (Control) Order, 2025, and keeping in view the 4.42% rise in the Fair and Remunerative Price (FRP) along with higher costs driven by inflation, increasing the sugar MSP to Rs. 41 per kg is reasonable and necessary.”
The industry body added that keeping ethanol prices unchanged affects the capacity of mills to clear cane dues, especially when FRP and other costs continue to climb.
Ethanol earnings make up more than 20% of the total cane payments to farmers. Prices for ethanol made from B-heavy molasses and from sugarcane juice or syrup have remained the same since the Ethanol Supply Year (ESY) 2022–23.
