Demand to hike minimum selling price (MSP) of sugar

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New Delhi: Now the beleaguered sugar industry pins hope on government as they are saddled with surplus sugar stock. National Co-operative Sugar Factories Federation (NCSFF) president Dilip Walse Patil recently met with officials of the PM’s office to discuss the crisis prevailing in the industry.

During his meeting with officials, NCSFF demanded that MSP (Minimum Selling Price) of sugar should be increased from the present level of Rs 31/kg to help mills improve their financial health. NCSFF also sought extension for the scheme of making buffer stock of 30 lakh tonnes of sugar and demanded that the stock volume should be raised to 50 lakh tonnes to support sugar prices, by removing excess from the supply chain.

Sugar mills in India claim that the cost of sugar production is 35 to 36 rupees, and have been asking to increase the minimum selling price of the sugar.

Concerned over mounting cane arrears ahead of Lok Sabha polls, the government on February 14, 2019, hiked the minimum selling price of sugar by Rs 2 per kg from Rs 29 to Rs 31 to help millers clear farmers’ dues.

Sugar prices have remained weak throughout this year due to a glut in the domestic market. Millers in the country claim due to excessive sugar production and depressed sugar prices, they failed to accumulate money and pay the cane arrears to the sugarcane farmers.

The industry body, ISMA, had estimated that the sugar production in the current year for the country is anticipated to be around 33 MMT, about 5,00,000 tonnes more than last year.

According to the ISMA, “The sugar stocks at the end of the 2018-19 marketing year would be at a higher level at around 14.7 MMT taking into account the opening balance of 10.7 MMT as on October 1, 2018, and estimated record output of 33 MMT and domestic demand of 26 MMT as well as the export of 3 MMT.”

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