Following the increase in the sugarcane Fair and Remunerative Price (FRP), sugar industry bodies in India have welcomed the government’s decision but have also called for an increase in the Minimum Selling Price (MSP) of sugar. The Central Government has approved a Rs. 15 per quintal increase in the FRP of sugarcane for the 2025–26 crushing season. With this hike, the new FRP stands at Rs. 355 per quintal, up from the existing Rs. 340 per quintal, based on a 10.25% sugar recovery rate.
Industry representatives are emphasizing the widening gap between the cost of sugar production and the stagnant MSP for sugar. They claim that despite rising production costs, the sugar MSP has remained unchanged since 2019, creating challenges for sugar producers. To address this disparity, industry bodies in India are actively calling on the government to raise the sugar MSP from the current rate of Rs. 31 per kg.
The Indian Sugar Mills Association (ISMA), in a statement, said, “We sincerely welcomes the government’s decision to increase the Fair and Remunerative Price (FRP) of sugarcane by Rs. 15 per quintal for the 2025–26 sugar season. This progressive and farmer-friendly decision reflects the Government’s continued commitment to the welfare of India’s sugarcane farmers and is expected to result in a substantial increase in their incomes. The revised FRP is projected to enhance the earnings of approximately 5.5 crore sugarcane farmers by over Rs. 20,000 crore, taking the total to around Rs. 1.2 lakh crore in the upcoming sugar season.”
At the same time, ISMA also requested for the need for alignment of MSP of sugar and ethanol procurement prices with the revised FRP of sugarcane. Such alignment is essential to maintain financial sustainability across the value chain—from farmers to sugar mills.
ISMA further said, “While the increase in FRP rightly benefits farmers, it also raises the cost of raw material for mills. Ensuring that the selling price of sugar and ethanol procurement prices are adjusted proportionately would allow mills to absorb these increased costs without financial strain. This policy alignment would enable sugar mills to improve their cash flows and liquidity, thereby ensuring that farmers receive timely dues. It would also encourage continued investment in ethanol production, which supports India’s clean energy goals and reduces dependency on fossil fuels.”
“We are confident that the Government will consider this important issue with the same sensitivity and foresight it has shown in increasing the FRP, thereby supporting both the farming community and the sugar industry in a balanced and sustainable manner, as always, “ISMA added.
The West Indian Sugar Mills Association (WISMA) also welcomed the decision to increase the sugarcane FRP. However, it stressed the need to increase the sugar MSP. The sugar body stated, “We request the government to increase the MSP of sugar to Rs. 4,200 per quintal to help the sugar industry emerge from its financial crisis.”
