As per market reports, the Ex-mill prices of sugar in most of the States are under pressure and are showing a downward trend. Average prices in Tamil Nadu are hovering between Rs. 3200 – 3225 per quintal, while in Northern states the Ex-mill prices are in the range of Rs. 3160 – 3180 per quintal. Whereas, Ex- mill prices in Maharashtra and Karnataka are reeling at Minimum Selling Price (MSP) of sugar. The current prices are almost Rs. 80 – 100 per quintal less than that what was prevailing a year back during the corresponding period. This is not a good sign as low sugar prices, much below the cost of production for the last several months, have adversely affected the liquidity of mills and their ability to pay the FRP to cane farmers. It is feared that if such a situation persists then cane price arrears will jump very fast to uncomfortable levels.
According to Indian Sugar Millers Association (ISMA), one solution to this problem is the upward revision of MSP of sugar by the Government, which was last revised 2 years back when the FRP of sugarcane was at Rs. 275 per quintal. Since the Government has already increased the FRP of sugarcane by Rs. 10 per quintal for the current year, there is a need to increase the MSP of sugar to Rs. 34.50 per kg. after considering the increased FRP of sugarcane for 2020-21 SS. There is a need to quickly decide on increasing the MSP of sugar to ensure that sugar mills are able to pay farmers on time.