New Delhi: Sugar mills claim they are finding it difficult to pay Fair and Remunerative Price (FRP) of sugarcane as the average production cost of sugar is 35 to 36 rupees per kg as against the minimum selling price of 31 rupees per kg, and due to which they are bearing looses.
According to the reports, the Commission for Agricultural Costs and Prices has recommended keeping the FRP unchanged at Rs 27,500 per tonne for 2019-20 season.
The government in July 2018 hiked FRP for sugarcane by Rs 20/ quintal to Rs 275 per quintal.
The sugar mills feel if the government increases FRP this time too, then it will add burden on them as there is a mismatch between the production cost and sale price of sugar.
As per the latest report, Sugar mills in India owe whopping Rs 18,958 crore as on June 18. The government had introduced various measures, including a soft loan scheme, hike in the minimum selling price of sugar and others to help sugar mills clear mounting cane arrears. But, millers failed to clear it, citing surplus sugar and depressed sugar prices.