Sugar ex-mill prices remain under pressure, millers urgently seek hike in MSP

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Sugar prices are under pressure over higher estimated sugar production in the current sugar season and lack of demand for a couple of weeks. According to market reports, the demand has been quite scanty with the on-going winters which has reduced the demand for soft drinks, cold beverages, ice-creams etc.

Sugar millers have been struggling to sell the allocated monthly quota for the month of January 2021. The ex-mill sugar prices are under pressure in almost all the States. Therefore, millers expect a lesser quota for the month of February 2021. Furthermore, market sources claim that sugar prices in Maharashtra have also slid down below the Minimum Selling Price (MSP) of sugar.

In Maharashtra: S/30 Sugar rates from millers are ₹3100 to ₹3150/Qntl. whereas M/30 ₹3180 to 3250. In the resale market S/30 is trading at ₹2950 to ₹3100 whereas M/30 is trading at ₹3000 to ₹3150
South Karnataka: The rates for S/30 at ₹3075 to 3100 whereas, M/30 rates are ₹3100 to 3150.
Uttar Pradesh: The rates for M/30 are ₹3215
In Gujarat: The rates for S/30 and new M/30 are prevailing at ₹3101
Tamil Nadu: S/30 Sugar rates are ₹3140 to 3200 whereas, M/30 rates are 3200 to 3250
(All the above rates are excluding GST)

Millers claim that the lack of demand has led them to a stressful situation. Also, the Fair and Remunerative Price (FRP) of sugarcane has been hiked by ₹100/tonne to ₹2850/Quintal (for a basic sugar recovery rate of 10 per cent) however it is difficult for us to pay the new FRP at the current MSP of ₹3100/Quintal. To ensure that sugar mills are able to pay farmers on time, industry stakeholders have been seeking an increase in the MSP of sugar from
₹3100/Quintal to ₹3300/Quintal to ₹3500/Quintal.

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