Sugar MSP should be increased to Rs 45 per kg: Sanjay Khatal

With sugar production in Maharashtra seeing an uptick in the current season, Sanjay Khatal, MD, Maharashtra State Cooperative Sugar Factories Federation, Ltd, expects sugar production in the State for the current season to reach approximately 107.75 to 108.50 lakh tons. Speaking exclusively to Chinimandi, he said that to ensure the sugar industry maintains adequate liquidity for timely payments to cane farmers, government’s intervention is necessary. This includes raising the Minimum Selling Price (MSP) of sugar to Rs. 45 per kilogram (kg) in alignment with the increased FRP set at Rs. 340/- per quintal.

Q. At the start of the season, there was a feeling that Maharashtra would produce less sugar due to less rain. However, sugar production is higher than expected. According to you, what should be done to improve the accuracy of sugar production estimates, which is vital for policy consistency?

Ans– Sugarcane farmers should undergo Aadhar-based registration on a centralised portal managed by the Commissioner of Sugar Registration. This registration process should be mandatory and initiated by the farmers themselves, with confirmation from the corresponding sugar factories. Instances of farmers registering with multiple factories should be identified and addressed at the Commissioner of Sugar level. Regional meetings should then be convened involving the concerned factories and farmers to facilitate registration at a single location. This approach ensures streamlined registration, resolves area overlaps, and enhances real-time area coverage.

Q. Maharashtra has produced sugar to the tune of 107 lakh tons. What is the final expected production from Maharashtra? Do you think the Government will allow additional sugar to be diverted to produce ethanol?

Ans- We expect the current season to close with about 107.75 to 108.50 lakh tons of sugar production from the State. With higher sugar production in the State and expected higher sugar production in the country, we expect that there will be additional sugar diversion towards ethanol production in the current season.

Q. There are several sugar mills in Maharashtra with a high inventory of B Heavy molasses. Is the Association representing this to the Government requesting for allowing ethanol production from the B Heavy molasses?

Ans- We have already put in our needful efforts trying to make the Government see sense in allowing consumption of the available stocks of ethanol, RS and ENA derived both from juice/syrup to ethanol and ‘B’ Heavy to ethanol routes. In addition, we have also stressed the necessity to allow available molasses from the B Heavy molasses route to get converted into ethanol. In the absence of this entire stock to the extent of 700 crores plus goes unutilised, it will create problems of storage, hazards of fire and explosion, and above all unnecessarily block liquidity of sugar mills leading to FRP pendency.

Q. There are reports that many sugar mills have ethanol stocks which are not being lifted by the OMCs. How do you see this issue resolving soon? Are you in talks with the OMCs?

Ans– These are routine issues and can be dwelt by the sugar mills and OMCs once permission to permit diversion is taken by the Government of India. That is the important issue at hand. The Association is following up with OMCs.

Q. The Government has increased sugarcane FRP for next season. Do you think the sugar industry is capable of meeting the extra financial burden to pay cane price to the farmers? What are your key demands to the Government?

Ans- The higher sugarcane FRP having been declared by the Government shall have to be complied with. However, to support the industry in maintaining sufficient liquidity for timely payments to cane farmers, the government should take measures. This includes increasing the Minimum Selling Price (MSP) of sugar to Rs. 45 per kilogram given the raised FRP at Rs. 340 per quintal. Additionally, excess stocks of B Heavy molasses available with sugar mills should be allowed for conversion into ethanol. Furthermore, the government can explore the option of opening a short-term export window for 2 million tons of sugar without the need for export quota exchange policy between mills.

Cooperative banks should also refrain from unnecessary devaluation of sugar stocks to prevent downward pressure on prices.

Q. Green Hydrogen is a topic of immense importance now. What role is your Association playing in motivating your member factories to produce Green Hydrogen in the future? Any roadmap that you can discuss?

Ans. Our sister organisation, Cogen India, is organising business meetings across various States to emphasise the importance of considering this aspect for sugar mills. However, the adoption of affordable and efficient technology remains a significant challenge.


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