Government may consider proposal to increase MSP of sugar

29-Jul-2024 03:41 PM

New Delhi. In view of the strong urge being made by the apex industry body - Indian Sugar and Bio-Energy Manufacturers Association as well as the National Federation of Cooperative Sugar Factories, the Central Government may consider the proposal to increase the ex-factory minimum selling price (MSP) of sugar in the next few days.

Industry organizations say that last time five years ago i.e. in the year 2019, the MSP of sugar was increased by Rs 200 from Rs 2900 per quintal to Rs 3100 per quintal. There has been no increase in it since then.

On the other hand, due to regular increase in the fair and remunerative price of sugarcane during this period, the cost of sugar production kept increasing continuously and now it has reached above Rs 4000 per quintal because along with sugarcane, other expenses have also increased.

However, the ex-mill price of sugar is currently running at Rs 3600-3700 per quintal as against the MSP of Rs 3100 per quintal, while the retail market price has reached a high of Rs 4400-4500 per quintal.

If the MSP is increased, it may have a psychological effect on the price of sugar and its price may increase. According to the Union Food Secretary, the demand for increasing the MSP of sugar may be considered in the next few days.

The scenario of sugarcane and sugar production for the marketing season 2024-25 (October-September) looks better and hence the supply and availability of sugar will remain smooth in the coming months.

The industry has adequate stock of sugar. However, the government has released a free sale quota of only 22 lakh tonnes of sugar for August 2024, which is 20 lakh tonnes less than the quota of 24 lakh tonnes in July.