No increase in MSP of sugar has increased the difficulties of the industry

16-Jul-2024 04:45 PM

Pune. A leading industry body says that the Indian sugar industry is currently facing many problems and challenges and to overcome them, the government's policy support is needed.

The director of the National Federation of Cooperative Sugar Factories says that the Central Government has not increased the ex-factory minimum selling price (MSP) of sugar for the last five years, while during this period the fair and remunerative price (FRP) of sugarcane kept increasing regularly and other expenses also kept increasing. 

Sugar mills are also facing new challenges, which include narrow margins on working capital and increasing burden of debt. In fact, mills have a huge stock of sugar, while it cannot be sold more than a certain quantity.

There is a ban on commercial export of sugar, so millers have to sell their product only in the domestic market. For this, the government fixes a free sale quota of sugar for every mill every month.

Due to huge surplus stock of sugar, the capital of the mills gets stuck, due to which there is no success in paying the loan taken from banks and financial institutions and the interest charged on it on time.

According to the Federation, there is a need to increase the MSP of sugar in proportion to the increase in the FRP of sugarcane.

For the last five years, this is being demanded by all the provincial federations, but the government is not taking a positive stand on it.

This kind of policy is increasing the difficulty of the sugar industry. According to the director of the Federation, the indigenous industry is only demanding the cost price of sugar, which has now increased to Rs 4100 per quintal,

whereas the MSP of sugar is only Rs 3100 per quintal, which was fixed in the year 2019. The FRP of sugarcane has increased. Transportation costs have increased and the wages of workers have also increased. But the MSP of sugar remains stable.