Request to increase MSP of sugar due to increase in FRP of sugarcane

05-May-2025 08:34 PM

New Delhi. The Central Government has fixed the Fair and Remunerative Price (FRP) of sugarcane for the marketing season 2025-26 (October-September) at Rs 355 per quintal based on an average recovery rate of 10.25 percent sugar.

This is an increase of Rs 15 or 4 percent over the current season's FRP of Rs 340 per quintal for 2024-25. This move will directly benefit over five and a half crore sugarcane farmers.

However, this increase in FRP will raise the cost of sugar production and reduce the profit margins of sugar mills. While the present situation remains favorable for the sugar industry, there is concern about potential challenges in the future.

In light of this, the domestic sugar industry has urged the government to raise the ex-factory minimum selling price (MSP) of sugar in proportion to the increase in the FRP of sugarcane.

Notably, the MSP of sugar has not been increased for the past five years. The last revision was in February 2019 when it was raised from Rs 2900 to Rs 3100 per quintal.

Industry analysts believe that the MSP of sugar should be adjusted in line with the rising cost of sugarcane to prevent financial strain on sugar mills and to ensure timely payments to sugarcane farmers. Although the government had initially agreed in principle to raise the sugar MSP, the decision was later postponed.

In the current 2024-25 marketing season, domestic sugar production is expected to fall by around 60 lakh tonnes to approximately 260 lakh tonnes.

This decline will considerably reduce surplus stocks for the upcoming season. As a result, sugar prices are expected to remain firm in the coming months.