Sugar Industry Urges Government to Hike Sugar MSP Following FRP Increase

02-May-2025 08:38 PM

New Delhi. The domestic sugar industry has welcomed the recent increase in the Fair and Remunerative Price (FRP) of sugarcane by the Central Government but has strongly urged a corresponding rise in the Minimum Selling Price (MSP) of sugar, which has remained unchanged since 2019.

Effective for the 2025–26 marketing season, the FRP of sugarcane has been raised by ₹15, from ₹340 to ₹355 per quintal, based on a 10.25% sugar recovery rate.

While this move is expected to benefit nearly 5.5 crore sugarcane farmers, bringing in ₹20,000 crore in additional income, it also leads to a higher cost of sugar production, putting pressure on sugar mills already struggling with stagnant MSP levels.

Industry analysts highlighted that while the MSP of sugar has remained at ₹3,100 per quintal since February 2019, the cost of sugarcane continues to rise annually, widening the gap between input costs and selling prices.

This imbalance has created serious financial stress for sugar mills, many of which are already operating on thin margins.

Notably, in five key sugar-producing states—including Uttar Pradesh—farmers also benefit from the State Advised Price (SAP), which is often higher than the FRP, further adding to the mills’ payment burden.

The industry now seeks urgent intervention from the government to revise the MSP of sugar in line with the FRP hike, to ensure financial sustainability for sugar producers and avoid disruptions in payments to farmers.