Commodity News

Centre Hikes MSP of Sugar by Rs 2 per Kg

sugar

Worried that the increasing sugarcane arrears could hit its electoral prospects in politically-important States of Maharashtra and Uttar Pradesh, the Government on 14th February has decided to hike the minimum selling price (MSP) of sugar by Rs. 2 per kilogram to Rs. 31.

Ram Vilas Paswan, Food and Public distribution Minister in a press conference said, “We have hiked the minimum selling price of sugar from the previous Rs. 29 per kg to Rs. 31 per kg. The move will help sugar mills to pay dues to the cane growers”.

It is important to mention that the Sugar mills had to pay around Rs. 20,000 crore to the cane farmers till the end of January. In addition, MSP is the cost below which the mills are not authorized to sell sugar in the open market to wholesalers as well as bulk consumers such as beverage and biscuit makers.

The announcement comes following demands from the industry and representation made by the NCP head and former Agriculture Minister, Shri Sharad Pawar to PM Shri Narendra Modi.

sugar mills

In the past few years, the Centre has taken various measures to help cash-starved sugar mills pay the cane dues. And these include rise in import duty on sugar to 100 %, formation of buffer stock, scrapping of export duty and funding for mandatory export of 5 million tonnes in the marketing year 2018-19.

The government is also providing loans at subsidised interest rates for establishment of ethanol capacity.

As per the Indian Sugar Mills Association (ISMA), sugar output in the current sugar season that will end this September, is calculated to be 30.7 million tonnes. It also said that sugar production increased 8 % to 185 lakh tonnes in the 1st four months of the current marketing year that will end in September.



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