AISTA Urges Govt to Increase MSP as Sugar Prices Dip Below Production Costs

The sugar trade association AISTA demanded on Wednesday that the government raise the minimum selling price of sugar since the sweetener is being sold at prices lower than the country's cost of production.

Even if the fair and remunerative price (FRP) of sugarcane has climbed every year, the minimum selling price of sugar has remained constant at Rs 3,100 per quintal since 2019. The All India Sugar Trade Association (AISTA) has submitted a representation to Food Secretary Sanjeev Chopra in this regard.

"Sugar was sold as low as Rs 3,100-3,200 per quintal in Maharashtra and Karnataka during the current 2022-23 season, which is 10% less than the cost of production," said AISTA Chairman Praful Vithalani. According to him, the minimum selling price should be higher than the cost of manufacturing, which ranges from Rs 3,400 to Rs 3,600 per quintal.

According to the representation, the government raised the FRP of sugarcane in the last four sugar seasons (October-September), but there was no commensurate increase in the minimum selling price. "As a result, the government may consider raising the minimum selling price of sugar, which will also encourage farmers to expand sugarcane plantation in the country," the report stated.

Aside from that, the trade group has pushed the government to extend the RODTEP (Remission of Duties and Taxes on Export Products) plan to sugar. RODTEP remits duties and taxes at a predetermined rate on export products in the 'free category' alone. Because sugar was kept in the 'restricted' category, traders are not now benefiting.

According to AISTA, the benefits should be extended because sugar was placed in the 'restricted category' not because of a shortage, but to regulate exports. "The RODTEP benefits to sugar should not be withdrawn for technical reasons," it stated. After Brazil, India is the world's second largest producer of sugar. The government has approved 6 million tonnes of exports for the current 2022-23 season.