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ISMA : A Minimum ex-mill Sale Price of Sugar at Rs.29 per Kilo

Chander Mohan
Chander Mohan

ISMA welcomes the Cabinet’s decisions to help the sugar mills and cane farmers. The decision to fix a minimum ex-mill sale price of sugar at Rs.29 per kilo will improve ex-mill prices from current levels of around Rs. 28 per kilo, but may not impact the retail prices in any significant way. 

However, the proposed minimum price of Rs. 29 per kilo is not enough to cover the cost of sugarcane at FRP of Rs.290 per quintal at the current all India average recovery of 10.8 percent . The ex-mill sugar price which supports the current FRP works out to around Rs.35 per kilo and therefore the Rs.29 is inadequate. It will, therefore, be a challenge to expect the sugar industry to clear the huge cane price arrears on this basis.

The other step of providing subsidized loans for ethanol production capacity is an excellent move. It will encourage setting up of more distilleries in the country over the next 3 years and will help in diverting some of the surplus sugarcane into ethanol and reduce surplus sugar in the long run.

However the decision to impose stock holding limits on sugar mills tantamounts to controls on sugar sales which is not the right way to move into the future. Creation of buffer stocks of 30 lakh tons will reduce some surplus sugar from the market, though only for a year, and will improve market sentiments to support domestic prices.

What is concerning is that there is no idea or proposal on rationalization of cane pricing policy, which is actually the main reason for all the problems of the industry today.

ISMA is the oldest industrial Association in the country which was established in 1932 when tariff protection was granted to the industry. It is recognised by both the Central and State Governments, as the central apex organisation to voice the cause of the sugar industry in the country. Sugar mills in both the private sector and public sector are eligible to become members of ISMA. Its total strength of membership as on date stands above 200. ISMA’s history is synonymous with the growth of the sugar industry in India which also began in the early 1930s.

India entered the sugar export market for the first time in the year 1957 which was entirely on the initiative of ISMA. ISMA itself then undertook export of sugar as the export agency of the Government for which a separate wing was started.

ISMA maintains close contacts with all regions in India through a network of regional (Affiliated Members) Associations and with international organizations and Associations through international bodies. ISMA is the interface between the industry and Government on matters relating to sugar policy, statistics, sugar price movement etc. 

ISMA maintains a database for the sugar industry which is shared with all the member factories, media and also various Government organizations. The Association publishes a monthly journal, 'Indian Sugar', as well as yearly publications called Indian Sugar Year Book- Vol 1 & Vol II, List of sugar mills in India, Handbook of Sugar Statistics, giving all relevant information about each sugar factory is also published. A statistical handbook is also prepared every year on production, prices, sales, exports/imports etc. All these publications are also digitally available these days.

The office of the Association functions through its Committee and various Sub-committees on specific important issues. Special departments have also been created to provide guidance and help to the members on important topics.

The organization has a vibrant R&D Cell, it added yet another coveted feather on its cap by successfully executing satellite mapping of sugarcane areas in the country.

ISMA maintains a close network with several International industry Associations including International Sugar Organization, World Sugar Research Organization etc.

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