Sugar mills make a case for hike in minimum selling price

Sugar mills in Uttar Pradesh usually had a slightly higher realisation for sugar in the domestic market compared with the mills in Maharashtra. File
| Photo Credit: The Hindu

Sugar mills have sought hike in the minimum selling price (ex-mill) of sugar to ₹39 a kg from ₹31 a kg now.

Deepak Ballani, Director General of the Indian Sugar & Bio Energy Manufacturers Association (ISMA) told The Hindu that the retail price of sugar was almost flat for the last two years. However, the fair and remunerative price (FRP) paid to farmers and the conversion costs were on the rise. There was almost 11.5 % increase in the FRP in the last two years. The production cost was almost ₹41 a kg. Further, the price of ethanol was not revised for the supplies made by the sugar mills, he said.

The cane payment arrears to farmers by the sugar mills across the country as on February 6, 2025 for the current sugar season that started on October 1, 2024 were ₹13,850 crores. In Karnataka, only 66 % of the total amount payable to the farmers was paid while in Maharashtra, 84 % was paid (till February 6).

The government permitting export of 10 lakh tonnes of sugar had helped the mills, especially those in Maharashtra and Karnataka. The mills in Uttar Pradesh usually had a slightly higher realisation for sugar in the domestic market compared with the mills in Maharashtra.

Almost 75 % of the sugar sold in the domestic market was purchased by institutional buyers and the hike in the minimum selling price would not affect them, he said.