New Delhi: The government is expected to raise the minimum selling price (MSP) of sugar - after a nearly seven-year pause -by nearly 23% to ₹38 per kg, said people aware of the matter.
The Centre could also increase ethanol procurement price for sugarcane-based feedstock, the people said.
The steps would follow the Centre clearing the export of 1.5 million tonnes of sugar for the 2025-26 season (October-September).
The government has maintained the MSP of sugar at ₹31 per kg since February 2019. The industry has been pushing for an increase in the price, citing higher production costs. An increase in MSP will boost liquidity for sugar mills, helping them pay cane farmers.
"In accordance with Section 9 of the Sugar (Control) Order, 2025, and considering the 4.42% increase in FRP (Fair and Remunerative Price) along with the rise in inflation-linked input costs, revision of the Sugar MSP to ₹41 per kg is both justified and logical," the National Federation of Co-operative Sugar Factories said in a letter to union minister for food and public distribution Pralhad Joshi.
Status quo on ethanol prices adversely affects the ability of mills to meet cane payment obligations, especially when FRP and other input costs are continuing to rise, the industry body said, in the letter.
Ethanol revenues contribute more than 20% of the total cane price payable to farmers. Prices for ethanol produced from B-heavy molasses and sugarcane juice or syrup have remained unchanged since ESY /add full form/ 2022-23
