ISMA demands hike in minimum selling price of sugar to Rs 35/kg after rise in FRP

New Delhi, Industry body ISMA on Wednesday said the Rs 5 per quintal hike in the fair and remunerative price of sugarcane will not overburden millers, but demanded an increase in the minimum selling price of sugar to Rs 34.5-35 per kg from the current Rs 31 per kg to boost the liquidity of the millers.

Earlier in the day, the government had announced to increase the sugarcane FRP by Rs 5 per quintal to Rs 290 per quintal to boost the income of about 5 crore cane growers.

In a statement, Indian Sugar Mills Association (ISMA) Director General Abinash Verma said the sugar industry would not feel overburdened with the government’s decision to increase sugarcane FRP for 2021-22 marketing year by Rs 5/quintal to Rs 290/quintal.

“The current decision to increase the FRP for 2021-22 by 1.75 per cent seems quite reasonable. It is not a major increase, as compared to the past when the government had in a couple of years increased cane FRP by Rs 25 to Rs 40/quintal of the cane,” he added.

With the increase in the FRP, Verma said, the industry will expect that the government would also increase the minimum selling price (MSP) of sugar to help millers accommodate the higher cane price payment to farmers in the current as also the next season.

“MSP of sugar has remained static for over 30 months, even though the cane FRP was increased by Rs 10/quintal in 2020-21,” he said.

He further said the Group of Ministers, Niti Aayog, Committee of Secretaries and several state governments had asked for an increase in MSP of sugar between March and July 2020 last year.

“…we hope that the government will pay heed to these recommendations and increase the MSP of sugar to Rs 34.50-35/kilo. That MSP will be adequate then to cover the increase in cane FRP and the cost of producing the sugar,” the ISMA DG said.

The association further said the all-India average ex-mill sugar price is prevailing currently at around Rs 35/kg, and therefore, the increase in sugar MSP to Rs 34.50-35/kg will not have any impact on the sugar price and certainly not lead to any inflation. PTI