NEW DELHI: The National Federation of Cooperative Sugar Factories (NFCSF) has written to the Union Ministry of Food and Consumer Affairs, requesting a 25% increase in the minimum selling price (MSP) of sugar.
The move is aimed at stabilising sugar prices and ensuring the long-term sustainability of the sugar industry.
In the letter addressed to Sanjeev Chopra, the Secretary of the Ministry, the Federation proposed raising the MSP of sugar from Rs 3,100 to Rs 3,900 per quintal for the upcoming sugar season, which begins on 1 October.
Prakash Naiknavare, Managing Director of the NFCSF, stated in the letter, “This change will not affect inflation. Instead, it will benefit cooperative sugar mills and enhance price stability.”
The letter notes that the ex-factory price of sugar in the current sugar season (October to September) has ranged from Rs 3,860 to Rs 3,940 per quintal, while the current MSP set by the Ministry is Rs 3,100 per quintal.
The NFCSF argues that increasing the MSP will not impact inflation, asserting that “in light of these developments, it is imperative to revise the MSP upward to accurately reflect the true production cost structure.”
The letter further explains, “Such a revision will not affect consumer prices, as the market rates are already aligned within this range. Additionally, it will provide statutory support to the prevailing ex-mills prices, thereby promoting stability in the sector.” It also mentions that the current market-accepted retail price does not influence the inflation index.
For the upcoming sugar production year (2025-26), the industry is estimated to produce 35 million tonnes due to favourable monsoon conditions in Maharashtra and Karnataka.
The Federation anticipates that 4.5 million tonnes of sugar will be diverted for ethanol production and 2 million tonnes for export.
However, this year’s total sugar production is estimated at around 31 million tonnes, including diversions for ethanol and export, which is lower than the previous year’s 34 million tonnes.
Various estimates indicate that approximately 26.2 million tonnes of sugar will be available for domestic consumption.
The reduction in sugar availability is attributed to unseasonal rainfall and pest attacks in the sugar belt.