Isma, the sugar mills’ organization, again called on the government to raise the minimum sale price of sugar once again on Monday. ISMA says this will help sugar mills to pay sugarcane arrears to farmers. The organization says that the price of sugar is relatively low and due to this the cash problem of mills has increased. According to government data, the cane arrears as of February were Rs 22,900 crore in the 2020-21 marketing season (October-September), which is more than Rs 19,200 crore in the 2019-20 season.
The minimum sale price (MSP) of sugar was last fixed in February 2019. However, a task force constituted by the NITI Aayog on sugarcane and sugar industry has recommended a lump sum increase of Rs 2 per kg. The MSP of sugar is fixed taking into account the fair and remunerative price (FRP) components and the minimum conversion cost of the most efficient mills.
Ex-mill prices of sugar Rs 31-33 per kg
The Indian Sugar Mill Association (ISMA) said in a statement, “Ex-mill prices of sugar have been in the range of Rs 31-33 per kg for the past several months. To maintain the level of cash, there is pressure on mills to sell sugar at such low prices, that such a cube cannot be created to pay the entire fair and remunerative price (FRP) of the sugarcane farmers.
In June last year, Food Secretary Sudhanshu Pandey said that the government was considering a proposal to increase the MSP of sugar from the current level. However, no formal announcement has been made yet. According to ISMA, sugarcane farmers and sugar mills are expected to make the much-awaited announcement by the government regarding the increase in MSP of sugar to improve the income of sugar mills and pay farmers.
Sales of one crore 52.6 lakh tonnes of sugar in domestic market till April
It said, “In the current circumstances, raising the current level of sugar to Rs 31 per kg in MSP … seems to be the only realistic way to ensure that sugar mills can improve their cash flow situation and farmers’ Cane price arrears can be reduced quickly and effectively. It said that sugar mills have sold one crore 52.6 lakh tonnes of sugar in the domestic market till April in the current 2020-21 marketing season (October-September), while the government has set a quota of 14.47 million tonnes.
In terms of exports, ISMA said that the sugar mills have so far contracted to export 57 lakh tonnes of sugar, which is 95 per cent of the export target set by the government for the current season at 6 million tonnes. Out of this, 37 lakh tonnes of sugar have been physically exported out of the country during the January-April period of the current season.
It has also been reported that 7-8 lakh tonnes of sugar is in the process of being exported physically this month. Regarding the sugar production, ISMA said that sugar mills across the country have started the ongoing marketing season 2020-21. In May, 30 million 3.6 lakh tonnes of sugar has been produced till May 15, which is 14.43 percent more than two crore 65.3 lakh tonnes in the same period a year ago.