In a significant move to provide relief to the sugar industry in the country, the National Federation of Cooperative Sugar Factories (NFCSF) wrote to the Union Ministry of Food and Consumer Affairs, in which it requested a 25% rise in the minimum selling price (MSP) of sugar. This move is intended to stabilise sugar prices and ensure the long-term sustainability of the sugar industry.
Letter to the Ministry urges to improve the stability of Sugar prices
In the letter addressed to Sanjeev Chopra, the Secretary of the Ministry, the Federation urged raising the MSP of sugar from Rs 3,100 to Rs 3,900 per quintal for the upcoming sugar season, which starts from 1 October. Prakash Naiknavare, Managing Director of the NFCSF, has stated that this change will benefit cooperative sugar mills and enhance the stability of sugar prices.
Furthermore, this letter highlights that the ex-factory price of sugar in the current sugar season (October to September) has varied from Rs 3,860 to Rs 3,940 per quintal, whereas the current MSP set by the Ministry is Rs 3,100 per quintal. The NFCSF stated that increasing the MSP will not affect inflation, asserting that, in light of these developments, it is essential to revise the MSP upward to accurately reflect the true production cost structure.
What was the industry’s estimate for sugar production for the upcoming year?
Interestingly, the industry is estimated to produce 35 million tonnes due to favourable monsoon conditions in Maharashtra and Karnataka for the upcoming sugar production year (2025-26). The Federation predicts 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 predicted around 31 million tonnes, including diversions for ethanol and export, which is lower than last year’s 34 million tonnes. Several estimates suggested that approximately 26.2 million tonnes of sugar will be available for domestic consumption.