Govt Considers Raising Sugar MSP And Ethanol Prices

The minister also said that a committee of secretaries is currently discussing a proposal to raise the minimum selling price of sugar, which has been fixed at Rs 31 per kg since February 2019

Union Minister of Consumer Affairs, Food and Public Distribution Pralhad Joshi said on Thursday that the government is exploring the possibility of raising ethanol prices, increasing the minimum selling price (MSP) of sugar, and reviewing the sugar export policy for the upcoming 2024-25 season.

”The petroleum ministry is seized of the matter. We are in touch with the petroleum ministry. It is well under consideration to hike the ethanol price,” Joshi told the news agency PTI. Regarding sugar exports, Joshi said, ”We will take a decision after looking into next year’s production and availability of sugar.” 

The minister also stated that a committee of secretaries is currently discussing a proposal to raise the minimum selling price of sugar, which has been fixed at Rs 31 per kg since February 2019.

Joshi expressed optimism about sugar production for the upcoming 2024-25 season, which begins in October, citing favourable monsoon conditions. He noted that ethanol prices, determined by the government, have remained unchanged since the 2022-23 supply year (November-October). Currently, ethanol prices are set at Rs 65.61 per litre for cane juice, Rs 60.73 for B-Heavy molasses, and Rs 56.28 for C-Heavy molasses. The food minister stressed that introducing the minimum selling price (MSP) for sugar in 2018 has significantly alleviated cane dues for farmers, with approximately 99 per cent of the total Rs 1.14 lakh crore paid out.

Joshi noted that India’s sugarcane cultivation area has expanded by 18 per cent over the past decade, reaching 6 million hectares, while production has surged by 40 per cent to 491 million tonnes. 

ISMA has projected a gross sugar output of 33.9 million tonnes for the 2024-25 season (October- September), anticipating an upward revision based on the positive monsoon effects.

With an estimated diversion of 4 to 4.5 million tonnes for ethanol production and a closing stock of 8.3 million tonnes, approximately 2 million tonnes will be available for exports in the 2024-25 season. "Exports should be permitted immediately, as global prices have strengthened over the past two weeks due to reports of a potential decline in Brazil's crop. This presents an opportunity for us to reclaim our lost market," said ISMA Vice President Gautam Goel.