Government Weighs Industry Demands

The Indian government is considering raising the sugar's minimum selling price. This has remained at USD 0,373 per kg since February 2019. Food and Consumer Affairs Minister Piyush Goyal recently acknowledged the industry's request for a price increase, stating that a decision would be announced soon.

If the price is increased, sugar prices in the market are expected to rise, potentially impacting consumers. However, industry representatives argue that higher prices are essential to cover rising production costs and ensure the financial stability of sugar mills.

Industry Proposals for a Higher Price

Key organizations, including the Indian Sugar Mills Association (ISMA) and the National Cooperative Sugar Factories Federation (NFCSF), have proposed increasing the price to USD 0,475 per kg or even USD 0,506 per kg. They believe this adjustment is necessary to reflect actual production costs and stabilize the financial position of sugar mills.

Decline in Sugar Production Adds Pressure

India’s sugar production has declined significantly, adding urgency to the demand for a higher price. According to ISMA, sugar output during the first quarter of the current marketing year (starting October) dropped from 11,3 million tonnes last year to 9,54 million tonnes, a reduction of 1,76 million tonnes.

The decline is attributed to lower production in Maharashtra, a major sugar-producing state, which faced disruptions due to heavy rains. Additionally, the number of operational sugar mills has decreased from 512 last year to 493 this season, further straining production capacity.

Conclusion

The central government’s decision on sugar prices will have far-reaching effects. While it could stabilize sugar mills grappling with rising costs, consumers may face higher prices. With sugar production already under pressure, the industry eagerly awaits the government’s announcement to ensure long-term sustainability.





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