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According to information from a government source relayed to Reuters, India plans to increase the minimum selling price of sugarcane to sugar mills by 8% in the upcoming season starting on October 1, 2024. This decision is aimed at boosting sugar production in the world's second-largest sugar producer.
Every year, the federal government raises the Fair and Remunerative Price (FRP). Meanwhile, the state of Uttar Pradesh, the largest sugarcane producer in the country, usually sets an even higher price, taking into account the millions of sugarcane farmers who hold significant electoral influence.
As per the plans in New Delhi, the minimum price for sugarcane will be set at 340 rupees per 100 kg in the upcoming season, compared to the current 315 rupees for the basic quality with a recovery level of 10.25%.
A representative from the sugar industry in Mumbai notes that sugar prices have remained unchanged for several years. The proposed 8% increase is substantial, and sugar mills may not be able to pay such an amount unless sugar prices rise.
Typically, the government announces the minimum price a few months before the start of the crushing season, which begins in October. However, this year might be an exception, and the announcement could come earlier to appease farmers ahead of the upcoming general elections, said a sugar producer from the western state of Maharashtra.
Due to inadequate rainfall, sugar production in India this year may fall short of consumption levels for the first time in seven years. Reduction in planting areas may even lead the world's second-largest sugar producer to import sugar next year.
