Key Points

New Delhi [India], September 25 (ANI): The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) has urged the government to revise the Minimum Selling Price (MSP) of sugar to at least Rs 40.2 per kilogram, around Rs 9 up from the current level for the 2025-26 sugar season, Deepak Ballani, Director General of ISMA, said in a statement.

"The MSP of sugar has remained unchanged at Rs 31/kg since February 2019, even as the FRP of sugarcane has been revised upward each year, creating a widening gap between input costs and output pricing," he said adding that thus, the MSP of sugar must also be aligned automatically with sugarcane FRP to sustain mills and secure the timely payment to farmers.

ISMA's request is based on the increasing cost of sugarcane, the primary raw material, and a significant decrease in the sugar recovery rate, which together have raised the cost of sugar production. An increased MSP aims to help mills recover their costs and ensure the timely payment of cane dues to farmers, thereby stabilising the sugar sector.

The FRP for sugarcane has increased by 29% since the 2018-19 season, reaching Rs 355 per quintal for the 2025-26 season. However, the MSP of sugar has not seen any revision in this period. Based on mill data, the cost of sugar production at the current FRP is approximately Rs 40.2 per kilogram, making the existing MSP grossly inadequate.

ISMA warns that without an MSP revision and the non-revision of ethanol prices despite mills investing over Rs 40,000 crores in ethanol capacities, mills will face severe financial strain. This situation threatens their viability and could delay payments to farmers, destabilising the sector.

To address this, ISMA has recommended instituting an automatic linkage mechanism between the FRP of sugarcane and the MSP of sugar to ensure timely adjustments and prevent future mismatches. According to the association, this is essential to protect farmer incomes, support mill operations, and maintain industry stability.

The sugar production is likely to be around 34.90 million tonnes in 2025-26, ISMA said earlier. This is backed by improved yield in Maharashtra, Karnataka, Uttar Pradesh, and Tamil Nadu.

It signals stability in sugar output expectations despite regional variations. The industry body will reassess crop conditions in October 2025 and release its first advance estimate in October/November 2025.

Total exports of the sweetener are expected to be around 2 million tonnes this year, up from 0.8 million tonnes last year. A rise in exports is expected due to a likely bumper crop and a surplus in domestic sugar stocks.

- ANI