Shrink in domestic Sugar price increase millers arrears
Weaken domestic Sugar prices coupled with the slower pace of exports are likely to increase the Sugarcane price arrears which have started mounting in Maharashtra and add to the simmering farm distress in the country.
The Sugar industry in the state has demanded a package of Rs 500 crore to clear the legally binding fair and remunerative price (FRP) payments for the ongoing 2018-19 crushing season.
With a production cost of Rs 34 per kg, mills from Maharashtra have been bearing losses of Rs 4 per kg, which has made it difficult to pay the FRP to farmers.
Maharashtra chief minister has already requested the Central government to increase the ex-mill minimum support price (MSP) of Sugar to Rs 31 per kg from Rs 29 per kg. To ensure that farmers get FRP for the cane.
As per the legal provision, which links MSP to the FRP, the present MSP of Sugar should increase by Rs 66 per quintal as the FRP has increased in 2018-19. Thus, the new MSP should be Rs 2,966 per quintal, which can be rounded off to Rs 3,000 per quintal.
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