Sugar Price: Sugarcane farmers in Karnataka and Maharashtra are protesting against the proposed rise in sugarcane prices. In response, the government has established a high-level four-member committee, led by former NITI Aayog member Ramesh Chand, to examine the farmers’ concerns. After meeting with farmers in Bengaluru, the committee held a significant session in Pune, Maharashtra. During this meeting, a delegation from AISTA also submitted its demands to the committee.
Will Sugar Become More Expensive?
AISTA Chairman Praful Vithalani called for the minimum selling price of a quintal of sugar to be increased from the current Rs 3,100 to at least Rs 4,200. Vithalani pointed out that the minimum selling price has not been adjusted even once since February 2019, spanning the past seven years. Mill owners contend that with the sharp rise in electricity, labour, and maintenance costs, selling sugar below production costs results in losses for the mills.
The organisation expressed approval of the government’s support price for sugarcane farmers. The central government has set the Fair and Remunerative Price (FRP) for sugarcane at Rs 365 per quintal for the 2026-27 season, based on a base recovery rate of 10.25 per cent. The association claims that Indian farmers already receive considerably higher prices than those in other leading sugarcane-producing countries.
Dozens of sugar mills nationwide have constructed distillery plants by securing substantial loans worth thousands of crores of rupees from banks to meet the government’s National Ethanol Mission. However, due to unpredictable weather and unseasonal rainfall, the excess sucrose content in sugarcane is expected to decline. This reduction in sucrose will directly lead to a significant drop in ethanol production, potentially freezing the mills’ revenues that were intended to cover their bank loan repayments.
The sugar industry has now presented an additional demand to the government. AISTA has requested that mills unable to meet their EMIs for ethanol projects amid the current crisis be granted an immediate two-year moratorium. This would mean that for the next two years, mills would neither have to repay the principal nor incur interest liabilities on their bank loans.
The association has also urged the government to increase its subsidy support. Currently, there is a 50 per cent interest subsidy on these projects, but they have called for this to be raised to 100 per cent. Industry representatives warn that without the government assuming the full interest burden, the mills will be driven into debt.
The decision now lies with the central government on whether to address the industrialists’ crisis or safeguard the interests of ordinary consumers. On one side, the Rs 11 per kg increase in MSP is viewed as essential to prevent sugar mills from incurring massive losses, debt, and NPAs. On the other, if this demand is met, everyday items like tea, sweets, and biscuits in the common household are likely to become unaffordable.