Sugar technologists seek hike in MSP to Rs 3,600/quintal

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Published: April 19, 2019 12:34:25 AM

The Sugar Technologists Association of India ( STAI) has suggested that the government should set the minimum support price (MSP) for the sweetener to Rs 3,600 per quintal from Rs 3,100 per quintal to help millers overcome the financial crisis.

Sugar technologists seek hike in MSP to Rs 3,600/quintalSugar technologists seek hike in MSP to Rs 3,600/quintal

The Sugar Technologists Association of India ( STAI) has suggested that the government should set the minimum support price (MSP) for the sweetener to Rs 3,600 per quintal from Rs 3,100 per quintal to help millers overcome the financial crisis.

“I think if the government sets the MSP to `3,600, the industry would be able to overcome most of its hurdles. When the maximum retail prices of `42-`44 were digestible to the government as well as the consumers a few years ago, a hike in MSP would not harm any consumer,” he said. The reasoning being a family of four people would not consume more than 2-3 kg of sugar in a month, and therefore, paying a little extra would not hurt them much, he said.

At the same time, the extra money would help millers pay cane arrears to farmers and ease the financial crunch that they currently find themselves in.

Sugar millers across the country owe farmers over `20,000 crore in arrears with `5000 crore owed by mills in Maharashtra alone and the rest are those from Uttar Pradesh and other states. Sugar has been lying unsold with millers as a result of which they cannot pay farmers, he said.

The National Federation of Cooperative Sugar Millers and the Maharashtra Federation of Cooperative Sugar Millers have been seeking a hike in MSP of sugar.

Increasing the monthly sales quota has also not helped. For March, the sales quota was fixed at 24.5 lakh tonne, up 17% over the level in February forcing millers to sell the sweetener on credit, if not at a discount from the government-set minimum ex-mill sugar price, to the traders.

Awasthi felt that the government should encourage exports so that there is more liquidity. Piling inventory would not be in the interests of the sector, he added.The country’s millers have signed deals for some 27 lakh tonne sugar and some 17 lakh tonne have been shipped so far. In addition to increasing the MSP of sugar, Awasthi said that the government should also increase ethanol prices so that more mills diversify cane into production of ethanol.
“Sugar factories which have distilleries with ethanol facilities should partially divert juice for ethanol as the ethanol price is `59.70/litre and use the balance for sugar production. Sugar production will also give molasses to run a distillery 150 days with molasses and 150 days with cane juice. This will reduce sugar production and sugar prices will also improve thus resulting in balance in the demand- supply situation.

At present, the ethanol blending achieved is to the tune of 3.5% to 3.6% and we are hopeful of touching the 5% mark this year, Awasthi said. The central government has the vision to achieve 20% ethanol blending with petrol in a decade and therefore incentivising ethanol would help more industries turn towards ethanol production. The industry should create infrastructure to produce ethanol both from B-heavy and sugar cane juice on a regular basis, he said.

This season, the sugar production of the country has surpassed Brazil’s sugar production and India has become the world’s largest producer of sugar with a record production of 325-330 lakh tonne against the consumption of 260 lakh tonne.

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