The ISMA has asked for alignment of MSP of sugar and ethanol procurement prices with the FRP of sugarcane. In a November 2024 note, the National Federation of Co‑operative Sugar Factories (NFCSF) calculated the cost of production of sugar at around ₹ 41.66 per kg while MSP remained ₹ 31/kg — a gap of roughly ₹ 10.66/kg. Some industry voices have demanded a rise in sugar MSP to ₹ 39‑40 per kg. On ethanol, while the price for ethanol from C‑heavy molasses was raised to ₹ 57.97 per litre for the 2024‑25 supply year, ethanol from B‑heavy molasses and from sugarcane juice have not been revised since November 2022.
The government (via the Food Ministry, Petroleum Ministry and CACP) has a proposal under consideration to raise the MSP of sugar and revise ethanol procurement prices. Timing is critical: any decision ideally needs to be announced before the new crushing season (which typically begins in October) to give mills and farmers clarity. The policy decision will also have to consider: domestic sugar production forecasts, carry‑forward stocks, demand/supply balance, export potential, international sugar prices, and ethanol blending targets. Once announced, such a hike will likely trigger adjustments across the value chain: sugar mill pricing, farmer‐cane procurement, ethanol producers, blending obligations, and perhaps consumer sugar pricing.
The sugar and ethanol industry in India is under pressure due to rising costs, stagnant minimum selling/ethanol prices and increasing cane prices. Industry bodies have formally demanded a raise in MSP of sugar and the procurement prices of ethanol to ensure viability. The government has acknowledged the demand and is considering action. The decision will be important for sugar mills, cane farmers, the ethanol blending programme and overall agroeconomic stability.
