The Food Ministry is evaluating a proposal to raise the Minimum Selling Price (MSP) of sugar, according to Food Minister Pralhad Joshi. MSP has been stuck at ₹31 per kg since February 2019. The Indian Sugar & Bio-Energy Manufacturers’ Association (ISMA) is pushing for an MSP hike to around ₹40+ per kg. ISMA argues that the fair and remunerative price (FRP) for sugarcane has increased significantly (to ₹355/quintal), raising production costs. A committee of secretaries is reviewing the MSP hike proposal.
The government has previously allowed exports of 15 lakh tonnes of sugar for the 2025–26 marketing year. Alongside sugar, there’s also consideration of raising ethanol prices. The National Federation of Cooperative Sugar Factories (NFCSF) has formally requested a 25% MSP hike (from ₹3,100 to ₹3,900 per quintal).
A higher MSP could help sugar mills stay profitable and pay farmers better. For consumers, raising MSP could lead to higher sugar prices — potentially affecting inflation. For the ethanol blending program, raising ethanol prices further supports the government’s push to blend more ethanol into petrol. There are macroeconomic concerns: higher MSP might contribute to inflation. The government needs to balance the industry’s demand, farmers’ welfare, and consumer impact.
