ISMA opposes government request for aid to sugar industry

Indian Sugar Mill Association (ISMA) opposed the central government’s claim that government assistance to industry through various programs, including the ethanol program, helps industry to compensate for the fall in sugar prices.

ISMA, in a letter to the Prime Minister’s Office, opposed a statement by the Minister of Consumer, Food and Public Distribution that since the government is helping the sugar industry through through various other programs, there may not be an immediate need to increase the minimum asking price (MSP).

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In the letter, ISMA President Niraj Shirgaokar said: “It is extremely important to note that around 80% (or even more in some cases) of the total turnover of a sugar factory or a company comes only from sugar, and that by- products like electricity, ethanol, etc. contribute 15 to 20 percent of total income. Therefore, this understanding that government aid in other aspects, including ethanol, is sufficient to offset falling sugar prices, is not correct ”.

PRF increase

Last month, the Cabinet Committee on Economic Affairs approved the Fair and Remunerative Price (FRP) of sugarcane for the 2021-22 sugar season (October – September) at 290 / – per cwt for a recovery rate base of 10%.

Ex-factory prices, which hovered around 31-32 per kilo from October 2020 to July 2021, improved slightly in August 2021 and are currently around 35 per kilo (due to festival season). ISMA said it believes that if the MSP of sugar is increased to ₹ 34-35 per kilogram, following the increase in the PRF of sugar cane, there should be no impact on food or l general inflation due to the increase in the MSP of sugar. . Indeed, the MSP of sugar requested by the industry and various institutions and authorities is lower than the current ex-factory prices in force in the country.

“We hope and pray that you take an immediate decision to increase the MSP of sugar to 35 per kilo, and save the sugar mills from the problem of lack of liquidity and the problem resulting from the high price arrears of cane again. over the next season. ”Shirgaokar said.

Rachel J. Bradford