Fix Minimum Selling Price for Sugar

The government of India fixes the FRP i.e. Fair and Remunerative Price (in other words, Statutory Minimum Price) for sugar cane, the raw material for sugar. Good, but why is the rate of product, that of sugar, left at the mercy of market forces. The sugar mills are suffering a heavy loss due to this uneven policy. The price of cane floats between Rs. 2500 per MT to Rs. 2800 per MT. Looking at an average of 10% recovery of sugar, one MT of cane is converted into one quintal of sugar which, at today's price, fetches the sugar mill only Rs. 2700-2800. With this statistics, how can a sugar mill survive, as the sugar mill has to cater for many other expenses too?

Hence, the government must fix the minimum selling price of sugar too. This may enhance the sugar price a little, but would give huge relief to sugar industry. And increase of even 5 rupees a Kg will make a family to pay Rs. 25 more or so only per month on sugar consumption. The media may make a hue and cry, but ultimately this kind of decision shall be in favour of a type of industry, which takes care of crores of employment in unorganized sector and in organized sector, apart from being instrumental in giving GoI huge revenue in terms of Central Excise Duty.

Indian sugar industry produces an approximate quantity of 250 lakh MT per year, or 2500 lakh quintal. Looking at the rate of Central Excise Duty on sugar (approximately Rs. 100 per quintal), this works out Rs. 100 X 2500 X 100000 = Rs. 25,00,00,00,000, i.e Rs. 2500 crore. Whopping sum. And remember, we are not considering the Central Excise Duty, the GoI obtains form sugar mills on sale of molasses.