Minimum Selling Price of Sugar Increased by Rs 2/kg

The Central government has increased the minimum selling price (MSP) of sugar by Rs. 2 per kg to Rs. 31.

Minimum Selling Price

Minimum Selling Price is the rate below which the mills cannot sell sugar in the open market to wholesalers and bulk consumers like beverage and biscuit makers.

Rationale behind the Increase

The decision to increase the minimum selling price has been taken keeping in mind the debt burden of the industry. As per the data provided by the Indian Sugar Mills Association, arrears of sugarcane farmers stood at around Rs. 20,000 crore as of January-end.
The increase in the Minimum Selling Price is expected to help millers to make the payment to sugarcane farmers. The government is also putting in place a mechanism to ensure the benefit due to the increase in the minimum selling price is passed on to the sugarcane farmers.

Other Steps taken to aid the ailing Sugar Mills

The government has taken several other steps like the increase in import duty on sugar to 100 per cent, scrapping of export duty, the creation of buffer stock, and subsidy for mandatory export of 5 million tonnes in the 2018-19 marketing year to help cash-starved mills clear cane dues.

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