India is poised to make a decision regarding the sugar industry’s request for an increase in the minimum selling price (MSP) in the coming days, according to Food Secretary Sanjeev Chopra. The government is also expected to finalize ethanol policies ahead of the next marketing season.
As the world’s largest sugar consumer, India has implemented restrictions on the use of sugar for ethanol production during the 2023/24 marketing year, which concludes on September 30. Additionally, the government has prohibited sugar exports to stabilize domestic prices.
Chopra stated, “We are discussing the MSP proposal. In the coming days, we will hopefully take a call.” The sugar-processing industry has been advocating for a higher MSP, citing that while the mandatory procurement price for sugarcane has increased in recent years, the MSP has remained unchanged since 2019. Industry representatives argue that a higher MSP would facilitate timely payments to millions of sugarcane farmers as the new season begins on October 1.
The outlook for sugar production in the upcoming season appears positive, bolstered by favorable monsoon rainfall and an increase in sugarcane acreage. The area dedicated to sugarcane cultivation has risen to 5.77 million hectares (14.3 million acres), up from 5.7 million hectares (14.1 million acres) the previous year.
Chopra noted that “we should be having very healthy stocks at the end of the present sugar season,” which would allow for better planning regarding the diversion of sugar for ethanol production in the next year. The country is expected to start the new marketing year with carryover stocks estimated between 8 million and 8.5 million metric tons.