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Informist, Thursday, Oct. 24, 2024

By Afra Abubacker

NEW DELHI – The proposal to raise the minimum selling price of sugar has not been withdrawn and is awaiting final approval, a top government official said Thursday. The official did not, however, say by when the hike would be cleared. The current minimum selling price of the sweetener is INR 31 per kg, unchanged since 2019.

The proposal has been under consideration for the past few months and is going through multiple rounds of review, the official said. On Thursday, The Hindu BusinessLine had reported that the proposal had been put on hold by a committee of ministers headed by Home Minister Amit Shah as the average retail price of sugar is hovering around INR 45 per kg.

The official, however, insisted the food ministry was not worried about retail prices with "sugar inflation remaining almost the same as last year". On Thursday, the average sugar price in Delhi's retail market was INR 45 per kg, up slightly from INR 44 per kg last year, according to the Department of Consumer Affairs. In Mumbai, the rates are INR 48 per kg, up from INR 46 per kg last year, data showed.

Asked if there are concerns of retail prices rising ahead of Diwali, the official said, "There is no worry. We have sufficient stocks, we can intervene at any time." The 2024-25 sugar season that began on Oct. 1 is seen as comfortable with an estimated opening stock of 7.9 million tonnes and gross sugar output estimated at 33.31 million tonnes. India's annual sugar requirement is about 29.00 million tonnes. 

Another senior official also said the proposal to raise the minimum selling price had only been deferred, and added that the rationale for the delay was unclear. According to senior sugar industry officials, the Centre is likely to raise the minimum selling price of sugar by the end of November, after the assembly elections in Maharashtra and Jharkhand. Maharashtra is set to vote on Nov. 20 in a single phase. Jharkhand will vote in two phases, on Nov. 13 and Nov. 20.

Citing the rise in fair and remunerative prices of sugarcane, the sugar industry has been clamouring for a hike in the minimum selling price of sugar to cover the production cost. In February, the Cabinet Committee on Economic Affairs had approved a record 7.4% hike, or a rise of INR 25, in the fair and remunerative price of sugarcane to 340 rupees per 100 kg for the sugar season 2024-25, with a basic recovery rate of 10.25%. The recovery rate is the proportion of sugar extracted from sugarcane.  End

Edited by Rajeev Pai

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