Increase in FRP to moderate profitability of sugar mills from Maharashtra, Karnataka, says ICRA

Market & Price Trends
Published Feb 23, 2024

Tridge summary

The Indian government's decision to raise the fair and remunerative price (FRP) of sugarcane by 7.7% is likely to impact the profitability of sugar mills, says ICRA. The hike, from Rs. 315 to Rs. 340 per quintal, will result in an extra payment of over Rs. 10,000 crores to cane farmers. The Indian Sugar Mills Association (ISMA) has welcomed the move, but also urged for a corresponding increase in sugar and ethanol prices. The Commission of Agricultural and Costs Prices (CACP) may adjust the minimum support price (MSP) of sugar based on the new FRP.
Disclaimer: The above summary was generated by a state-of-the-art LLM model and is intended for informational purposes only. It is recommended that readers refer to the original article for more context.

Original content

The increase of nearly 7.7% in the fair and remunerative price (FRP) of sugarcane by the central government is expected to reduce profitability of the sugar mills, said credit rating agency ICRA. While, the sugar industry expects the hike in sugarcane prices to increase competitiveness of sugarcane against maize and rice.The increase of FRP from Rs. 315 per quintal to Rs. 340 per quintal will help the 5 crore cane farmers will lead to an additional payment of more than Rs. 10,000 crores to the cane farmers through the sugar industry. Industry body Indian Sugar Mills Association (ISMA) has said that the increase in FRP will help farmers. “The increase will help the farmers to meet the increasing expenditure for growing cane and can make sugar cane retain its competitiveness against other crops like rice, maize etc. This will lead to an additional Rs. 10,000 crore plus payment to the cane farmers through the sugar industry.” ISMA has also demanded commensurate increases in prices of ...
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