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Sugar prices may rise with Cabinet’s hiked cane purchase by 10.6%

Sugar prices may rise with Cabinet’s hiked cane purchase by 10.6%
Courtesy: ht

New Delhi: The government has increased the purchase price of sugarcane from farmers, which may result in the hike of sugar price.

Finance minister Arun Jaitley on Wednesday said that Union Cabinet approved a Rs 25 per quintal, or 10.6%, hike in the fair and remunerative price (FRP) for sugarcane to Rs 255 for 2017-18 season beginning October, reported ht.

He has also stated that while the government had kept sugarcane FRP, that is the minimum price that sugarcane farmers are legally guaranteed for the 2016-17 season is unchanged at Rs 230 per quintal. the situation has now improved, he added.

The food ministry had earlier proposed an FRP of Rs 255 per quintal for the 2017-18 season after a recommendation by the Commission for Agricultural Costs and Prices (CACP). However, State governments are free to fix their own state advised price (SAP) and millers can offer any price above the FRP.

The increase in price is recommended considering the rising production cost as well as millers’ capacity to pay the rate in view of better sugar prices.

Due to drought in leading growing states of Maharastra and Karnataka, sugarcane output has declined by over 12% to 306.03 million tonne in the current season.